Incentive Intelligence

All Motivation – All Week – Motivation Show

Starting today I’ll be skulking around Chicago for the next 4 days.  The annual Motivation Show is in town and I’m making the annual pilgrimage to motivation mecca.

According to “inside sources” there should be over 8,000 people (some say as high as 10,000 – some say lower – but who cares – it’s a bunch!) – either as exhibitors or looky-loos.  I’m in the latter category.  

I am not exhibiting.  I am speaking at two different places…

Tuesday - I’m talking social media at the IRF education day summit.  Only one of many speakers – but I’m sure it will be the best (kidding – they are all good.)

Wednesday - I have a solo gig called “Responding to the Assault on Incentives” where I’ll walk through how to talk to clients and your own folks about incentives and their effectiveness and need – even in today’s more “enlightened” business world (think zappos and “if-then” awards coexisting.)

Then – during my free time…

I’m really hoping to do more (some) video this year of the show floor with some interviews and commentary to post either at vimeo or youtube.  I keep saying I’m going to do this but it always turns out to be harder than all the articles on video blogging say it is.  Maybe I’m just video-challenged.

I’ll be tweeting – hopefully during my presos with the help of a PowerPoint plug-in – and during the times I’m wandering the floor.  I’ll for sure be using the “official” hashtag #moti – but I’ll throw in a #good, #bad, #ugly tag now and then as I run across stuff.  Unfortunately for you all – my snark instincts go on high alert at the show so expect me to tweet out some rather snide remarks.  If I don’t it’s ‘cuz I’m either busy or I just didn’t find anything you’d find interesting.

Pay attention on Wednesday afternoon!

I (we) have an announcement – one that smart incentive companies will jump on – and not-so-smart ones will deride.  But I’ve got thick skin and I know when I’m right (even when I’m wrong.)  I think it could change the industry (or is that just hyperbole to get you to watch for my announcement – probably both.)

So – as you read this – I’m “en-route” to Chicago – the city of big shoulders, hog-butcher to the world, and for a few days in October - home of cheesy swag, gift cards, chocolate pillow gifts in the shape of corporate logos and all other manner and madness associated with “motivation.”  Abe Maslow would be proud.

It should be fun… it should be funny… it should be interesting.

See you in Chicago!

Fairness Is Relative – That Means it Changes (For Those in Rio Linda)

I had this post queued up for a while and couldn’t figure how to use it until I saw this post by Steve Roesler who writes at “All Things Workplace.”  His post explores the fact that what we think is fair is a relative thing – it is a function of what the “others” have or plan on having.  

Fairness isn’t a set point.  Fairness is a point relative to other points.

 

Incentive and Reward Programs Need to Be Fair – And They Need to Change

When designing incentive programs – especially when they are focused on a specific job function – say sales – there has to be some discussion on the relative fairness of the program.  A program that over-rewards some folks relative to the rewards others get will have a negative effect on those that don’t get the big award.

This isn’t a uniquely human issue.  Experiments with monkeys show they too seek fairness and equity with respect to rewards.  In this video on the Situationist Blog, Dr. Frans De Wall from Emory University describes an experiment in which monkeys were given either cucumbers or grapes as a reward.  When one monkey is given cucumbers and the other is given grapes – the one getting cucumbers will rebel, throw away the cucumber and refuse to perform the behavior.

They even give it a real scientific name – inequity aversion.

The video goes on to explain that in “normal” times – when we’re getting pretty much what we expect and the gap (while probably still large) between what “I’m” getting and what “they” are getting is a bit smaller we live with it.  However, when that gap grows we start to rebel.

Incentives in today’s environment need to be cognizant of this issue.

 

Cuts To Salary, Benefits, Rewards

As companies pare back their benefits and rewards for the “rank and file” but keep big bonuses and other perqs steady for the top brass the gap will widen – and widen to a point where it’s not just that people will stop responding to the incentives – they will begin to operate in a negative way.

Rewards need to be contextual.  

What you paid in rewards last year may not be the best payout this year.  That trip to Hawaii for top sales people may have been the right reward in 2004 but it may be more prudent to send the top people to Arizona this year.  Don’t assume that what you’ve done is what you should do.

Every program should be reviewed and analyzed to see if it still fits within the “fairness” window.  You may find that many programs that initially were fair may seem decidedly unfair in today’s business reality. 

I've said it before and I’ll say it again – Incentives are NEVER plug ‘n play.

Where In The World Is Incentive Intelligence?

That headline can be read a couple of ways.  

First, from the perspective of what I was thinking when I started this site.  

Too much was written and shared on the web that was plain bad advice relating to incentive and reward activities that I felt it necessary to help inject some critical thinking and analysis into the conversation.  I also felt that too many organizations were implementing badly designed and in some cases, needless, incentive activities.  Our goal was to put some intelligence back in the incentive and reward space. 

