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.

Jeff’s premise is not to create a special program to praise your employees, you don’t need one.  And we wholeheartedly agree!   Too many companies in the award industry think you need those elaborate electronic programs with points allocated for certain employee performance improvement.  They hold the points in a bank account and then redeem them for the latest espresso machine or electronic gadget of the moment, all of which are usually way overpriced. 

Instead just follow some of these practical and simple steps to make sure you are giving your employees the recognition they deserve: 

“Treat employees like snowflakes.” 

Everyone is different; recognize each in the way that gives them the greatest impact. 

“Never wait”

Recognizing as soon after the performance has occurred is never too soon.  When you wait you lose the impact of the recognition. 

“Be specific.”

Telling someone they did a great job without telling them will often fall on deaf ears and you will lose the moment.  When you’re specific it tells the employee that you are paying attention and you know what they did and they’ll also know what exactly to do the next time.   

“Be sincere.”

Insincerity will hurt more than help and will be taken negatively.  Don’t waste your time if your not going to be sincere.   

“Leave out the ‘constructive’ stuff.”

Don’t use recognition as a “teaching moment”….ever.  You greatly lessen the effect of the recognition in the first place. 

“Be proactive.”

Focus more on employees doing things right than doing them wrong. 

“Try the “just because” flowers approach.”

A spring bouquet that is a surprise often has a bigger impact than Valentine’s Day roses.  A surprise visit from the CEO to thank someone can be priceless. 

“Always seek a balance.”

It’s easy to recognize the best, but look for reasons to spread the wealth.  A little encourage to an average or poor performer can help them become your best performers. 

“Recognizing effort and achievement is self-reinforcing: When you do a better job of recognizing employees they tend to perform better — giving you even more achievements recognized”      

                                Jeff Haden

In our daily surfing of the net on the subject of awards we come across many articles, this one, giving us another reason why gift cards make great awards, caught our eye.  It relates a new shopping event for the after holiday season designed to entice those who received gift cards for Christmas to come in and spend them on a certain weekend…the GCW or Gift Card Weekend Sale.  Many partner companies have used this concept to drive incremental sales in January.  The gift card recipients can redeem their gift cards from participating retail partners and receive extra value through special deals posted on the GCW website that will be offered that weekend only.  

As a very large percent of the incentive and recognition awards budgets are paid out to participants at the end of the year, having sales like the GCW actually increases the value of the award to the participant.  If they earned a $100 gift card, it could be worth $125 to $150 on these sales. 

For years, the traditional merchandise award companies have used “sale” pricing on a few of their items to entice participant redemption, unfortunately most of the awards in the typical incentive catalogs are so overpriced that even by offering a discount the prices are still quite high compared to the sales that a gift card holder can take advantage of. 

If you want to give your participants the items they really want, let them have the gift card that they want.  Let they choose from over 500 of the most popular gift cards in the country by giving them the Award of Choice card.

Over the years we’ve been amazed at the stories we’ve heard about managers that don’t know how to give feedback to difficult employees.  So, they just avoid it entirely or just give them average feedback thinking that average is bad.   In many ways it’s like what some teachers do with their students just to get them passed and on to the next grade.

No one wants to deal with negative performance issues.  No one wants to be the bad guy and tell it like it is, so they sugar coat things, they aren’t direct and they don’t tell the truth.  That just delays the issue and pawns the employee off to the next person who has to manage them.

Unfortunately giving feedback and is more subjective than objective.  Everyone looks at employee feedback through their own eyes and appraise employees accordingly.  What one sees as an inadequacy, another might see as average performance or even as strength?  As much as companies try their best to appraise the performance and provide feedback objectively it’s not always easy to do.

Of course when you do have a very difficult employee you won’t always be able to salvage them.  In those cases, it’s ok to cut your losses and recommend that they might want to look for a position that is more suitable to their own needs.  If not, they will likely become disengaged, or worse yet actively disengaged, and before you know it will have brought down some other less that engaged employees to be totally negative.

In the meantime, do your best to know and utilize the ways to effectively provide feedback, positively or negatively.  If it is negative, when they make a concerted effort to change and improve their performance, but sure to recognize that change with positive reinforcement.  Of course when it’s positive performance and the employee’s accomplishments are particularly noteworthy, then by all means praise them and recognize them for that performance.

Many folks have written about all the ways to give effective feedback.  We came across this article from last year that we feel is well done and provides all you’ll need to know to start an effective feedback campaign for you employees.

