Many people have clicked on a previous version of this blog post wanting to learn how they should set up a point-based reward program.
Unfortunately, some individuals and recognition and reward providers suggest certain ideas as being best practices so the client’s employees will consume more points. So, buyer beware and let’s learn some principles versus supposed best practices to guide you.
My goal is to provide you with objective information along with solid principles for you to make wise decisions by. I will also give you some pros and cons for some options.
The question of when to recognize a
person, or whether what they have done merits being rewarded, is a
common issue especially for managers.
I believe you must start with
defining what you mean by recognition and what rewards are first. Once there is
agreement throughout the organization on these two definitions, you will be in
much better shape to guide and prescribe when to use each of them
One of the
questions I am often asked when it comes to rewards is what to reward people
with as well as when are you supposed to give those rewards.
to remember that rewards can be tangible, monetary, or experiential in nature.
This opens the door to all kinds of creative options and ideas for what to give
to people or give them access to choose.
And broadly you
give rewards to individuals or teams whenever they reach pre-set goals, a
significant achievement, or a special service was performed.
Now let’s dig a
little deeper so you can better understand these elements.
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. So here are the Top 10
Ways to Select the Right Incentive or Recognition Award to help you.
1. Clearly spell out your program 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 performance level.
2. Have employees involved and ask them. Use an employee survey to get the big picture view
of 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 onto the
award presentation. For example, who’s presenting the award? How have you
orchestrated the total award celebration experience? What elements can you make
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 lifestyle, 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 awards you 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.
As previously published by the author in Incentive Magazine.
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
Have you tried to train your people on how to give better recognition and it didn’t work? Were you able to measure the transfer of learning back to the job? What was the business impact of the recognition education delivered? Have employees reported improved recognition?
There are many reasons why educating and training managers and employees on recognition giving can fail. Authors and education experts, Tim Mooney and Robert O. Brinkerhoff, suggest bold actions for achieving business results in their book, Courageous Training. They provide a useful list of eleven possible causes for training failure.
I will unpack each one of these causes and then discuss how it relates specifically to employee recognition training. I want you to overcome the typical problems associated with training people effective recognition skills. (more…)
One of my Rideau colleagues recently shared with me their observations of how many mid- to large-sized businesses are challenged with how to transition more away from rewards towards recognition.
Then within a week of this conversation one of our blog subscribers at a financial services company wanted to know how to reduce their budget costs and lessen the amount of gross up tax spend on their gift card rewards program.
So, it seems the topic of rewards is in the air again!
Since many companies are using rewards it only makes sense I should share with you how best to transition from, or lessen, your use of rewards and move towards more recognition, or at least a happy medium between the two. (more…)