The other way to read that headline is that we’re all over the place the next few weeks.  Our effort to bring intelligence to incentives has increased the demand for our point of view – online and in-person.  

So today I thought a summary of where we’re going to be over the next few weeks would be helpful.  Hopefully you can set your calendars and your clocks to get all the yummy goodness we’ll be serving up.

Tuesday Sept. 28, 2010 – Noon EST (or EDT if you prefer – either way it is Noon where I am) – Twitter Chat for KMers.org.

I’ll be leading a twitter chat for the Knowledge Management community at KMers.org on tomorrow.  For those interested KMers.org is a community website focused on hosting and storing twitter chats around the #KMers hashtag.  Their goal is to use social media via twitter chat and a CMS tool (Drupal) to help KMers share information about the practice of Knowledge Management.

My topic on Tuesday will be around using rewards/recognition/incentives to drive sharing behaviors.  Check it out.  Love to hear from you.

Motivation Show Oct. 12 – 14, 2010

Two Presos and Much More

I’m lucky enough to be presenting twice at the show (and you may be lucky enough to be in the audience?)

First up…

I’m adding our point of view on social media within incentives and reward programs during the IRF four-part workshop on “Education Day”, Tuesday, October 12. 

Second…

I’m on my own with a session on October 13th entitled : “Responding to the Assault on Incentives” where I’ll provide our perspective on how incentives fit into the “new age” thinking that’s been bouncing around the interwebs.  You’ll walk away with a way to position traditional incentive and reward programs within the context of new progressive non-traditional engagement activities.  I’m hoping for great conversation so please register if you’re going to be in Chicago on the 13th… Check our rough video promotion of the session here.

Third… Connecting To Social Media "Live"

Influence Insider Blogtalkradio going “on site” at the Motivation Show

Normally we try to do the radio show on the first Wedensday of the month – but this month we’re going live at the Motivation Show.  Inspired by @steveboese when he did the HRHappyHour live from the Fail Spectactulary Event a few months back I’mma gonna try to do the same at the show. 

Stay tuned and I’ll hit you with the details.  Tentatively I’m thinking Thursday at noon but that could change.  If you are at the show and want to be on the show hit me in the comments – we’ll work something out.

Live Video?  

I’m bringing the flip and also my Droid x (which has some great video capabilities) so I’ll be looking for reasons to do some live video and also some video posted to the site.  Again – want to be get your face out there hit me in the comments and we’ll set up a time/place to chat on camera.

Live Twitter Chat – Of Course

I’ll also be using the hashtag #moti while on site so you can follow any and all the twitter chatter you want.  Anyone interests in a tweet up or two – jump on “the twitter” and add the hashtag and we’ll get something going.

October 28th/29th – HR Reinvention Experiment – Omaha, Nebraska

I’ll be traveling to Omaha at the end of the month to help out with Jason Lauritsen's ambitious effort "The HR Reinvention Experiment." The HRRE (I made that up) is an invitation-only gathering of the Midwest’s top HR leaders to chart a new course for the future of Human Resources.  There will be speakers, there will be discussion, there will be discourse, and there will be cocktails.  We will dialogue, discuss and perhaps bicker a little.  At the end of the Experiment, we will be different.  HR will be different.

So that’s my October.  Feel free to jump into the comments section if you want to hook up at the Motivation Show and be on the radio or in a video.  I’m open to almost anything except a late night infomercial on your company.  Other than that I’m sure we can accommodate.  Let me know.

If you have a need in September for a great presenter who's fun to be around, accessible to the audience, pretty darn cheap and usually buys the first round - AND - can talk about how to influence behavior - I'm your guy.  Let me know how I can help.

Recognition and Rewards - HAWAII 5-0 Style

I know most of you think I spend every evening parsing TED speeches and dreaming up incomprehensible incentive plans.  Well – some nights but not “most” nights.  After about 9:00 pm I’m pretty TV focused – gotta get comfy for The Daily Show and Colbert.  I surf around a lot and have rather eclectic tastes.  Just about anything except “Dancing with the Stars” is fair game.

I happened to hit on the new “revised” HAWAII 5-0 last night.  I’m just old enough to remember reruns of the show – can’t say I ever saw an original episode but then again we went a few years without TV as kids when we lived in Japan.  While it’s not going to compete with the Sopranos or Deadwood for writing and story/character development, it was a fun way to spend an hour.

So what has this got to do with recognition and rewards?

Two things…

First… 

If you’re a manager take heed of the following quote from the Danno character in a conversation with MacGarrett on why he’s a cop…(they don't allow embedding but the video is available online here.  It’s roughly 30:40 into the show. You'll have to suffer through some ads -sorry.)

“I need this.  The truth is this is all I got.  I want to do what I’m good at and I want to be reminded that I’m good at what I do.”

