Incentive Intelligence

What I Learned From @SBrowneHR Yesterday – Old School Still Good School

One week from today I’ll be rolling into Sandusky, Ohio – home of Cedar Point – winner of the “Golden Ticket Award” as the best amusement park in the world and of course…the 2011 Ohio SHRM (Society of Human Resource Management) meeting.  While I won’t be rollin in like Guy Fieri in a cherry 1967 Camaro SS – I will be looking for a guy who makes pizza.  And that would be Steve Browne (@SBrowneHR), HR leader for LaRosa’s Pizza in Cincinnati OH, intentional human and good mood virus for the rest of us lesser men (and women.)  Steve is helping plan and operate the Ohio 2011 SHRM Chapter meeting September 21 – 23, 2011 in Sandusky.

The #OHSHRM will be 750+ attendees strong and will feature great speakers such as –China Gorman (@ChinaGorman, previous COO of SHRM Nataional), Mark Stelzner (@Stelzner), William Tincup (@WilliamTincup), Bill Boorman (taking the long trip from the UK, @BillBoorman), Jennifer McClure (@CincyRecruiter), Michael VanDervort (@MikeVanDerVort), Benjamin McCall (@BenjaminMcCall) – all great friends, great resources and overall great people. 

And then, you have moi.  I’m also on the docket on Friday morning – but I’m just there so the others look really, really good by comparison. ;-)

But enough of the introductions…

Old-School = Great Engagement

I am writing today because yesterday I was on a conference call with a few hundred or a few dozen people (who knows – doesn’t matter) who are attending the #OHSHRM conference.  It wasn’t a planning meeting for speakers.  I wasn’t a special get-together for those behind the scenes.  It was a meeting for those who are simply – attending.

Steve put together two (2) conference calls prior to the meeting and invited ANYONE who is attending to call in and listen to him and the planning team talk about what to expect, how to dress, what to look for and to personally invite each attendee to seek him out and introduce themselves to Steve and the crew.  Attendees could then ask questions and get more information on the event.  Right there.  Right now.  Personally.  Gasp – what was Steve thinking – actually connecting with the audience directly?

See… Steve is all about being intentional… doing the work and making the effort – nothing happens without an intentional decision to do it and this little phone tete-a-tete was one such intentional effort on Steve’s part to make sure all were welcome and knew what to expect.

How Does This Apply To Incentives and Rewards?

Simple.  Most programs are launched and managed by email/snail mail/youtube, etc.  They are “mass-launched” – but what Steve’s little phone meet-up told me is that we should consider personal introductions to our incentive programs and have PEOPLE introduce them – and have conversations about them – in real time- supported by social media tools if you have the right audience.

I know over the years companies have done away with intro meetings and ongoing get-togethers due to cost pressures and the fact that many workforces are geographically dispersed.  But that’s what makes this “old-school” idea so great.  It uses a simple and cost-effective technology (conference calling) and creates that human connection around your incentive and reward activity.

Specifically…

Sales Incentive Program Launch

Have the sales leadership host a call with the team immediately before the program launches – have a twitter hashtag and intro the program, the rules the awards, etc.  This gives the participants the chance to ask questions and also (and this is a big one) shows the participants that the sales leadership is on board and agrees with the plan.  They are a united team. 

Employee Program Launch (Annual Relaunch)

Exec team has a call – same twitter backchannel idea – with the various division managers/directors, whatever.  Same results – participants get first hand info and a chance to ask questions – leadership is positioned as a united front.  All good stuff.

Before Group Travel Award Operation

Getting 300 Dealers and/or Distributors to get with a program can be daunting for the operations team.  And for participants – a new country or destination can be a real question mark for them.  What to wear, what to bring, etc.  I know the travel company sends this stuff out in the “welcome” packet – but no one reads that stuff.  But if you have a few times set up in advance where a group can call in, talk to the sponsors and the travel staff it could go a long way toward making them feel comfortable with program. 

