All Star Incentive Marketing’s October 2023 guidance for 2024 recognition budgets recommends setting aside 0.5% to 1% of annual compensation. That is the supplier’s planning rule, with the allocation depending on program objectives. Its reference to a WorldatWork average of 2% and median of 1% can be found in the association’s June 2013 report, ten years before the guidance. All Star guidance WorldatWork 2013
Historical budget evidence needs a date and a denominator
In the 2013 survey, 178 respondents answered how much of payroll was used for recognition. The largest published band was 0.1%–1.0%, containing 68% of responses. The distribution shows why the average alone does not describe a typical allocation. WorldatWork 2013
Recognition spending as a share of payroll in the 2013 survey
Distribution of the 178 answers to WorldatWork’s payroll-budget question.
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Tap or hover for details. All values are also available in the data table.
Source
Fieldwork February 20–March 14, 2013; 471 cleaned member responses overall. Only respondents reporting a recognition budget received this question. Figures sum to 101% through rounding. Members typically represented management at large North American company headquarters. These historical reported allocations are not a recommended budget or a representative 2024 employer benchmark.
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| Category | Share of respondents |
|---|---|
| 0% of payroll | 5% |
| 0.1%–1.0% | 68% |
| 1.1%–2.9% | 10% |
| 3.0%–5.9% | 11% |
| 6.0%–10.0% | 3% |
| More than 10.0% | 4% |
The later 2019 edition also showed variation: 48% of the 180 payroll-budget answers were in the 0.1%–0.3% band. Its categories differ from 2013, so the two distributions should not be read as a matched comparison. Both predate All Star’s 2024 planning advice and neither establishes an optimal spend. WorldatWork 2019
All Star’s four planning categories were service awards, spot awards, social or peer recognition, and performance recognition. They serve different purposes, from marking tenure to acknowledging a specific contribution. The proposed compensation percentage therefore needs to be interpreted alongside which activities it is expected to fund. All Star guidance
Program administration is part of the budget decision
All Star recommends bringing recognition activities into a shared platform to consolidate information and reduce administrative work. Historical WorldatWork evidence shows that budget responsibility was often shared: in 2019, 47% of 213 respondents combined central and departmental budgets, 41% centralized the budget and 12% held it within departments. All Star guidance WorldatWork 2019
How respondents organized recognition budgets in 2019
Budget responsibility among 213 WorldatWork survey respondents.
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Tap or hover for details. All values are also available in the data table.
Source
Fieldwork February 20–March 11, 2019; 445 cleaned member responses overall. This question had 213 answers. The sample mainly reflects management at large North American company headquarters. Budget location does not identify the technology used or prove that a shared platform saves money.
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| Category | Share of respondents |
|---|---|
| Partly central and partly departmental | 47% |
| Centralized for the organization | 41% |
| Held within departments | 12% |
That distribution gives context to the administration problem, but it does not test All Star’s cost-saving claim. A budget held centrally can still involve multiple systems, and a shared system can serve several departmental budgets. The company supplied no measured before-and-after administration cost. All Star guidance WorldatWork 2019
All Star also identifies setup and technology charges, shipping, handling and applicable sales tax as costs to include alongside rewards. Program owners need to decide which costs sit inside the stated allocation and which are funded separately. The guidance thus concerns the resources required to operate recognition, as well as the value of the gifts themselves. All Star guidance
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Emma Carter
Emma Carter covers retail, e-commerce and the gift card shopping experience for Gift Card News.