Isn’t that what every employee wants?  To do those things they are good at and enjoy doing and have someone recognize the fact they are good at it?  Say that again.  

Second…

At the end of the show, after thwarting a major human smuggling ring,  MacGarrett gives the Danno character a gift certificate to a hotel for the weekend.  Explaining that he knew Danno had the weekend with his daughter coming up (….and he knew Danno lived in a dump) he thought Danno might like to take his daughter to the hotel and have a getaway with Dad.  Danno gets to have a father/daughter weekend and not be embarrassed by his living set-up.

Even through chasing bad-guys, getting shot at, putting together an elite strike force team in less than 24 hours, MacGarrett still had time to listen and understand the needs of his team-mates.  He used that knowledge to develop a specific recognition award that connects with the recipient.  Whadda ya think – Is Danno an engaged employee now?  Let me ask you - if MacGarrett can do with all he had going on during the show - you surely can take some time to make sure you let people know what they're good at.

These two reward and recognition references alone will get me to tune in again next week.  But I'm more curious to see if they bring up Maslow’s Hierarchy of Needs.  Whadda ya think… Is Chin Ho self-actualized?

Adjusting My Fit… Courtesy of a Conversation with zappos – Part I of III

This is post 1 of a 3 post discussion with Jamie Naughton – Cruise Ship Captain at zappos.  Parts II and III will be forthcoming.  Part I is the setup and big picture, Part II is the specifics of some of the engagement programs conducted at zappos and Part III is where I “adjust my fit.”

 

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Every once in a while you need to adjust the fit of your thinking.  Often we can get into a talk-track that is hard to break out of and it get’s comfortable.  Too comfortable.  You need someone to give you a third-party opinion and provide some perspective.  

Think of the show “What Not To Wear.”  In most of the cases – the key to updating and invigorating the style of the show’s target is giving them an “experts” opinion.  That’s what Stacy and Clinton do.  They provide input (snarky sometimes but input nonetheless.)  For those that know me you already know that the only reason I am aware of Stacy and Clinton is because of my wife – you know it’s not ‘cuz I’m that into the whole style thing.

But advice is only half the equation – change is also dependent on the target’s willingness to “adjust their thinking” and consider the input they are given.  If they can’t break out of what is comfortable, they will never change – even if it is a little change.

That’s what I needed the other day.  And the wonderfully accommodating Jamie Naughton - “Cruise Ship Captain” at zappos - provided me with the needed “fit adjustment.”  Before we get to my “adjustment” let’s take a few paragraphs and get the real big picture out of the way.

Zappos…

For those just coming back from your walk through Tibet – zappos is the darling of the employee engagement world.  From $1,000,000 to $1,000,000,000 in sales in 8 years (yeah … that’s 10-fold), purchased by amazon in 2009 for over a billion dollars, raved about, talked about and referenced as the new gold standard in customer service.  And from my experience they deserve it.

I connected to zappos through a friend (@femelmed) who had a connection at zappos and I asked if she could introduce me to someone at zappos to talk about the way the reward and recognize their employees.  Fran shot out a note and within 15 minutes of her doing that I had an appointment set to talk to Jamie.  

Now – ask yourself this – how many $1 BILLION companies respond that fast to something as potentially dreary as talking with me?  Not many.  I’m impressed before even before we’ve talked.  That my friends, is customer service.  If that is how they treat lil’ ol’ me – you know how they treat their paying customers.  

I’ll say this right now – BUY from zappos.

My Goal…

I wanted to talk to zappos in order to understand what they were doing to engage their employees.  We all know about the wild costumes and the impromptu parades… but I figured there had to be more.  

I was secretly hoping there would be a bunch of traditional incentives programs driving performance with a layer of press-pleasing “engagement” activities as icing.  

And I was mostly wrong.  

I was hoping for more Glengarry Glenn Ross and got… dare I say it… Dan Pink.

It’s All About The Foundation

Jamie outlined a few of the various ways zappos engages their 1900 employees (1,000 in the KY warehouse and 900 in Henderson, NV.)  Approximately 400 are call center employees (about ½ the NV contingent) and the rest are split between Merchandising, IT, Administration, etc.    Jamie has been with zappos for almost 6 years and has been witness, and party to, the tremendous growth in their employee base.  Jamie noted that when she started working with zappos there was just a hair under 200 employees.  So she’s seen 10-fold growth as well.  

Zappos is Doing it Backwards – By Conventional Standards

So the question is – “How do you manage that kind of growth and keep engagement high?”

The answer is:  By having a strong corporate culture and hiring to that culture.  And most importantly – recognize to that culture.

Zappos is famous for their 10 core values and when Jamie and I were talking about them I jotted down a note to make this point…

Most companies create a mission and values statement on what they “want” to be known for and then hire for positions and hope they can convert the new hires to the values prominently displayed in the visitor’s waiting area of the company.  Zappos, on the other hand, created a mission/values statement based on what they “are” – and hired people to that standard.