As an aside – the travel company could learn a lot about the concerns of the participants and be able to help them on site with those issues.

Those are only three ways I can see taking an “old school technology” like a “conference call” and turning it into a customer service and customer engagement activity.

Think about all the ways you could use a simple conference call to “personalize” your next incentive and reward program.

And this isn’t just for launches – think about quarterly updates (public companies do conference calls with the financial world – they find value in the conversation in addition to all the paper they generate) – think about a conversation with the participants broken out by performance (top, middle, bottom)… imagine the info you might gain from a conference call about the program.

I know we’re all “a-twitter” about new social media tools… but a group conference call specifically about your next engagement activity could do more to communicate how much you really care about your audience than any Facebook “like” or twitter retweet.

Net-Net = I took 1,000 words to say “pick up the freakin’ phone.”

 

Why Pay For Program Design?

I have about 200 or so google alerts set up to monitor the web for phrases, words, companies, ideas, whatever, to keep me informed of what's going on. I saw this the other day on Freelancer.com and I was a bit dumbstruck.  Freelancer.com is a site where you can post a job and ask for bids on the job from freelancers (duh..)  My alert linked me to a request from a company looking for help designing and launching a loyalty program for their distribution channel.

From their post on Freelancer.com:

I need someone to help design a loyalty and incentive program. The program is intended to support and drive sales within a complex telecoms distribution model / chain: to increase sales and improve the relationship we have with distributors, resellers and agents selling airtime and prepaid sim cards. 

We are looking for a program design similar to the Boots or Tesco's point system i.e. the program sets to change behaviour and encourage collection of points which can be redeemed against a host of incentives and rewards. The scheme can be points based vai e card or coupon based. 

If you are interested, or you already have a on-line loyalty card system please send us a link of your work. 

Please apply only if you have knowledge and have done something similar before.

Interesting that they would go to Freelancer.com for that (instead of me) but here's the real killer in all this....

Their budget is $250 - $750.

Yup.  Less than a grand.  Now read that description of what they want again.  Complex distribution model/chain, program like Tesco (huge btw)  - linked to fulfillment engine, and oh, yeah - ecard or coupon system too.  Why not ask for cold fusion as well?  Heck - you got the budget right?

But the thing that got me laughing more than the paltry budget was the bids...

4 bids - Average value $588.

I'm guessing they will get one hell of program.

The Real Costs

Just to put this in perspective - if you really want a loyalty program you're gonna need to spend a lot more than $588.  You can't get great business cards for that - let alone great loyalty program design.  Multiply that budget by 100 at least for the strategy - and 1,000 for implementation.  Nothing in this world is free or cheap.  

I take that back - a lot of stuff is free or cheap... and it litters the business deadpools and consumer landfills.

I put this out there to solicit your input.  "I" think this is a bad idea.  But there may be folks who think this makes all the sense in the world.  What do you think?  $588 for loyalty program design?  $588 for your employee recognition program?  

Sure.... 

Lest you think I'm making this up - below is a screen grab of the request... 

 

 

 

Incentives You Can’t Keep May Be More Effective

Traditionally, incentive programs were designed around the idea of “do this get that.”  It’s been an axiom of program design.  Give people a reason to do something and they will do it.  Mostly, we’ve focused on our inner Gordan Gekko and assumed participants are rational and will do the things that maximize their personal ROI on the effort required to earn an award.

And, except when badly designed, these programs work pretty well.  Actually, when badly designed they work even better – but to the detriment of the whole versus the individual… again I’ll cite Wall Street as our cautionary example.

But new research is showing that maybe, just maybe, awarding people with stuff they can’t ever use or own is better for the person earning it – and better for the company offering it by actually spurring higher levels of performance.

