Compensation or Recognition & Incentives?

Here is an excellent article from The Enterprise Engagement Alliance that looks at cash as an incentive award.  Their point is pretty simple.  Cash is the currency of compensation and pricing, non-cash incentive awards distinguishes your program from compensation.   

That does however raise the old question whether you should use compensation to motivate a change in performance or use some other tangible award such as travel, gift cards of merchandise.  We’ve attempted to answer those questions in past posts such as this one here.   

While there are many reasons why you should consider non cash over cash compensation the question I believe you need to consider prior to implementing your program is simply this:  Is this effort something I want to become of a part of my overall compensation program?  In determining the answer to that question you’ll find whether you’ll want to use cash or non-cash awards to motivate the performance change.  This paper we wrote on the subject some time ago may also be of help. 

If you do decide to use non-cash awards you may want to consider this very cost effective new award option.

Why Do Incentive Planners Put Awards First?

Was wandering around the net the other day and came across this article from Enterprise Engagement Alliance that reminded me of a post on the same subject last year.   

The incentive industry sells awards, that’s  how we make money, and we’ve done a great job of it.  But by and large we’ve done a horrible job of showing clients how to use those awards.  We’ve been so intent on selling the award that we often forget to ask the client why they are using them and offer our expertise to make their programs as successful as they can be. 

Not so long ago when a client approached us with a need we would assemble a room full of subject matter experts and spend some quality time in putting together recommendations for a successful program.  Now clients approach us with a need for an award and we spend our time putting together a pricing proposal…not much thought in that!    

So what changed?  Clients haven’t necessarily become more sophisticated in their understanding of how to implement programs, but they are often challenged to do it themselves.  More often, the sales folks in the incentive industry are not well trained in the nuances of successful incentive programs and there is pressure to just “make the sale.”  So they cut all the corners and go straight to the pricing proposal and don’t muddy the waters with suggestions of ideas to improve the program.  Frankly we’ve made the buyers just want to talk about the awards first. 

It’s a shame the majority of the industry has evolved to be proficient peddlers of prizes.  But such are the times.  Frankly that’s about all we do these days.  We do ask the client if they want help in the other phases a well-run incentive program, but all too often they decline.   It’s sure less stressful.  If you are a customer that is implementing an award activity you might want to consider asking for experience from your supplier before you ask for the awards, you may be surprised at the outcome.  Then again if all you want is a prize, we’ve got lots of ideas for those too!

Why Do Employees Love Gift Cards?

This recent post by Globoforce mentions an interesting MBA case study completed by Stanford University that clearly shows why employees love gift cards over traditional merchandise awards.   

The study stated that when compared to gift cards, the items in traditional catalog merchandise programs were too expensive and not a good value proposition.  The items were outdated and often missing important accessories, merchandise was often broken during shipping and delivery times were long especially for out of stock items.  And, when gift cards were added to the award mix as options they quickly became 90% of the award redemption. 

Our experience parallels these findings.  Whenever a client adds gift cards to an existing traditional merchandise program, the overwhelming redemption goes to gift cards.  Why does virtually every bank card award program include gift cards?  Because that’s what folks want, and the banks are interested in selling their services and pleasing their customers so that’s what they give them.  We’ve been told that the redemption rates for gift cards in bank programs also exceeds 90%. 

Award of Choice is a recently introduced employee award system that has the most inclusive list of merchant gift cards in the industry. 

For a sample Award of Choice card and a code that will provide you with a 40% discount on administration fees, please feel free to contact us.

You Still Need Non Cash Incentive Programs

This is an interesting article from Incentive Intelligence.  It points out the need to use non cash incentives along with pay for performance to motivate and improve individual performance. 

Non cash incentives, when implemented properly, will help you change the behaviors that lead to the performance you are trying to achieve.  Click here for a simple graphic model of how non cash incentives can help change behavior.