Do you see the profound difference?  Zappos “is” something (driven mostly by Tony Hsieh in the early days – and then codified in 2006 or so.)  Zappos finds people that match them culturally – instead of just looking for skill sets.  The combination of skills and culture is what separates zappos.

Now I recognize zappos is an outlier – an anomaly.  

But as we’ve talked before on this site – driving performance requires that you look for positive deviants – those that are doing it different AND getting results.  Zappos is a positive deviant. 

It’s easy to say these things and much harder to do them.  Part II of this series will talk about some specific things done at zappos that prove they walk the walk.

So I’ll end post one of my three-post series with this quote from Jamie…

“You can have all the incentives, recognition and rewards you want, but they are worthless without a foundation.”

And that foundation is a ruthless focus on protecting the corporate culture.  I know it’s not news.  We can see thousands of tweets a day about culture driving performance.  But there is a big difference between saying you’ll go on a diet tomorrow and going on a diet NOW.

To quote management guru Elvis Costello…

But everybody is going through the motions
Everybody is going through the motions

Are you really only going through the motions?

Lip service is all you'll ever get from me
Lip service is all you'll ever get from me
Lip service is all you'll ever get from me

Zappos doesn’t give lip service.  

Next post – what specifically did I learn about zappos reward and incentive initiatives?

Social Media/Networks – I Just Can’t Quit You – But I Do Need a Break

I Love Social Media

I do love it.  It has brought me business, friends, acquaintances, information and ideas.  Social media has allowed me to think differently – it has changed some opinions, created a few and reinforced many.  But I think I’ve moved past the infatuation stage and into the real, more mature, “love” stage. 

Social media used me.  And I allowed it to happen.  I welcomed it and enjoyed it.  But no more.

Like any relationship, at the beginning you’re awash in the euphoria of endorphins with little intellectual involvement.  Let’s face it – if relationships led with logic the species would have died out many eons ago.  That little chemically-driven stutter at the beginning of every relationship gets us past the negatives and firmly invests us in the new person – or in this case – the new technology and (gasp – should I say it?) the new normal.  We need to be blinded for a while in order to get involved.

Unfortunately, like our real-life relationships - we don’t stay in our drugged state forever.  We slowly begin to come out of the endorphin rush and one day we wake up and wonder who really is in our technology bed.  I’m at that point now.  I love you social media – but I’m not “in” love with you.

It’s Not You. It’s Me

And to make matters even worse – my love affair – like yours - is a multi-partner gig.  It’s not just me and one – or even me and a few – it’s me and a TON of other people.  It's not like it was in the beginning.  When we were all early adopters we were all happy, shiny people enjoying new-found connections.  Everyone basked in the coolness of being in front.  And that fed the euphoria.  I confess I was one of those.

But… others are joining the group – and they are starting where I was.  They are the blind and the happy – and I am now jaded and bothered.  My social network relationships aren't in synch anymore.

It’s my problem.  I’m not in the same place as SM today - and I shouldn’t hold that against anyone who is just now jumping in.  I just wish I’d have known that I would have drifted apart when I started down this road.  And for those of you jumping in - this will be you some day too.

Each of the networks I am involved with has changed.  I’ve changed.  I just didn’t realize how much these changes would impact my feelings about social media/networking (are those really interchangeable?  I don’t think so but most folks do.)

LinkedIn, Twitter and Blogs, Oh My

I’m not blaming anyone in particular.  It’s just the way things go.  My feelings about the different networks are my feelings – you may feel different.  But as of this writing – Linkedin, Twitter, and blogging are on my “social media break” list.

Linkedin was a nice little site that allowed all of us to inflate our credentials and connect to other people who were too polite to point out our title/role/impact inflation – and we kept our mouths shut about theirs as well.  It was a nice little place for “business” relationships to start.  Over time they added a few little widgets that allowed us to round out our online persona.  That was nice.  Employers, employees, recruiters, job-seekers, sales folks, buyers, etc. could get a nice picture of you and your capabilities.

Then it became a race.  Link envy took over and the number of connections became the goal – not the value of them.

The next big step was groups.  Initially a good idea and I’m sure there are many Linkedin groups that foster a great exchange of ideas and information and add value to the individuals associated with them.  However, I’m seeing more and more groups become seething pits of self-promotion and spam.  Some of the new changes for Linkedin groups, like eliminating the “news” section, has made it even more difficult to separate the wheat from the chaff.  Groups are almost useless unless continually moderated with an iron fist.

Talking about about wheat and chaff –Twitter.  

When it was new it was very cool.  It was the center table in the high school cafeteria.  But like Linkedin before it, the currency of influence isn’t content or real connections any more – it’s followers – and following.  And the recent FastCompany stunt on influence hasn’t helped any.  It’s just made it worse.  (What did our parents do to us to make us need, demand and require this much validation?)

