All Star Incentive Marketing has set out a framework for employers preparing their 2024 employee recognition budgets. The October 2023 guidance connects the available funding with the purpose and administration of the program.

The company offers 0.5% to 1% of annual compensation as its budgeting rule of thumb. That figure is a planning recommendation from All Star, with the final allocation depending on the employer’s objectives and program design.

Four recognition categories structure the discussion: service awards, spot awards, social or peer recognition, and performance recognition. Each addresses a different occasion or contribution.

All Star recommends considering these activities together. A shared platform can bring program information into one place and reduce the work involved in managing separate systems.

The budget also needs to cover more than the face value of gifts or rewards. Setup and technology fees, shipping, handling and applicable sales tax are among the costs identified.

For incentive providers and employer buyers, the guidance places administration and fulfillment alongside reward selection. The result is a fuller view of the resources needed to operate recognition throughout the year.