Prosocial Incentives

Yeah, you read that right – a new term that I’m sure will be bantered about with the same frequency as “gamification” – is an incentive that, to quote a recent article in the Washington Post on the idea, is

“a novel type of bonus spent on others rather than on themselves”

The article highlights a study done by Harvard Business School, the University of British Columbia and the University of Liege.  To pull from the Washington Post article:

First they researched how the recipients “felt” about themselves after earning the proscocial award and the results:

“…Compared to people who did not get the charity vouchers, the employees who donated $50 said they were happier and more satisfied with their jobs. (The opinions were unchanged among those who got the $25 donation.)"

They then looked at actual performance (‘cuz hey, we don’t really care how they feel do we, we just want to know if the results were better)…

"They decided to study the effect in both sales and sports, giving Belgian pharmaceutical sales teams and Canadian recreational dodge ball teams money. Some were told to spend it on themselves, while others had to spend it on a specified teammate. The researchers found that those who had to spend the money on other teammates performed better, in terms of sales made or games won, than those who spent the incentive on themselves."

The author does note (as I do in a lot of these cases) that this is an academic study and didn’t really control for the myriad of variables within a larger organization but it is an interesting guide post for program design. 

Something for us to consider – if not implement.

Our Recommendation?

I’d recommend you do both – create a win-win-win.  Award the individual with something for themselves – and add a little sumptin’ sumptin’ to the award they can then use on someone else. 

Recipient wins, the social target wins, the company wins.

Pret A  Manger Has a Different Take On Prosocial

The article also references Pret A Manger’s unique recognition strategy which I think is pretty cool too…

"And 'when employees are promoted or pass training milestones, they receive at least £50 in vouchers, a payment that Pret calls a "shooting star,"' Clifford reports. 'But instead of keeping the bonus, the employees must give the money to colleagues, people who have helped them along the way.' The message? You didn’t do it alone, and need to recognize those who helped you get there."

Nice way to really cement the idea that “we’re all in this together.”

Ask yourself – could you do this in your company?  Should you?

How would this impact your next channel incentive program?  If your company has a charity they support – or if your client has one – why not tie some of the awards earned in the program to that charity or cause and connect the earner to it through awards.

I’m not talking about just throwing up an “option to redeem” for charity contributions – I’m talking about you being prosocial and making it an automatic thing – 5% of earnings go toward a charity.

Is this something you’d be willing to do?  Would taking 5% from a budget allocated to awards and moving to social causes really cause a program to fail?

Or, as this research suggests… cause it be more successful?

I’m in the latter camp and think you should be too.

And a video treat for those that might want to consider social responsiblity and including "prosocial" incentives... (video embedded - RSS and email subscribers may have to click through to see video.)

 

 

Related articles

• Engagement Update - No Summer Vacation Here! (enterpriseengagement.org)
• Should You Run an Incentive Program? Free Download. (i2i-align.com)

Use Your Smart Phone to Build Your Award Catalog

I only ask for 5% of revenues when this idea is built.  And it will be.  By me or someone else ‘cuz it’s brilliant, infinitely doable, cool, and did I say brilliant?

But like all great ideas I can’t take full credit.  If it weren’t for @chrisferdinandi and his blog "Go Make Things" I wouldn’t have thought of this the other day.

Chris uncovered an application using QRCodes, built by Tesco Korea (big global grocery company) that is simply brilliant as well.  (I’m using brilliant a lot lately – makes me sound British, no?)  From his blog...

"Tesco recreated an entire grocery store with signage in Korean subways. The layout and items were identical to those in their actual stores. Each item was labeled with a QR code. People waiting for their train could simply scan the QR codes to add items to their list, and have them delivered while they ride the train."

Also on his site is a video of how it works.  It is, have I said, brilliant?

What’s in Your Catalog

So I’m thinking... one of things every incentive company deals with is developing a catalog for award point redemption.  In the past it was paper-based and supported by a big staff of buyers and designers and printers.  Back in the day we'd actually have catalog wars – “mine is bigger than yours” fights and delays in launching to see if we could get a copy of the competitor's catalog and make ours bigger and badder.  We spent a lot of money on those things ($1 Million plus.)  Then the internet came along and everything went online.  Then Amazon.com got in (and then back out quickly) which changed our idea of what “lots of items” meant and now if an incentive company can’t say they have “millions” of items – well – they are just pikers aren't they?