Don’t get me wrong - there are great conversations going on within Twitter.  There is always the top part of the normal distribution where value resides.  Unfortunately, the distribution for twitter is getting very, very wide – and the value is now only at the very tippy-tippy end of the tail.  The average tweeter hasn’t a clue how to best leverage it and it makes it harder to find the real value.

As an example – I follow @chrisbrogan (who has about 150,000 followers – props man.)  Every day I’ll get about 100 RTs of Chris Brogan’s tweets.  Does the person with only 400 followers really think they have more reach than Chris Brogan?  Isn’t it entirely more likely that their 400 followers probably already follow Chris Brogan and their addition to the tweet stream has 0 marginal value?  And to simply retweet Chris Brogan with nothing added – no comment, no witty rejoinder, no nothing = no value.  

And while I’m at it… please – stop RT-ing Seth Godin – anyone in business that’s been alive for more than 10 years either follows him on Twitter, subscribes to his blog or doesn’t really give a crap about his daily brain droppings.  If you’re following me – and I’m following you – chances are we’re pretty much like each other and anything you follow I follow too.  

It’s the weird stuff I want – not the popular stuff.  RT the blog I don’t know about – not the one that’s featured in Time Magazine or the Wall Street Journal.  This is my fault too… I need to find weirder people to follow.  I only need a few folks that think like me – the rest should be wildly different.

And speaking of blogs…

The common wisdom on the web is that everyone should blog.  Here’s a piece of advice …. No they shouldn’t.  

Fueled by twitter tons of new blogs are clouding up the blogosphere.  It’s harder than ever to find good, quality content.  Techonorati used to be helpful but that ship sailed.  I’m not here to tell you whether you should blog or not but here’s a clue: If there is even a question in your mind about whether you should blog – don’t.  Only blog if you would do it under threat of being fired or sued.  That’s when you’ll know you have the passion and point of view to create quality posts and be in it for the long-run.  And for Pete’s sake – write about something interesting – not just what is already available in the normal news media.  Put a spin on it… be funny, be sad, be mean… be something.

So What Does This All Mean? – It Means It’s All My Fault

Social media/networks are good.  I love them.  But it does mean I need to go “on a break.”  I need to start over.  Now that I know what I’m dealing with I can set up my monitoring and usage of social media to eliminate the things that have made me sour recently.  I might even date around - but remember - we're on a break!

1. First– Linkedin… going to quit a lot of groups.  Going to start contributing more and call BS on those that don’t or those that abuse.
    
2. Second– Twitter… going to be unfollowing like a mad-man over the next few days.  Then I’m going to set up my tweet deck so I can find the pony in the pile.  
    
3. Third– blogs – going to be pulling some RSS feeds off my reader.  One great post every other month isn’t going to do it for me anymore.  I’ll be starring stuff in Google Reader and I’ll be checking every week to see who didn’t get a star – then you’re on my “cut” list.
   
   

I do love you Social Media – I can’t just quit you – but I can take back control.  

I know I’ll miss that random rush when the tweet stream refreshes.  I know I’ll worry that I’ll miss that one post that will change my life or the tweet that will let me know that @scobleizer has a new camera or how I can whiten my teeth.  But I’ll survive.  I’ll probably lose a few friends here and there –but my sanity is important and right now social networks and social media is slowly eroding it with top ten lists, praise of twitter and the endless quotations from Einstein.  

BTW – for those of you who do send out a lot of quotations – no one appreciates them - but your followers are too polite to tell you.

Wellness Incentives - Give or Take?

Four or five years ago I went to the SHRM conference in San Diego to launch a product for my old company (if you were there we were the guys with the Donald Trump look-a-like in our booth.)  While there I bounced around the floor checking out the booths.  There were a couple of companies touting their "wellness" incentives.  Not too many.  So back then it was a good idea but not quite mainstream.

Fast-forward to today and you can't swing a cat without hitting someone selling a wellness incentive idea.  Getting employees to care and act on their health is big business.  

Big but elusive.  The interwebs are awash in analysis and information on what will work and what won't.  Much of it contradictory.

(BTW - for a great resource and commentary on wellness communications check out my buddy Fran on freerangecomm.com - follow her site and her personally on twitter - she's good people.)

The Hard Truth

My own opinion is that wellness programs won't work long-term for a variety of reasons...

1. The personal health rewards (or penalties such as death) are typically far into the future so we discount them to almost nothing.  It is hard to be motivated to achieve a big award granted in the future when I can get a small, quick award today (ie:  that Big Mac or that cigarette.)  I posted on this phenomena here.
    