And, if the feedback is very positive and you are so inclined and want to give them a small reward along with the recognition, think of the Award of Choice card (a shameless plug).  It is a terrific system that gives the employee terrific choice with no administrative fees for you.

The Employee Engagement Alliance defines the two types of programs as this…

“Incentive programs are used to drive behaviors conducive to practically any business objective. Recognition programs are used to recognize individuals whose accomplishments were particularly noteworthy.” 

We’ve addressed the issue on several occasions but many folks still persist on confusing them.   Here’s an excellent post from our friend Paul Hebert at I2I Incentive Intelligence that will give you one way of looking at a difference between the two.  Another great way to differentiate them is by reading this post from the Compensation Café on the Right vs Wrong Incentives.  As this article comes to us from a well-respected blog on cash compensation, it gives us a good look at the same things we need to consider when discussing incentives or recognition to improve performance.   

The key paragraph in this compensation piece is the discussion of a financial rationale and these questions… 

“What will the company receive in return for the increased costs of an incentive program?” and “If you are planning to increase your targeted compensation costs of an affected group, how will you answer the ROI question? 

All well planned non-cash incentive programs follow the same methodology.  They plan for an ROI.  This is the single largest difference between incentives and recognition! 

The award industry has struggled for years to apply any sort of meaningful ROI to a recognition system.  They haven’t figured out a good way to do it and never will based on the metrics and fundamental structure they use for these types of programs. 

And as mentioned in the Compensation Café article…

Caution: You had better provide a business rationale, and not subjective phraseology like “survey says” or “everyone else is doing it” or even “it’s the right thing to do.’ Management tends to frown on such trivial rationalizations.

So for all corporate award planners, please get your definitions straight.  Regardless of what all the prize peddlers in the industry tell you, you won’t change behavior and drive significant results with a recognition program.  Recognition programs can provide you with a whole different set of benefits.  You can drive results with an incentive program that is well designed and implemented, but it won’t necessarily recognize specific behaviors of employees whose accomplishes are particularly noteworthy.

Rewards for Top Performers

“Most sales incentives tend to reward only the top performers …some of these representatives may already be selling at a high level. They do just enough to collect their bonuses or trips”

Most top salespeople will be the top salespeople regardless and will always work to be the top.  For them it is intrinsic.  If historically only the top salespeople earn, the objectives and rules structures were not set properly to include 80% of the universe, not just the top 20%.  A properly designed system will motivate the majority to better their own performance.  In essence, they should compete with themselves.

Narrowly Focused

“Many sales incentives are also narrowly focused on just sales. This causes sales representatives to focus only on revenue-generating activities.”

Absolutely!  That is as it should be.  If you want them to focus on something else then incent that objective as well, but good salespeople are success driven. And that’s where you want them to be.  The best programs will be those that are narrowly focused with qualifications to avoid other issues.

Costly

“Sales incentives also have high associated costs. Small companies which fail to tie incentives to the right performance variables may needlessly be paying tens of thousands of extra dollars per year for bonuses, trips and impromptu rewards.”

This should never really happen.  Before you implement any sales program, enough time and due diligence should be spent so your measurements and objectives are tested against historical averages, taking all current marketing conditions into consideration.  Any client who spent tens of thousands of dollars needlessly did a poor job of planning.

“The best sales incentives should be equally tied to increases in new business and sales of specific products and services. Some products or services may be ignored for higher-priced products or higher volume sales. “

Not necessarily.  You can’t solve all problems with one program, but there are ways to tie them all together with one program using combinations of these other objectives as qualifiers or bonus earning opportunities when the main goal is achieved.

A professional incentive salesperson has the experience to turn these perceived disadvantages into advantages that will make your program the best it can be.   One of the best incentive consultants in the business is Paul Hebert of I2I Incentive Intelligence.  Drop him a line if you want that well developed and successful sales incentive program.

The AON 5700 employee database which represents over five million employees worldwide, reveals … 

“an engagement level of 56 percent for the end of 2011, which is the same as 2010, but lower than 2009 (60 percent) and 2008 (57 percent). Traditionally, engagement levels between 65 percent and 100 percent represent a high-performing culture; 45 percent to 65 percent indicate the workforce is indifferent to organizational success or failure; and anything lower than 45 percent represents a serious or destructive range.” 