But what if---- what if you could build your own individual and personal catalog simply by using the barcode scanner on your smart phone? 

You can use both QRCodes and Barcodes - there already are apps that scan the barcode and then tell you the price of the item at different stores so this is not a stretch.

Think about it.  Shopping in Kohls and you like that shirt?  Whip out our smart phone – punch the “My Catalog” app and up pops your barcode reader software, takes a picture of the item/bar code and uploads it to your personal online catalog.  As you earn points in your program (and this could be employee, channel or consumer) your app reminds you of what is in your catalog at various point levels and as you hit those levels it asks if you want to order it.  If you say yes... then automagically (I’ll admit I don’t have this all worked out – but hey – I never said it was VC ready) behind the scenes the item is ordered and shipped to your house/work/mistresses' condo. 

So... whadda ya think?  Should I start looking for retirement homes in France?

I know we think autonomy, mastery and purpose are great – but what’s really great is setting goals (internal AND external) and working toward them and receiving the reward WE WANT when we hit those goals.

I think it is brilliant (I know, again.)  But I think chip bag clips are the smartest thing I’ve seen in a while too...

PS... just to be trendy - we could also put a social sharing app in this that let's other people in the program see what you have made public in your catalog so they could add it to their catalog or share info on the item if they already have it (kind of a +1 for awards).  Okay, now maybe it's 10% of revenues. 

Hit me in the comments on via email and let me know when to expect the checks.

 

Killing 2 Engagement Birds With 1 Stone at Sonar6

Today I received the following email from Sonar6 (See image below.)  Their tag line... "performance reviews that don't suck."  Gotta love it.

Full disclosure - I met the principals a couple years back and had dinner with them and fellow FOT'ers @Kris_Dunn and @jessica_lee ... the Sonar6 team were great guys with a great approach to HR software.  I am a non-attorney spokesperson and no compensation was provided.

The Email

Here's an image of the email I received... (click image to go to the video.)

Why I like this...

First...

Like they say in the email - creating the video was a great team-building activity.  I'm sure they had discussions around what was important, what should be included, how to present that information.  If you think about it - that's a great way to garner alignment and agreement on your business proposition.  At the end of the day - their 3-minute video was what every employee should know and believe about their company.  What a great way to ensure alignment.  Wouldn't it be cool if they did a series of these vignettes - each around a different value they bring to the table - create a library of who they are and what they bring to their clients - great engagement... great training asset.

Second...

This is also a customer engagement tool.  They are sending out to their customer base a real picture of who they are and what they do.  Real faces, real voices, real stuff.  Not edited and committee-written emails, brochures, website links, etc.  This is who they are. (okay - some editing - would have been better with an outtakes trailer... )

One Email - Two Results

In my mind this is a great way to kill two engagement objectives with one stone.  Engaging employees with the company mission, values, proposition - and the customer with a real connection to the people who they may just end up working with.  What a great way to pull people into your "tribe."

One more thing...

Could they have assigned different teams with the same task and done some sort of incentive with awards for best video?  

Possibly - but I think the idea of doing the video and knowing it would be used to help the company is reward and recognition enough.  This IS one of the places where incentives may keep employee teams from being authentic and real - forcing them to worry more about technique and style - ultimately, defeating the purpose of the exercise.

Check it out... and ask yourself - what's your video?

 

Incentive Cheat Sheets

As I was putting together thoughts on a post for today it struck me that I've probably put out everything I know about incentives, rewards recognition over the past 6 years.  But with the way we consume information these days - in real time versus consulting a static document or book - some of the old stuff, even though it may be out of sight and out of mind - is still valid.  