2. Companies in their heart of hearts really, really don't care about their employees' health - they care what affect their employees' health has on their bottom line.  Cash not compassion is their motivation - and employees pick up on it and dismiss the wellness program du jour.  The few companies that have senior leadership involved and invested in wellness are the ones succeeding.  Not just because they see a monetary benefit - but because they also care about their employees.  I posted on this here.
    
3. People will change if and when the majority makes changes.  Consensus and social proof are powerful influencers.  If the majority of the company isn't playing along - failure is assured.  Social network analysis has shown that weight gain actually follows your network.  If you have heavy friends in your network you are more likely to gain weight.  Weight becomes a norm for your group.  Health can work the same way. How consensus works in social networks was the focus of this post a while back.
    
4. Employees don't really have skin in the game.  I can run all the programs in the world - but if I don't really feel the pain of my behavior I won't make the change.  Most employees believe health insurance and the rates they pay are entitlements of the job (see post yesterday.)  Until employees have something to lose - they have no investment in the change.  It is sound psychology that people are more influenced by the potential loss of something than the potential gain of an equal amount.  In other words - increase their premium based on their lack of participation and you'll get more participation than if you give them a reward after the fact via incentives, rebates, merchandise, travel or good health.  It's just human nature.
    

What Would Incentive Intelligence Do?

Make sure that there is some compassion in the program.  If you're doing it purely for financial reasons there are other ways to cut costs - renegotiate the contract or get some other deal.  Increase co-pay, deductibles, whatever.  Spending money on a wellness program without caring is a waste of money.  If you don't care about your employees stop reading... the rest of the post won’t matter to you.

If you do care, start by honestly communicating the true costs of health insurance in your company.  People need to know the big picture and where they fit in that picture.  Your efforts with being transparent now will pay big dividends later - start the communication with honest, transparent discussions on what you're doing.  While costs aren’t the only thing you care about – employees need to know that their behaviors impact others and that their individual behavior important and will impact their co-workers.

Communicate that everyone starts at the same place and their future behavior dictates the outcomes.  The individual employee behavior will determine the individual’s premiums in the future.  And by extension, everyone’s behavior in total will influence the individual premiums as well.  I specifically mention behaviors - this isn't penalizing someone because of a fluke of DNA.  Diabetes can be a DNA issue or a value-meal issue - Doctors can separate the wheat from the chaff on that one.

Communicate that going forward you're changing the rules.  The employees need to know this won’t be a program of the month – this is a fundamental change in how the company will handle the health care issue.  Make sure the compassion is there - this isn't just a business decision alone - it is a human decision.  

Now, here’s where some of the psychology of loss aversion comes in...

Create a grace period before the real stuff starts where everyone’s premiums for the next six months will be at the lowest possible level for the plan in place.  This might mean the company takes a bit of a risk since you're only charging premiums as if everyone was perfectly healthy. But hey... you said this was a human decision not a bottom line one right?  You need to put your corporate money where your corporate mouth is too.  

After 6 months premiums will be adjusted and the company will adopt something like this:

Tiers of premium rates based on behaviors (example only):

• If don't or won't take a health risk assessment you pay the highest premium rate.
• If you take the assessment, regardless of the outcome, you get the second highest rate.
• If you get a bad assessment - you get the third highest rate.
• If your assessment is good - you get the fourth highest rate.
• If you participate in behavior modification efforts (diet, smoking cessation, etc.) You get your rate reduced.  Number and type of interventions would have more effect on how many tiers you move up/down.  This isn't about goals right now - just participation.  You need to break behavioral inertia.

Note On Strikethroughs:  See input in the comments section @akabruno caught some flaws in my logic. I was in a hurry and combined a couple of thoughts - the idea is that if you take the assessment you get a lower rate - the rate at this point isn't based on the outcome - just the fact you did it.  If you have a great assessment you won't have any issues later - if you have a bad one your level of participation will determine at what rate your premiums will be calculated.

This is only an example - the concept is to let the employees see the effect being healthy and doing healthy things has on their paycheck.  That’s the part where they get to see their skin in the game.  By reducing everyone to the lowest level – they now have something to lose - namely their own cash – if they don’t change behavior.  

Remember, you’re not really raising their rates – you’re lowering them for a period of time so they get accustomed to the extra money – then you’re taking it away based on their behavior.  

I know this is contrary to the normal program structure of giving awards for behavior but it should have a much greater long-term effect.  After all – how many pedometers can you really use?

And the big one…

Communicate, communicate, communicate the effect the program is having on people’s lives - not the cost savings, not the awards, not anything but the effect it is having on the well-being of your employees.  Remember, this is mostly about making your employees' lives better.  That is the thing you communicate.  

Leverage social proof - communicate the number of people playing the game to show how widely it has been adopted.  If you're getting low numbers then communicate the growth not the absolute numbers.  Whatever the situation, spin it so that the employee base sees this as part of your corporate identity.