Using Employee Incentives to Drive Wellness Programs

As the U.S. health-care reform debate rages on, employee wellness programs are increasingly becoming an important consideration for many companies. Wellness programs are taking their place among a host of proposed solutions to improve care and reduce costs. In a recent article in WorldatWork, the authors discuss the challenge in incentive programs of trying to create incentives across multiple behaviors when necessary, and monitoring the change in those behaviors to improve performance

Gift Cards are the #1 Award in Consumer Loyalty Programs

According to research commissioned by St. Louis, Missouri based Maritz Loyalty Marketing, a leading supplier of consumer loyalty reward programs, consumer stated preferences of what they would like as awards and their actual behavior do not always match.

When asked their award preferences they responded:

#1…Cash Back

#2…Discounts

#3…Merchandise

#4…Gift Certificates

#5…Travel

The order in which they actually redeemed their points for awards shows the reality:

#1…Gift Certificates

#2…Cash Back

#3…Discounts

#4…Merchandise

#5…Travel

Recent incentive industry research supports these findings.  Over 6 to 1 of respondents in a survey completed by Incentive Magazine reported that gift certificates are either more effective or equally effective as cash in a rewards program. 

Why are gift cards the #1 award in both consumer loyalty as well as employee reward and recognition programs?

Reward Hard Work, Reinforce Extra Effort

Here’s an interesting blog post by Aubrey Daniels, a renowned behaviorist.  All too often, businesses focus their attention on hiring talent and talent management rather than looking for those employees with the penchant for hard work and discipline.  

Incentive and recognition programs can be very instrumental in motivating participants to realize their true abilities and be rewarded for their efforts.  They can produce surprising results.  Research has shown that incentives can improve performance of individuals by an average of 22%.

All of our award systems use a wide selection of gift cards, #1 award in the incentive industry.

Ten Top Consumer Gift Cards

A recent article in Incentive Magazine lists the “Top Ten” gift cards that American consumers choose as the most desired to receive out of 75 retailers evaluated.  While we haven’t had a chance to review this research, we were a little puzzled by the retailers that appeared in the top ten, not because they appeared, but because of ones that weren’t on the list.  In over 15 years in the gift card reward business, tens of thousands of employees have redeemed for gift cards such as Wal-Mart, Target, Best Buy, Sears, and many other popular retailers that were not on this list.   

One thing is certain about this type of research.  It shows the diversity that exists in the American workplace.  When you are going to use gift cards as rewards, don’t try to pick the few that you think your participants want, let them choose for themselves.   

Our gift card award systems let your employees choose a card that fits their own lifestyles from over 500 of the most popular merchants, hotels, restaurants, specialty shops etc., in the country.  With our systems your employees are guaranteed to be able t receive the gift card that they really want.

Stop De-Motivating Employees!

I read an interesting blog post the other day about why employees are losing motivation.  It stated that employees typically start a new job with a great deal of enthusiasm and based on research conducted by Sirota Survey Intelligence in about 85% of the companies, employee morale sharply declines after the first six months and continues to deteriorate. 

The post goes on to list ways to slow down this de-motivation spiral, and a key ingredient is to provide recognition.  When you reinforce their accomplishments with recognition, you will get a better performance, and more opportunities to reinforce them in the future. 

Our products were designed to recognize and reward performance using gift cards, the #1 award in the incentive industry.  The are the award sought by the vast majority of participants in programs because they offer the most choice at the best value.  No other award even comes close

Get the Family Involved in Your Recognition Program

In any incentive or recognition program getting the family involved in the process can be very important.  When you recognize an employee for superior performance or an employee earns an award in an incentive program for achieving results, the family can take as much pride in this accomplishment as the employee. 

For many years, analysis conducted by the major incentive houses showed that approx 75% of all the redemption in these award programs were for items that could be shared by the family.  Items like electronics, house wares, furniture, sporting equipment, barbeques, toys etc. were the staple in the traditional award catalogs.  The reason was determined that the employee wanted the family to share in their success.  

 With the diversity in today’s workforce, you can ensure that you will provide complete family involvement in your programs when you use a vast array of the most sought after gift cards in your program, the #1 award in the industry.  With their extremely limited selection, traditional incentive catalogs just don’t have the choice that families want today, not even close.  When your employee can earn an award that they can give to the family or family members, it is a very powerful and motivating part of your program.