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Behavior Based Incentive Goals
Author: Ley
If you have used incentive award programs, are using incentive award programs, or are planning to use incentive award programs, this post by Paul Hebert of i2i Incentive Intelligence is a must read.
The fundamental challenge for anyone designing incentive awards is to have a program that will produce results. The essential element to achieve this challenge is to establish the proper goals for your participants. Then and only then can you spend the time necessary to determine the right rules to make it all work successfully.
When considering what goals to establish, there are three different types you should consider:
1. Focus on the behaviors that you want to influence to reach the outcome
2. Focus on what you do want to achieve vs. what you don’t want to achieve
3. Focus on specific details to achieve, not a vague generalized outcome
The “prize” you use in your award program won’t drive lasting results unless you take the time to structure your program properly. And worse, when goals are poorly assigned, you run the risk of spending large budgets with little to show for it.
And, just for shameless promotional purposes, when you do design your program with proper goals, don’t forget to use the Award of Choice card as your award. It has the lowest cost and best choice of any gift card system in the industry.
read comments (0)Merry Christmas from AwardEmployees.com!
Author: Ley
May the Christmas angel whisper only thoughts of peace, love and happiness in your ears.
From all of us at AwardEmployees, have a wonderful Christmas holiday and happy and healthy New Year.
According to David Anderson, senior vice president and chief health officer of Staywell Health Management, employers who implement wellness programs will reduce their health care costs with an added bonus that the employees will be more engaged and productive. While this contention is not supported by any quantifiable research, it does stand to reason that employees who are serious about their health choices could be more engaged and productive.
Anderson goes on to say that there are three pillars to engagement critical to the success of a wellness program: culture, communications and compliance.
Culture
If your entire culture is supportive, the person, senior management, rules of engagement, everything aligned to support wellness, then your program has a greater chance of success.
Communication
Your corporate communication reinforces your culture, and as such needs to be aligned to your wellness program and support it whenever possible. Like the third leg of a three legged stool, if communications is weak your stool will be weak.
Compliance (Incentives)
Mr. Anderson mentions that incentives are way to get your employees to participate in a program. Seemingly because if you “pay somebody enough to do something, at some point it will get done.”
We would concur that incentives should be a part of your wellness effort but for more than just “getting it done.” Incentives and recognition can be extremely powerful in the engagement of your employees. Many studies have indicated that recognition is a pillar of employee satisfaction and can help drive a positive culture. When used properly, incentives are probably more important than communications in producing results and building your culture.
Last year, 62% of companies that implemented wellness programs used incentives, 25% more were planning to, and only 13% weren’t considering them.
In addition, in 2010 wellness incentives averaged $430 per employee, a 65% increase from $260 in 2009.
Companies are implementing wellness programs to help lower their ever increasing health care costs. And incentives can help to produce the results. Incentives won’t necessarily change people’s behavior to stop smoking or lose weight, but they will help you get them started.
We found this recent blog post on HR.com to be quite interesting. Not so much because of the clarity of its content, but for the the it is loaded with the kind of ridiculous rhetoric that is reminiscent of days gone by. I would have thought by now that the dinosaur merchandise award companies would be getting tired of using the same trite arguments they used when gift certificates were first used as awards in the incentive industry many years ago.
Their opinion, stated as fact, is that gift cards, because they are denominated in dollars “ go to pay the bills, groceries, gas or other common household costs,” and therefore are not tangible evidence of success and are not positive and don’t have a long lasting impact on employee performance. Sorry, gift cards are tangible, they are in effect what they can be redeemed for, and the TV set purchased with a Best Buy gift card is every bit as positive a reminder of how they earned the award as the TV set ordered from the merchandise incentive catalog. The big difference of course is that with the gift card, they get that TV for about half the price of the incentive merchandise catalog, and they’ll still have money left over to purchase a DVD player to go along with it. These merchandise award companies have been hiding their pricing behind point schemes that are frankly laughable in today’s business world where determining the value of an item is a short click away. If they are still using these arcane arguments, my guess is that they are still losing business to the lowly gift card….you think?
The way this post is written is typical of an HR world that has been duped by the award industry for years regarding cost and value of awards. But Gen X & Y and the Millennials will have nothing to do with it. They know the value of things and are not easily swayed by the rhetoric of days gone by.
What is a little disturbing about this post is that they take the very difficult subject of employee retention and correlate it to the award being used to recognize performance. That’s quite a jump; obviously the author was reaching for some way to tie the article to awards, but saying that “the question employers need to ask themselves is “are we using the right reward to retain employees?” is rather ludicrous. If it were as simple as that, every award company in the world would be researching and investigating every possible combination of awards to prove their “package” was the best to retain employees. The winning company would have access to billions of dollars in non-cash recognition award budgets, not to mention cash recognition that is significant budgets as well. Recognition awards may play a part in employee engagement, and employee engagement certainly plays a part in retention. But there are many pieces to the employee retention puzzle; awards may be one of them, and only a small one at that.