So - reaching into the wayback machine I found a few "cheat sheets" on program rules and when to apply different program types depending on your objectives and created a new page on the site called "Reference Documents" - you can link to it from the sidebar.

On that page you will find three documents... 

First... 

Designing programs is hard and full of unintended consequences.  You can help reduce the risk of that with the rules overview download.  In the document we list out the various program types (hit and win, objective based, etc.) and show you the pros and cons of each kind of program.  Not all-inclusive but good enough to help you decide which kind of program structue might work for your goal/audience.

Second...

Ever ask yourself - "how can I _____?" (insert your goal in the blank space.)  

If so, then check out the two documents we included where we list some broad business challenges, the audiences that can affect those challenges and some general suggestions on the type of influence/reward program that could be considered to drive those results. 

We hope you find it useful.

 

Vendor Recognition – Enlisting Additional Business Intelligence

What if you knew what the next big thing will be for your industry?  What if you could almost predict where your new market will be?  Wouldn’t it be great if you could figure out, before your competition, what your current customers (and a few non-customers) would be looking for 6 months, a year or 2 years from now?  Yeah.  That would be valuable information.

Early Warning Signals

One thing I’ve watched happen in the many different industries (including the incentive industry more than once) is that we get caught flatfooted on many changes (big and small.)  We spend so much time worrying about how we’ll make money this week, this month, this quarter – we forget to pay attention to how we will make money in 5 years or 3 years or even 2 years. 

But I know one way to help mediate this issue.

Recognize your vendors.  Yup.  Your vendors.

Outside the Wall

Employee recognition has fast become the initiative of the week.  My google alerts are constantly pinging with a new blog post or article about recognizing employees to reduce turnover, increase recruiting effectiveness, cure the common cold.  Employee recognition is now standard.  And, if you’ve paid any attention at all here on this site you know we are firmly in the “pro recognition” camp.

But many companies still ignore a critical reference point for business success.  Vendor relationships.

The Evil That Provides Insight

Vendors should be considered part of your recognition ecosystem and should be evaluated and recognized regularly. 

“But, vendors aren’t real people.  They are there for us to beat up for price concession and take advantage of when the bar bill comes around.  Why should we spend anytime recognizing them?  They’re just a necessary evil – they’re just, well, vendors.”

Vendors Are People Too – and Smart Ones

Here’s why your vendors should be part of your recognition strategy...

1. Many processes, products, sub-assemblies and services are being outsourced today.  Companies are focusing on their “core competencies” and leaving the non-value add stuff to someone else (read “vendor”.)  I’m sure you’ve got more vendors today than ever before.  Your vendor performance is as critical to your success as your employees are.  In fact – many vendors spend more time in you offices than your employees do.  Keeping them focused on your goals and objectives is too important to leave to chance.
2. Vendors work with other companies.  They see what you don’t.  They see what many others are doing.  They are an early warning system for new applications and ideas.  They are working on a variety of opportunities that are probably adjacent to what you do and can provide interesting information on what is going on the space you occupy.
3. Vendors are people too.  They will help those that help them.  Treat them like crap – they probably won’t tell you a competitor is considering a new process or procedure that could shave millions off the cost of their service.  Why should they?  You’ve been taking advantage of them and treating them like a stray dog.  They will simply let you continue to make mistakes, charge you for them and wield the specter of “out of scope” when the changes hit.
4. You spent time and money doing the due diligence to find the smartest, best vendors (or for those enlighten companies – partners) to help you be successful.  Why spend that energy to get the best and brightest working for you and then treat them like crap?  Doesn’t make sense for employees –doesn’t make sense for vendors either.
5. It’s the right thing to do.  It’s just plain good manners my friend.

I’ve probably not spent as much time on vendor recognition and reward as I should.  In fact one the largest engagements we did this year was all around how to best recognize vendors to drive future business.

