Top 10 Ways to Measure the ROI of Incentive Programs

We need greater accountability for the success of our incentive programs. Planning to calculate the ROI of incentive programs from the start will help us focus on results. Following the Top 10 Ways to Measure the ROI of Incentive Programs will be a handy checklist to ensure the success and ROI of your incentive programs.

1. Identify the problem you want incentivized.Assess the current performance problem to determine the needs, conduct a gap analysis, and look for potential improvements you think could be incentivized. Too many accidents, not enough sales, losing too many people, or not reaching performance targets.

2. What are the costs of the problem?Analyze the direct and indirect costs currently associated with the identified performance problem or need. Like: What are salary and operational costs for a retail store? What are turnover costs? What is the number of lost-time days due to accidents? 

3. Determine the achievable objectives.Propose one or two key measurable objectives to be targeted by incentives. Example: percentage of reduced voluntary turnover; increased quarterly productivity indicators at retail stores; percentage of sales performance numbers; or, reduced number of annual accidents per year.

4. Figure out the best measures to use.Identify the specific behavioral measures you will use to determine the right program success measures. When you define the performance well enough you will know the behaviors you want more or less of. You’ll then know if the behaviors occur or not and how to measure them.

5. Calculate the costs of incentives.Project the overall costs associated with conducting an incentive plan to improve the performance problem. Determine the value of incentives, the frequency or number of behaviors required for an incentive, the time period of the incentive plan, and multiply to determine total costs.

6. Keep tabs on budget spend.Monitor the costs associated with producing the improved performance results along with implementing the incentive plan. ROI is about return on investment of monies spent, which includes administration costs, monitoring, data collecting, and analysis.

7. Gather the data you need.Collect baseline data of target performance results from the period before the incentive plan began as well as during the implementation period (e.g. year before versus current year). Do as much as you can before the incentive plan so you can deal more with data following implementation.

8. Create a before and after analysis.Analyze and calculate the costs of the targeted performance problem before and after the incentive plan. Here you monetizing as much of the data as you can. Make friends with the folks in finance to help you put a dollar figure on as many data points as is possible.

9. Consider reasons for the success, or not.Give a general interpretation of the results observed of performance outcomes achieved while using incentives. This is putting the human observation and deductive reasoning as to whether things worked or not. Your hypothesis can then be validated by the data collected.

10. Work out the ROI.Calculate the actual return on investment. The math is easy: It’s the estimated dollar amount of the impact made by the incentive plan minus the combination of the annual incentive payout costs plus administration costs, then divide the previous total by the impact dollar amount, and finally multiplied by 100. Previously published in Incentive Magazine

Previously published in Incentive Magazine

Taking a Quick Look at Career Milestone Awards

How are your career milestone or service award programs doing these days?

It seems the majority of organizations have tenure or long service award programs. According to WorldatWork’s 2017 Trends in Employee Recognition, length of service recognition remains the top ranked recognition program with 85 percent of organizations. 

Historically, and especially within the public sector, career milestone years were only acknowledged when an employee reached 25 years or longer. Today, most progressive organizations commence with at least 5 years and then celebrate every 5-year increment thereafter.

But when you look at the US Bureau of Labor Statistics the average tenure for salaried employees is 4.2 years. That average drops to 2.8 years for the mobile 25 to 34 year old employees.

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How to Increase the Impact of Your Formal Award Programs

What impact are your formal recognition programs having on your people and their performance? Are you designing your best-of-the-best and above-and-beyond award programs to make a difference?

According to the World at Work 2017 Trends in Employee Recognition Survey, 77% of organizations have above-and-beyond performance programs, and only 17% of them have what they termed as formal programs. They did not delineate or define well what they meant by formal recognition.

The Conference Board of Canada in their 2017 report on recognition found that 50% of corporations have formal company-wide recognition programs in place. Organizations that have these programs recognize outstanding individual achievement as their main purpose and organize large-scale celebration events to accompany these awards.

But neither study pursued whether these formal award programs had achieved their objectives or if they considered the award programs effective or not.

Look at the following seven ideas for building greater impact into your existing formal award programs.

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Disruption of Recognition Programs by Your Leaders

Allen Saunders, an American writer and journalist first coined the line “Life is what happens to you while you’re busy making other plans,” back in a 1957 Reader’s Digest article.

Sometimes this happens to you and I who work in the recognition space. Things will happen at work by people that negatively disrupts the good you are busy planning with your recognition programs and initiatives.

And nothing is worse than when it is a leader who is the disruptor of your recognition programs and plans.

Consider these tactics for handling the inevitable negative, disruptive leader.

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How Oscar Awards Nominations Are Selected

It’s Oscar Awards season.

They have submitted a full list of nominees, along with best picture nominees by over 6,000 voting members of the Academy of Motion Picture Arts and Sciences.

They sent in those nominations during the month of December. Members made their selection for which movie and which artists they felt merit being this year’s Oscar winners.

Each voting member belongs to just one of the seventeen branches of the Academy such as actors, casting directors, costumer designers, producers, and many others involved in the magic of the movies.

But who judges the nominations? How are Oscar Awards nominations evaluated?

