Archive for the 'incentiver program design' Category

incentive ahead

Over the years we have seen companies ascribe many different objectives to employee recognition or incentive programs.  The programs that work well and produce results all have one thing in common….objectives that can be achieved by the participants in the program.  Here are some of things to consider when planning your next incentive or recognition effort:

  • They can concentrate attention on your top company priorities 
  • They are first and foremost great communication tools that guide employees to what they individually can do to achieve results 
  • They will allow you to share the company success with the employees. ..they earn a part of what they help create. 
  • They can help to break down barriers between departments and divisions encouraging teamwork and creating a synergy for higher performance 
  • They will foster employee development in new skills and qualities necessary for future growth.

These certainly aren’t the only things that a recognition or incentive program can achieve, but in your planning phase, it’s very important to consider these points.  They can be very powerful when you use them well, but even more powerful with negative consequences when you don’t.

Incentive and recognition programs can and will backfire when you aren’t honest about your current situation, business climate or culture.  When you implement your program, objectives that make upper management warm and fuzzy won’t produce results unless your participants know that they are realistic and achievable.  Without that, you won’t have a program, so save the money, and the headache.

This concept didn’t come from the mouths of all the pundits in and around the employee award industry, but from the hallowed halls of Wharton, one of the country’s most prestigious business schools.  “Treat your employees well.”  Not a very novel approach to say the least, but in our experience something an amazing number of companies still don’t do.   

In this article from Knowledge@Wharton, it mentions that… 

“Customer service standouts tend to have extensive employee training and talent management programs. They also tend to treat workers well by giving them incentives, robust career development paths and other benefits.” 

Certainly this concept is not something new; the idea has been around for years, and companies who understand it have long been using employee awards to recognize customer satisfaction.  Companies intuitively understand this principle, but what we find compelling is… 

“the national level of customer satisfaction has not budged since the mid 1990s”.  According to the American Customer Satisfaction Index (ACSI), consumer contentment stands at 75.8 on a scale of 100.  In 1994, when the index was created, consumer satisfaction stood at 74.8.” 

So even with all the attention and money spent on employee awards, it would seem that there is lot of room for improvement.  As this index rating is an average, there are undoubtedly a number of firms far ahead of the curve, but as such there will also be as many companies who haven’t heeded the concept.   

Employee recognition programs for customer satisfaction are relatively easy to implement.  They can be as simple as a small reward for customer “orchid” letters to a more substantial award for positively handling an issue that might have been costly if left unattended.   

We all instantly realize those companies we do business with on a daily basis that pay attention to keeping their customers satisfied.  Conversely we all stop doing business with companies at the drop of a hat when we don’t receive the customer service we want.   

According to Peter Fador, professor of marketing at Wharton and co-director of the Wharton Customer Analytics Initiative, 

 “We have a ‘customer is king’ mentality, and we have come to expect world-class treatment. We want everything to be easy: simple customer returns, constant telephone access to the company and perfect products in every color. We’re just spoiled, plain and simple.” 

An interesting dichotomy exists when economic downturns reduce the money that companies have available to invest in the programs that train and motivate employees how to provide great customer service.   Yet lack of these programs can also breed a decrease in customer satisfaction and the resultant loss in business.  It’s a two edged sword.  When companies load up with incremental fees for services previously provided for free, (ex: bag fees on airlines) the entire customer service equation can shift.   

Like it or not, we are at a time when companies are tracking the usage of their products or services in order to segment their customer base.  In this model, the larger customer get the service, and the smaller less important ones get the twenty minute “on hold” call that goes into the black hole.

 Bottom line is that if you treat your employees better, they will treat your customers better.  A $25 gift card for a job well done can return tenfold in customer satisfaction and bottom line dollars.  Customer service budgets may be a natural area to cut costs in lean economic times, and gain in the short term, but that can cause a loss of customers and profits in the long term.