Lastly, I was interested in the reference to the World at Work Trends Report 2011 and the mention that “employers should use non-monetary rewards and exclude cash-equivalents such as gift cards from the mix, regardless of how popular they appear to be,” as if that were a part of this study. Having written for World at Work I am well versed in their position on fact based vs. opinion based material. I have also reviewed this report on several occasions and it is completely fact based. I can find no mention of the qualitative use of non-monetary awards. That’s just a clever way to gain credibility by positioning your opinions as if shared by a well-known compensation association, which of course they don’t.
In fact, gift cards are gifts. They are often the best gift to receive especially by those who want to make their own selections.
Related Posts:
Misleading, Deceptive, Uninformed, or Just Plain Dishonest Blog Posts?
Why Do Merchandise Companies Hate Gift Cards?
Reprise: Incentive Companies Do Hate Gift Cards.
For any of us selling in this industry for more than just a few years, a thorough review of the latest Incentive Research Foundation’s Vertical Market Study must have been painful. At least I hope it was. In that study, it indicates that 78.5 % of the respondents did not engage the services of an outside incentive company for the design, management and measurement of their incentive programs. Of the balance of the respondents who did engage an outside company, the majority were engaged to provide fulfillment services only. Wow, have things changed!
I must say that I was absolutely amazed that nearly 80% of the respondents didn’t use outside incentive companies other than for fulfillment. In the not too distant past, when we developed a proposal for a piece of business, that proposal contained all the elements to make an incentive program successful. We concentrated specifically on the design and rules structure, the measurement, the administration or management and the communications. The end of the presentation was mainly reserved for the fun stuff…the dazzle, glitz and glamour that could be provided by the awards. But the important points of how to make the program work well were almost always discussed first. Frankly, everyone in the industry could present a travel destination (it’s not hard to make Hawaii or Rome look good) or a beautiful book of merchandise awards (but TVs and toasters are the same for everyone). If our salespeople were doing their job, our proposals could capture the essence of what the client really wanted to do because we knew their industry and we had done our homework to know how to make their program successful. That’s what we were trained to do, that’s what we did best. Evidently the clients of today don’t have that same opinion of the suppliers that sell them awards. And that leaves us to selling commodities instead of our intellectual property.
When asked why they didn’t use outside agencies in the design, management and measurement, following were the three major reasons:
- 70% of the respondents felt that they had in-house resources with the ability to design programs without assistance.
- 11.3% said the cost was too high to engage an outside agency,
- 10.8% said that the agencies lacked the specific expertise in their specific industry to be of any value.
I won’t comment here on the first reason, but you might want to take a look at the last post we did on why only 1/3 of all non-cash incentive programs produce results. Evidently we have allowed our stock in trade, our real reason for being in the business, our expertise, to be devalued in pursuit of the profits of just the awards. And that is a shame! What we used to be proud of was implementing programs that produced results for our clients, not just fulfill awards.
So what changed? Well, I really don’t know the exact reasons, there are many, but I can make an educated guess on one of them. For years, it was common practice in the industry to not charge for the program design, management, measurement and design/ layout of the communications campaign. The full service incentive companies actually gave all this away as a cost of doing business and made up their profits on the high margins they received on the production of the communication pieces and the awards, specifically the merchandise awards. It was not uncommon for these companies to be selling merchandise, guised in points, at very inflated prices, often 50% to 100% more than retail.
Over twenty years ago I recall a meeting where we invited a high level executive from McKinsey & Company, the well respected and successful business consultancy, to come and listen to our plight of shrinking profits. After respectfully listening to what we did, how we did it, and spending a morning touring our college-like campus, he said….”I’m very impressed by what I’ve seen and what it is that your company does, but let me get this straight. You provide all the design, management and measurement services to your clients at no cost and give away your intellectual property, while trying to make your profit on selling what is essentially a commodity, is that right?” When we answered “yes” he said….”we do just the opposite.”
Well, the eyes of our chief executives opened in amazement, the smirk on the faces of the sales executives was palpable, and the rest is history. From that day forward, we tried to change our entire pricing philosophy and invoice clients for all of our services. But, unfortunately, the sales force was very reluctant to make the change and the clients were less than agreeable to being billed for what they had previously received for nothing. So the die was caste, we were essentially hoisted on our own petard, and rest is history.
As time went on, because there is relatively no real barrier to entry, more and more companies got into the business, the competition stiffened, and many of these much smaller companies started nipping at the heals of major incentive companies. Today it is not uncommon to find very large multi-million dollar programs in the hands of very capable small local incentive companies who will provide tremendous service to the clients for the profit derived from the fulfillment of the awards. Most of these companies don’t have the resources to provide analytical assessment and measurement, detailed program structure and design, and a marketing services company quality communications campaign. They leave a lot of that up to the client. But they can and do provide any and all, and often more of the awards that are provided by the larger incentive companies.
If clients don’t put much stock in our capabilities other than fulfillment, when they turn to us only to purchase what is essentially a commodity we should expect to be challenged to provide commodity pricing. And, if clients see it that way, they should be getting the best price they can….or shame on them!