Vendors Are Really Employees With W-9s Instead of W-2s

Vendors are a more important part of your business success than ever before and should be an active and important part of your recognition strategy.  They will appreciate it – and when they appreciate you – they help you.  Running an effective and visible vendor recognition and reward program will pay dividends for years to come.

So – next time when you meet with vendors for lunch or drinks – at least pick up the freakin’ tab. 

It’s the right thing to do.

 

 

Related articles

• Don't Launch Your Recognition Program If Leadership Sucks (i2i-align.com)

Designing Incentive And Rewards Programs – What’s the Frequency Kenneth?

Probably the hardest thing I do on a daily basis is explaining why there isn’t a foolproof answer to the questions my clients ask.

“What works?”  

“How do I motivate my people?”  

“What’s the best way to craft a recognition program?”

“Who should be involved in the program?”  

“What are the best practices in incentive design?”

 

“What’s The Frequency Kenneth?”

My goal when starting this company was to provide honest, unbiased, untainted by award, quality incentive and reward program design services.  I wanted to give my clients what they weren’t getting – and combat what I saw as malpractice by many incentive and reward companies hell-bent for leather to sell you a toaster, a trip, a debit card. (btw - interesting connection to motivation and the REM song - check it here...)

Unfortunately, as Michael Corleone says in the Godfather Part III,

“Just when I thought I was out... they pull me back in.”

I keep getting the same questions – questions that allow my clients to feel comfortable they are following a plan, a model, a formula.  Formulas make us feel comfortable.  Formulas give us a “foundation”, no matter how weak, for our decisions.  My clients want an answer.  And, unfortunately, the answer many times is “it depends.”  No pat answer

2/3rds Science - 1/3rd Art - 1/3rd Stuff I can’t Control

My canvas is people.  And, as I’ve said at many seminars, webinars, and meetings – people are infinitely variable and therefore don’t fit formulas perfectly.  There are guidelines, generalities – things you can do to increase the odds of achieving your objectives, but there are no rules.  Rules are for physics.  Rules are for children.  Rules won’t work when trying to guide behaviors and drive engagement.  People are just too...different.

The best you can hope for is to know enough about what drives decision-making and leverage as many potential triggers as possible – and even then expect some interesting and unpredictable results.

Frameworks As Security Blankets

Dan Ariely – professor, author of “Predictably Irrational”, and “The Upside of Irrationality” (highly recommend both BTW) – has very interesting video on his blog – I’ve embedded below (email and RSS subscribers may need to click through to see the video.)  I briefly describe the video below so if you want to watch first – go now – about 5 minutes.

 

 

It struck me that like the marketing Execs discussed in the video, many of my clients are looking for “THE MODEL” – the rule book.  But as Ariely says – there aren’t really any models and any model you pick has “some” validity.  Consultants are great at this – find a way to package a thought process – pick some letters – make it fit and viola – you’ve got a sellable solution to a client’s problem.  

Think about Ariely’s model for marketing – FN-LN 

FN Framework = Design  -  Adoption  -  New Products

LN Framework = Attitude  -  Research  -  Image  -   Education  -  Learning  -  Yield

For those of you who haven't seen the video yet... Look at those frameworks – closely.  

Remember the framework was designed and presented by Dan Ariely.  Look again.  

Ah... now you get it.

The “Incentive Model”

The incentive industry has used a few over the years:

• Motivation = Communications x Training x Reward
• Performance = Ability x Preparation x Effort x Will
• Motivational Force (MF) = Expectancy x Instrumentality x Valance
• Performance = Ability x Motivation
• Effort = Drive x Habit x Incentive
• Performance = ability X motivation X organizational support

Sometimes they go all mathy on you and add the “f(x)” at the beginning and maybe even raising it to a power of some sort – usually something to do with their unique and patentable award mix – making it look more like a “real” formula like this:  

My point here is that don’t look for a formula... look for the generalities that explain as much of our human variance as possible.  No formula, model, construct, will explain our behaviors.  Relegating your motivation, engagement and reward discussion to a formula ensures you will be playing into the hands of the incentive supplier.  Remember who wrote the formula.  What do you think their real intent was?  Drive performance or drive redemption?  Just asking.