I will open the curtain on the process for you right now so you’ll be ready for the Academy Awards night. You’ll know when the presenter reads the envelope, announcing, “And the winner is…” exactly what it took to get to that special moment. (more…)

How To Increase Meaningfulness Through Your Recognition Programs

Academic research has shown that managers are a contributing a factor to your employee’s perception of experiencing meaningfulness at work.

Researchers Francesco Montani and Jean-SébastienBoudrias reported that when managers take their role seriously, and serve and act as representatives of the organizations they work for, they provide them with salient social cues to their employees. These cues give employees a sense of meaningfulness in their own job. A manager’s act of genuinely recognizing their employees contributes to employee meaningfulness with their work.

So how can you use your recognition programs to create this greater job meaningfulness for employees? (more…)

How To Get Employees to Use Your Recognition Programs

You have a great recognition platform set up with various peer-to-peer and manager driven recognition programs. The launch and kick-off you designed and started was perfect. What happened next? Crickets.

Hardly anyone was using your recognition programs.

What can you do, or what should you have done to begin with, to ensure greater participation by employees in using your recognition programs? (more…)

Top 10 Solutions to Typical Recognition Program Problems

Whenever technology is involved there will always be bugs and glitches that get in the way. Likewise with recognition and reward programs. However, for the most part, the biggest problem with recognition programs is not technology. It is the people factor and how recognition programs are used. Consider these Top 10 Solutions to Typical Recognition Program Problems to help you out. (more…)

How to Recognize Offline Employees When You Have Recognition Programs

You are grateful that your company has these great, online recognition programs, to send important and worthy messages of recognition to people.

Now you can send branded eCards to one another when someone is seen living your corporate values or achieving a strategic priority. You can even send messages of appreciation and recognition via a social newsfeed on your social recognition program. Peers can like these comments about their colleagues and add their own words of commendation and praise. And, your managers, can nominate employees for an award or actually reward them with points for going above and beyond.

That is, as long as employees have an email address, a computer or an electronic device, and can receive notifications from any of the above vehicles of recognition.

But, if many of your employees are offline and have no company email address, and also no electronic device on the job, how do you get frontline supervisors and managers to embrace online recognition programs? (more…)

Top 10 Ways to Select the Right Incentive or Recognition Award

Make sure the awards you give excite recipients and represent your company well.

Choosing the right awards for your various incentive and recognition programs is never an easy task. You want to show employees that their contributions are valued and appreciated. Awards should match your program’s goals and celebrate employee achievements. Today’s employees want more than the traditional award items. Check out the Top 10 Ways to Select the Right Incentive or Recognition Award to help you decide.

1. Clearly spell out your program’s purpose. Is this award for a sales campaign? Are you wanting to get people enlisted in your health and wellness platform? Or is this a prestigious award for the president’s excellence program? Awards must always fit the program purpose and desired performance level.

2. Have employees involved and ask them. Use an employee survey to get the big picture view and employee input. Ask them to prioritize on criteria such as the meaningfulness and perception of various award options. Draw upon focus groups, too, so you can dig deeper. Solicit the why behind each employee idea.

3. Focus on the meaningfulness factor. Employees are very clear on whether an award item is meaningful or not. Always add on to the award presentation. For example, who’s presenting the award? How have you orchestrated the total award celebration experience? What elements can you make even better?

4. Inspire and excite award recipients. Does the incentive or recognition award inspire the recipient to do, and be, better? As you explore award items – whether tangible gifts or symbolic awards – find out how excited employees are to receive them. Evaluate the emotional appeal of the awards you’re thinking about.

5. Provide choice wherever you can. Giving people exciting options to decide from is a great way to create motivation. Whether the awards are a lifestyle item, health and fitness, electronics, outdoor, or experiential items, charitable donations, or gift cards. Think choice! This factor can be especially critical with incentives.

6. Always use quality, name brand products. It can be a real let down when an award gift breaks or stops functioning shortly after receiving it. Stick with brand name items that are top quality. Ensure your award vendor is reputable and has a great exchange and replacement policy. Your award speaks for you.

7. Put symbolic awards on a pedestal. Trophies and medals must be totally representative of your organization. Look at Olympic medals and the Oscars® for what they mean to recipients. Whatever symbolic award the design must be an extension of the company and your brand. They will become a treasured prize.

8. Think outside of the box for novel ideas. No need to stay with the tried and true award selections. Dabble in creativity such as a customized portrait painting from a family photo of a recipient. Provide an opportunity to learn something new from an expert that the employee has mentioned such as painting or in music.

9. Move from tangible to experiential. Corporate volunteer trips to destinations around the world appeal to younger generation employees. They can build schools or set up wells with water access. This is a fully immersive cultural and teambuilding experience that leaves a legacy associated with your company.

10. Choose your own adventure. Jack Nicholson and Morgan Freeman made famous the idea of doing things before you “kick the bucket”. Have employees choose experiences that bring joy. It could be skydiving, an amazing destination experience like whale watching in Patagonia, or cooking with a chef in Paris.

 

A version of this post first appeared in Incentive Magazine.