It seems that the largest drop in engagement comes from employees’ perceptions of how companies manage performance.  Or in other words, employees think their bosses have not provided the proper level of management that leads to better productivity.  They also don’t do a very good job of connecting the employees performance overall to company goals. 

The report goes on to state that significant numbers of employees are not motivated to work beyond job requirements and are thinking of leaving in the near future.  When measuring satisfaction scores for key drivers of engagement “appropriate recognition beyond pay and benefits for employee contribution” is only 40% globally, 48% in the US, but still the lowest of the drivers analyzed.  Recognition has been on this list for years.  Does that mean that all the money and time spent on employee recognition programs is not producing results?  Some consultants outside of the recognition industry would support this conclusion.  The analysis concludes that … 

“even at the height of the recession, employees felt a greater connection to their work and role in achieving organizational success than they do now.” This is a harsh reality, but also an opportunity for those employers willing to invest in specific areas that will have the largest impact on employee engagement. While there is an expense in doing so, the return on investment can be well worth the effort.” 

From our perspective, the time for rewarding and recognizing employee performance could not be better.  It is one of the easiest and least expensive ways for improving and maintaining employment engagement, and as mentioned the minor expense per employee for doing so can be well worth that expense.

In our opinion this piece is nothing more than a compilation of re-occurring thought on the values of recognition awards to change behavior in the workplace and is more self-promotional than anything else.   In addition they include some thought  from the works of Herzberg in the sixties as if to authenticate their position, all of which makes for a hodgepodge of creative deductive reasoning that leaves you a tad baffled.  Hey, we’re not saying their conclusions are wrong, just a little confusing. 

As is often the case, the Impact Achievement Group, who did the research, doesn’t seem to have a clue about the difference between an employee recognition program and an employee motivation or incentive program.  They also hang their case on “happy employees” not being productive, but productive employees being “happy.”  Not sure where the “happy” came into to picture, we’ve always heard “engaged” as the buzz word of the day.  We’ve been designing and implementing recognition or incentive programs going on 40 years and have never used “happy” as the objective of the program.   

We believe the issue here is who is best equipped to assist companies in improving employee performance.  There are many who claim the high ground on this, not the least of which is the consultant types as mentioned here whose income is dependent on assessment, coaching, training etc., but not awards.  Others include those research types who want to research every nuance possible of the employee world.  Then we have the communication companies who feel that all you need to do is communicate better and your woes will be gone.  Then you have the recognition and award companies who hang their hat on the award as the driving factor.  Take your pick, read up on all of them, you’ll find that they all say much the same thing.   

If you believe that employee engagement (or happiness) is a behavioral issue (which we do) you might want to consider tackling the issue using the behavior model.   In it you’ll find that research, training, communication and measurement and feedback are all part of changing behavior, with positive consequences as the piece to close the loop and continue the behavioral circle.   As “positive consequences” include the reward piece, than it would seem that it is kind of difficult to extricate the reward and recognition from the total.  Or are we just being too simplistic here? 

Let’s stop thinking about whether reward and recognition does or doesn’t work in helping to engage employees and improve performance.  There is plenty of evidence out there to support that conclusion.  I don’t know if engaged means they’re happy, but it does mean they are performing better than those who are not engaged.  What do you think?

First, the number of responses from large budget incentive users has nearly doubled over 2010 figures.  Traditionally companies with these large programs who have used other forms of awards for their programs now seem to be embracing gift cards as their award of choice.  One reason we believe is the value and choice given by gift cards that was not readily apparent in the traditional merchandise awards.  This trend has been increasing for several years, but 2011 seemed to be a peak.  According to the survey: 

“Of special note to gift card suppliers are the survey responses that place more value on gift cards than merchandise – gift cards are overwhelmingly seen as a more influential incentive or reward than other options.  Since 57 % of respondents said their budgets were untouched for 2001, the outlook for gift card suppliers is even brighter this year.” 

A significant survey question was: 

How gift cards compared to traditional merchandise awards? 

• 59.6 % said more effective
• 27.6% said equally effective
• 5.7% said less effective
• 7% didn’t use merchandise. 

These types of responses would have been unheard of twenty years ago.  Traditional merchandise awards had been the backbone of the incentive awards industry because they drove all the profit.  There was only a small handful of suppliers selling gift cards and only to a limited market.  Today gift cards are very well accepted as an award that will drive performance.  They no longer have that “impersonal” label that was given to them by all the traditional merchandise suppliers when faced with them as competition. 

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.