So What’s The Frequency Kenneth? 

I don’t know – and neither do they.  I do know this – a formula isn’t the right answer.  A thorough understanding of your particular support systems, cultural history, brand identity, and talent make-up is what really drives program design.

Wait... is that a new model?

Coming soon to a four-square PowerPoint slide near you....

Related articles

• Rules for Good Incentive Programs (i2i-align.com)
• One More Time - Worry About YOUR Employees Not Theirs (i2i-align.com)
• Worst. Incentive. Recommendation. Ever. (i2i-align.com)
• Active Communications VS Passive Communications in Reward and Recognition Programs (i2i-align.com)
• A Great Example of A Bad Incentive (i2i-align.com)

Webinar – Incentive Design and Wellness April 19 Noon EDT

I’ve been doing this blog for almost 6 years (that’s about 154 in internet years.)  My goal has always been to help companies design the best influence program using incentives, recognition and rewards.  

It’s been a slog.  Too many programs are still badly designed and too many clients still aren’t getting the value they should in their incentive programs.  So... to further the cause, on April 19th at Noon EDT I’ll be hitting the internet airwaves providing color commentary for a webinar on designing effective incentive programs.  It's part of the Workforce Management Benefits 2011 Virtual Conference.

Well, not exactly.  I’m providing a bit of an intro section – maybe 20 minutes or so – on the elements of good incentive program design for Virgin HealthMiles.  I’ve not used them for a client, nor am I implicitly recommending them but they asked for some support – and I’ll do just about anything to get what I think is truthful and accurate information on incentive program design out to those that need it.  I’ve checked out their offering and it’s solid so I feel comfortable being part of their efforts.

Still Doing It Wrong

It is still surprising to me in this day and age of “the google” that so many incentive programs are designed poorly.  I have some theories (some involve conspiracies – maybe Coast to Coast AM with George Noory will call?)  Hopefully, after this webinar there will be a few more folks with the proper knowledge of program design out there helping me with the cause.

So Paul, what does the webinar cover?

Thought you’d never ask.  There are two parts.  First, I’ll walk through what designing a good (great?) incentive program takes.  The second part with be a walkthrough of how the Virgin HealthMiles platform takes advantage of the elements I described.  The cool thing is that I put together my section without input or editing from Virgin HealthMiles – and their section pretty much conforms to what I know should be done– so I like that.  We call that alignment folks.

Without giving too much away, I will be discussing...

• Why many programs are poorly designed
• What incentive planners need to think about before designing a program (and what to watch for when your “incentive expert” supplier makes a recommendation
• Some examples of bad vs. good incentive goals
• A pretty good summary – call it an elevator pitch – that you should print out and put on your wall to provide guidance the next time someone asks for an incentive design.

I’m looking forward to the discussion and I’m hoping a lot of you sign up and listen in and provide feedback.

I’ll probably put the slides up on slideshare once I’m done so you’ll be able to download my section.  I’ll let you know when that happens.

Please tune in – it might save you some time and money at some point.  And that’s a good thing, no?

 

Related articles

• Impersonal Incentives Are More Expensive (i2i-align.com)

Impersonal Incentives Are More Expensive

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I’m doing a preso on HR.com’s “Rewards and Recognition Virtual Workshops” at 12:30 pm EDT today.  Listen in.  It will be fun.

But, prepping for that presentation made me think of the whole incentive program goal setting process.  

Typically it goes like this...

ACME Widgets determines its sales goal for the year.  Say it is 120% of last years’ sales.  They go to the Sales VP and tell him/her the goal.  The Sales VP calls the incentive supplier and tells them they need an incentive program to drive a 20% increase in sales.  The incentive company comes back with a program design that:  

A) Sets a sales target of 90% of the 120% goal (approximately 108% of last years’ sales) and awards points for each sale from 90% of the 120% and then doubles the points after that level (btw - from a design standpoint – the company actually gets an 8% increase before awarding a single point;) or 

B) Rewards everyone in the sales force that hits 120% of last year with a trip to Hawaii.