That's it.  Simple and I believe, effective.  It addresses what I feel are the big stumbling blocks of wellness programs...

1. It’s based on things the employees can control
2. It comes from a compassionate and human place not just the CFOs office
3. It brings the impact and the motivation for being healthy from something in the future into the now - to things that influence me today - paying higher premiums next month if I don't do something (or lower if I do)
4. It applies the principle of social proof and consensus so I'm influenced to be part of the crowd.

What say you – is this structure better?  

Should we, as Nick Lowe said “be cruel to be kind” and focus on taking away money in the form of higher premiums for NOT doing something instead of giving out tchotchkes for losing a few pounds? (BTW – email subscribers may need to click through here to see video)

Interested to hear your thoughts.

Incentives and Vuvuzelas – Deafening and Irritating

I’ll admit – I’ve never watched a World Cup match until this year.  Credit HRevolution, Bill Boorman, Steve Boese and twitter.

I met Bill Boorman at HRevolution – Steve and I go “way back” in twitter/internet time and the World Cup was something they were tweeting back and forth about over the last few days.  So I jumped in.  

The US played England (not UK – get it right) on Saturday in the World Cup.  While I’m not a huge fan of soccer – football – or Futbol – depending on your point of view – it was an interesting match.  Due to a rather ugly goal on the part of the US the match ended in a tie 1-1.  We live to fight another day.

But the real take away from the match was the damn vuvuzelas.  

Vuvuzela Thy Name is Insanity

I know it sounds like a Dr. Seuss word but it’s a real thing – a one-note stadium horn blown at South African football matches.  The World Cup is being held in South Africa – hence the vuvuzela.  However, if the twitter stream is any indication of the love of the vuvuzela it ranks up there with Hitler and Jon Van Der Sloot.  Not a popular thing.  Not to mention discussions on hearing loss and interfering with play on the field.

As I started to watch the match – the incessant droning of the vevuzula was simply annoying.  Then it became irritating.  Then I started pulling out what remained of my hair and began writing the number 23 on all the walls of my house.  The noise, the noise.  There is nothing as madding as the single-note cacophony of the vuvuzela.  

But... miraculously, after about 45 minutes it faded into the background.  It became invisible (or silent since we’re talking auditory not visual?)

The Top Performer Program is the Vuvuzela of the Incentive World

Now, many companies run an annual top performer program whereby the top 10% or the top 20% or the top 11.67845% (depending on the stupidity of the program) earn an award – usually a grand travel award to…South Africa (note:  don’t use vuvuzelas as room gifts – you’ll thank me later.)

Initially, these programs get everyone going.  They’re excited. They can’t wait.  They work their butts off.  But a funny thing happens about 4 months into the program.  The percentage of folks below the cutoff start to realize – they ain’t gonna earn the award.  They can’t keep up with the top 10% or the top 11.67845%.  They know they are at 12% or 15% in the rankings.  They stop competing.

But the company still sends out the communications to everyone.  Mailers about South Africa and the vuvuzela horns.  Emails about working hard and earning the travel award.  Standings reports showing the individual just how far from earning the award they are (hey boss… thanks for the reminder.)  

News Flash:  The only ones who care about these communications are the folks ABOVE the cut off.

The program becomes the incentive vuvuzela – it starts out as a annoying, then irritating, then maddening – then… nothing.  

They stop paying attention.  And they stop performing.

The sad thing is the next time you run the same program these folks will go through those same steps – only faster.  They will start out trying, and then they will see the first round of results and remember back to last year when they hear the siren call of the vuvuzela and remember the pain.  They will then go through the steps in the fastest way possible to get the point they are oblivious to the sound of the incentive vuvuzela.

Don’t do this to your folks.  

Target Not Blanket

Sure recognize your top performers – but don’t make it be the only thing you communicate to the entire audience.  Target your communications so that those that may actually have a chance of earning the trip get the big trip communications.  Structure something in the program for the other 88.32155% who won’t get the opportunity to go to South Africa (maybe ear plugs?)

Want to hear the vuvuzela?  Check out this video and be prepared to go mad!

Email readers may need to click through to the site to get the video feed…

  

Don't Set Sales Goals in Your 2010 Sales Incentive

I don’t know if the economy is recovering or not.  Based on yesterday’s market performance (or the day before that – or the day before that – or the day … oh, you get the point) my guess is that we’re a bit further away from any big rebound than we thought a few weeks ago.  However, I have heard sales and marketing folks saying things are better in 2010 than they have been.  You’ll hear someone say things are good “compared to last year” or “compared to 2008.”

In other words compared to a two-year drop that was arguably the worst since the 1990’s or even 1930’s things are okay.  

So I ask this question…

"If you have sales people on bonus, commission or reward plans how are you setting their goals? " 

Goal Setting Ala Blake*

Most companies look to last year and put a “stretch” factor on top of those numbers.  If you sold 100 units last year – this year it’s 115.  200 units – target set for 230 – or some such process.

