The Single Biggest Incentive Program Planning Mistake

Over the years I've seen a lot of incentive and reward programs.  Almost 99% of them are designed incorrectly.  And the error I see most often is designing a program to reward a specific result.  I know what you're thinking, programs are supposed to get results!  Yeah - at the end of the day they should create a positive outcome but incentive and motivation programs shouldn't reward the results - they should reward the efforts made by people.

Results are the "result" of the interaction of a lot of things - markets, competitors, pricing, the government (today more than ever) and people's behavior.  Only one thing on that list do you can control rewarding - and that's the behavior of the audience you're targeting.

The "Wrong" Planning Process

I can say with some validity most incentive programs begin with the discussion of "what result to we want?"  Typically the result is increase sales, profit, units, you name it.  Or the opposite - decrease costs, decrease turnover, etc.  The program is planned with the result in mind.  No problem - yet.  But the next step is where the real issue arises.

Once the result is identified, most planners jump to "we will reward anyone who hits the goal (the one defined in the first conversation.)  Then they determine the budget and back into the award whether merchandise, gift card, travel, trophies, whatever.

Sound familiar? 

What the Process SHOULD Look Like

To design a more effective program - say for a "sales" incentive try following this set of activities versus what was oultined above...

• Define the results you want
• Discuss why those results are not occuring (sometimes it's not motivation and you've just saved yourself a lot of time and energy fixing the wrong problem)
• Define the audience that has the biggest impact on that result
• Identify the behaviors that lead to that result - all of them, not just the last two in the chain of events (which is typical)
• Assign values to each of the behaviors - some are more important than others.  As an example, qualifying a customer is more important than pricing a proposal in most sales behavior chains because inadequate qualification causes increased costs along the entire chain and increases the opportunity costs of not working on qualified potential customers.
• Reward the individual behaviors
• Reward the outcome (sales)

In the second set of activities you will be setting up a program in which people actually have control over their ability to earn awards.

I can't say this enough - reward behaviors - celebrate results!