Those are the two basic options.  Reward incremental sales in points driving folks to the 120% number or reward everyone who achieves this years’ goal (20% more than last year.)  There are variations on the theme but the net-net is the program is designed to get the sales person to strive for the +20% figure.

Paying a Premium for Your Goals

The thing that no one seems to recognize in this scenario is that what the company is really doing is paying a premium to get the sales people to focus on the “company” goals.  The 20% increase is not the goal of the sales person.  Nowhere in the example did the sales person articulate what they wanted.  The entire program is designed around the company needs, wants, desires and goals.

This is a lazy way to do the program.  In effect, what you’re saying is...

"Here’s what I want – you go look in the catalog and decide what you want.  If we’re lucky – what you want will add up to a 20% increase I want.  If not, too bad.”  

This is a lose-lose scenario.  The company didn’t get their 20% increase and the sales person didn’t get what they really wanted either.

Because the company didn’t find out what their sales people wanted they are actually (IMHO) paying a premium through higher point rewards for sales effort in order for the sales person to shift their attention away from what the individual sales person wants, to what the company wants.

What If It Was About Them?

What if we worked backward on this (and I won’t take credit for this idea... it came from someone I worked with about 5 years ago)...

Ask each sales person what they wanted to accomplish this year.  It could be to take a vacation with the fam to Disney, could be a new Harley.  Based on their desires, goals, dreams – the Sales VP and the sales person worked together to determine what they would have to sell/produce to get that award.  If it adds up to 20% great.  If not – what’s the next thing on the sales person’s “to-want” list?  Add that to the mix and put that under the first thing.  Between the sales person and the VP, they will come up with a personalized list of goals (not the % kind – the personal kind) that, when taken in total across the sales force, will net the company their stated 20% growth figure.  

Not each sales person needs to hit 20%.  Some may hit 25% growth – based on their needs/wants/desires that year.  Others, may only be in the 10% range.  I won’t be so Pollyanna as to say you should reward folks for below 100% (unless there is some mitigating factor – like the economy!)

But here’s the kicker... I’ll bet my reputation and my fees on this...(if someone wants to take me up on it) the overall cost of the “wish list” will be lower than the cost of points and/or trips would be from a program designed from the goal “number” backwards.  Why?

• It has been my experience that people will set higher goals than the company normally does (remember – a lot of the time the number they hit last year wasn’t them at 100% effort – more likely 70% - and they know it.) 
• When the focus of the sales person’s goal is personal (not some company derived number) it is more desirable.
• When someone has a say in the goal development they are more committed – it’s their reputation – not some no-name in Sales Planning or Finance’s reputation on the line.

It’s easy to test this theory.  If you have a “points” program or other program in place, go to a few sales people, ask them what they really want, work together to see what they need to do to get that and compare the cost of that to the cost of the points/trip that would (will) be rewarded if they hit that number.  Go do it – I think you’ll be surprised.

Does this process eliminate a catalog solution?  Nope.  The process simply translates a company goal in to a personal one BEFORE you start the program.  That is the key influence technique.  When the program is announced, the individual is given their list of “desires” – and you track against that list.  At any time during the program, the sales person can adjust and manage their “wish list.”  Remember – it’s THEIR list now - not yours.  That makes all the difference in the world.

Being Impersonal Is Costing You Money

So ask yourself – are you paying a premium on your reward program just so you don’t have to talk to your sales people?  If you’re running a program that requires sales people to determine their goals after you’ve determined yours, you probably are.

Related articles

• Incentive Roll-Over Plan - Or "Don't Run That Same Annual Sales Incentive" (i2i-align.com)
• Removing Imagination from Your Performance Discussion (i2i-align.com)