Some really, really hardnosed companies like Premier Properties* may even use the highs of 2008 as their starting point and basically say – “hey – your job is to sell – not my problem the economy tanked – you find the customers.  Someone is buying.”

So you have a choice, lower the sales base for setting goals or keep the goals the same as if the economy never moved an inch.  

During a downturn in an economy such as the one we’re in, selling is a tough, tough business.  Buyers are extremely risk averse.  Buyers are closing the windows, the doors, the doggie doors and the air vents to keep sales people at bay.  The sales people are desperate.  The buyers are scared and in many cased broke.  So why put ANY incentive in place for sales?  It’s a Sisyphean task to even attempt to hit goals in excess of last year or even the year before.

Another Approach

Here’s a thought to consider.  Use the down turn for upgrading the sales staff instead of berating them.

Don’t run a sales incentive at all.  

Run incentives geared to relationship building and skill development. There won’t be a better time to up your sales people’s skill levels and improve connections to their clients.

If I ran a sales organization of any size during this economy I’d…

• Train them on the new media options available for connecting to customers (twitter, linkedin, facebook, etc.) and reward them for using them.  Nothing too heavy – just enough to break their luddite inertia.
   
• Reward sales people for developing sales plans for the future – ask them – “What will you do when the economy starts to rebound for real?  What is your plan?”  Reward them for research and planning now.  Nothing beats a prepared mind.
   
• Get sales people to spend time with old customers and new markets without a requirement for a sale.  Convey that thought to the customers.  Tell them – “we WON’T sell you.”  Get your sales people to learn their customer’s business.
   
• Let sales people take on roles internally while the market is slow.  Let them work in customer service.  Let them work in the marketing department.
   

In other words… use this opportunity to reduce the stress on your sales people and at the same time get them more prepared for the uptick in the market when it occurs.

Who will win when the economy rebounds?  Those that kept banging on doors hoping to make a sale but simply made a pest of themselves or those that took the time to update their skills, update their understanding of their customers, update their understanding of their own company and research and develop a plan?

Who will stay with their company longer - Those that kept feeling the lash or those who were able to grow in a caring and understanding environment?

Don’t assume more pressure is the solution.  Less pressure may be what is needed right now.

Thoughts?

 

*if you know these references pop into the comments and let me know.

 

Connecting the BP Oil Spill to Your Award Programs

There is no point to this post other than to start you thinking on a Friday morning.  It's just something that has been in my mind for a few days and I thought I'd throw it out to the crowd for some discussion.

The Set Up…

We all know there is this little problem in the Gulf of Mexico – some oil is leaking out of a pipe a mile under the surface of the ocean.  It’s going to cause some problems – and going to cost a ton of money to fix.  

Now, we all know that something like offshore drilling has risks and therefore, to help cover the costs associated with “errors”, and because of a little thing called Exxon Valdez -  we (the US) put in place an “insurance” plan of sorts requiring all oil companies, domestic and foreign who drill in U.S. waters, to pay into a federal bank called the Oil Spill Liability Trust Fund.  Under the current law the maximum an oil company has to pay into that fund is $75 million.  That fund is designed to pay for costs over and above the clean up (ie: economic and ecological impact of the spill.)

Now, the estimates for cleaning up the BP “problem” are going to be waaaaaaay more than a mere $75 million.  The difference between the $75 million and the total cost is going to come from the US taxpayer.

There is an effort in Washington DC to create a bill that would raise the liability cap that oil companies have to pay for non-cleanup costs from the current $75 million to over $10 billion. 

And, oh yeah… they want to make it retroactive so that the “new” law applies to the current BP problem.

While there is some discussion on the whether a bill such as this is constitutional – there is some support for it.  In other words, some people think it is okay to hold someone (some company) liable for something that occurred in the past under a specific set of rules by applying a new set of more serious penalties established today.

The Question…

If I flip this discussion and say – we will pass a new rule that allows people to get a much larger reward than would have been earned under the old rule and make the award retroactive.  Is this right?

An example might be that a Sales Person receives 1% of gross profit for all sales in 2009.  

Now say sales went through the roof because of some change in the market and now we decide they should get 20% of gross profit.  We change the rules, and reward them retroactively to the beginning of 2009 – increasing their award by a factor of 20.

Would you allow that?  

What if the person was a CEO or some other senior executive?

Probably not.  You’d say – 

“Hey… you can’t change the rules to make it retroactive after you see what the results are.  Stick with the plan.  Change how we reward in the future but the past is the past.”

Now ask yourself – should the same thinking apply to penalties – say for an oil spill?

I know where I stand on retroactive awards and penalties but I’m more interested in your opinion.

Is it okay to retroactively punish someone?  Is it okay to retroactively reward someone?