Earlier this year we were asked to devised a sales incentive program for a major electronic retailer. Previous incentive programs were run inhouse, the reward was always cash and the results had gradually been declining.

We ran a market research session with the sales team for feedback on different reward options. They were very up front and didn’t want to receive cash anymore because such a large slice was taken in tax and therefore they thought they weren’t getting the full benefit of the reward and the effort required to attain it.

When employees are deciding to actively participate in an incentive program, they will judge the program by asking “what’s in it for me?” and “what is required of me”.

In the “what’s in it for me?” they will consider the type of reward they are able to achieve and the rewards perceived value whilst “what’s in it for me” will be the effort required to earn the reward.

A cash reward has a face value which cannot be hidden. The recipient knows exactly in dollars and cents what value you place on their effort and achievement. This was why the electronic retailer’s incentive programs were gradually declining.

A competitive salary, commission and bonuses will help your recruitment process and reward employees for a job well done but if you’re are looking for improved or incremental performance cash rarely proves to be a motivator.

I was not surprised to find the electronic retailer sales teams were not motivated by the cash as during my 11 years experience in running incentives I had found similar findings that cash is not a motivator.

While most people will state a strong preference for cash, what they say and what they actually work hardest to receive does not always match up. Research has repeatedly demonstrated they will be more motivated to perform better if they are working towards a non cash reward they would normally not purchase for themselves.

Salaries and extra cash income are view as part of salary and generally spent on necessities and rarely people will remember how they spent it.
The results of a survey conducted by Wirthlin Worldwide (March 1999) of over 1,000 people who were asked how they spent their last cash reward, cash incentive or cash bonus highlighted the limited impact of cash incentives.

29% -     Bills
18% -     Do not remember
15 % -    Never received cash reward/bonus
11% -     Gifts for family
11% -     Household items 11 %
11 % -    Savings
9 % -      Special personal treat
5 % -      Vacation
2 % -      Something else

Goodyear Tyre & Rubber Company ran a sales incentive campaign to improve sales of tyres. Two groups were formed; one was offered cash, and the other an equivalently priced selection of merchandise and travel-related rewards. The group receiving lifestyle and travel rewards outperformed the cash group by nearly 50%.

Mazda Motors ran a similar program and created two incentive programs where one group was rewarded with cash and the other was given points to spend on merchandise and travel. In the end, the cash group recorded a 2% increase over target while the merchandise group came in at 15% over target.

In 2000 a survey conducted by American Express Incentive Services, 17% of employees polled said they had received a year-end cash bonus. A full 32% of these respondents admitted that the cash bonus did not improve their work performance.

According to a study of 235 managers by The Forum of People Performance Management and Measurement in December 2005 non-cash rewards are viewed as more effective at achieving 8 of 10 of the most common corporate goals.

Since the incentive expo at Darling Harbour we have received a lot of comments asking why we were giving out juggling balls.

Learning to juggle is all about changing behaviours. Juggling helps people gain insight into how they approach change and how willing they are to learn new skills. Juggling can also help to achieve a shift in beliefs and the creation of small steps towards working and thinking differently.

Here are some great reasons to teach your employees to juggle.

Confidence
Juggling improves confidence, because most people will find that they can do something that they previously thought was ‘impossible’. Once the impossible for them has been achieved, they can then have a different outlook on life where suddenly things are much more achievable!

Persistence + Perseverance
When you juggle, you inevitably drop. The employee will move past these drops by persevering with the tricks they are working on until they conquer it. All of a sudden, drops/mistakes don’t matter. They are just a stepping stone to success!

Problem Solving
Juggling is about learning how to break each juggling trick down into its small component parts, learn each of the parts, then learn how to combine each part to form the trick. If they get stuck at any particular point in juggling, they can guarantee that someone more experienced will be able to offer advice to help further.

Balance
Balance is important in many areas of life, whether you are balancing priorities or trying to find a balance between extremes. You can balance both sides of your brain because you tend to learn how to juggle using one side of the brain, and when you get used to the pattern it switches to the other side of the brain. Your body and mind have to work in balance with each other to make the moves possible.

Stress Reliever
You reduce stress because in order to give your attention to juggling and learning, you need to put your concerns to one side and focus fully! Juggling encourages a mental and physical state known as ‘relaxed concentration’ in which the mind and body are able to be focused and alert while remaining calm and relaxed. You can sometimes find that the answer to your problems is much easier to find once you have finished the juggling and your mind is feeling refreshed!

“Anyone can juggle, not everyone believes they can.”

The importance of making an incentive program personal for each and every participant is now being recognised by employers. The blanket giving of the same gift vouchers to everyone and thinking it will be the ultimate motivator has thankfully moved on.

There is more focus on knowing what the drivers are that motivate participants. Understanding the demographic of the participants and researching what is relevant to them is becoming the norm.

For example a call centre had a large demographic of part time working mothers with school aged children. By customising the incentive program to their demographic, working hours become more flexible to allow time needed for school activities. A major electronic retailer found out their sales staff had a passion for technology which is why they chose to work for the retailer and preferred store gift vouchers for incentive programs. An automotive company with a male dominated sales team used to organise ‘boys weekends away’. However these weekends and working 6 days a week put pressure on their relationships and the weekends away have changed to include their partner with the focus on style and indulgence.

Time needs to be spent researching the participant’s drivers. When you undertake this research include their direct manager as he/she works with the group on a face to face basis and will be a good reference point.

Sending out a survey is not enough - as what people will respond to in a survey is not always what they really want. A group session with a couple of drinks may break the ice as employees will feel braver with a group of their colleagues to say what they think. You will need to work out what situation is most comfortable for your workforce to express their views.

Take the time to break down your participants demographics. Your employees may all be married with kids and they expressed a weekend away. You think a great reward would be a weekend at Surfers Paradise visiting the theme parks. However boomers tended to have children early in their 20’s whilst Gen X delayed having children until their mid 30’s and thus the boomers children may be young adults and mum and dad are not interested in taking them on a weekend away or the Gen X kids are still in nappies and riding the Cyclone rollercoaster is not appropriate.

Motive8 commissioned an independent survey of 500 SME’s on incentive marketing to further understand the Australian market.

An overwhelming majority of Australian SME’s believe employee rewards increase loyalty and performance but only half actually implement rewards for staff, the survey found.

88% of SME’s see the business benefit of rewarding employees and a further 85% agreed that incentives and rewards could improve their bottom line. Yet only 52% actually provided employees with rewards in recognition of their performance and only 52% are likely to implement an ongoing employee motivation program.

While it seems while SME’s understood the power of incentives there seems to be a disconnect between knowledge and action.

This is a real wake-up call for SME’s in a tight Australian job market. With employers facing tough competition for skilled workers, business needs to be covering all the bases in attracting and retaining staff.

There’s no doubt that losing staff is a blow for any business. We asked respondents how long they thought it would take to get a replacement for a key staff member up to speed, and 65% said 3-6 months, 24% said 6-9 months, and 7% said 9-12 months.

While these figures represent a significant impact on business, respondents may be underestimating the cost of replacing a key employee. Only 7% understood the real picture of 9-12 months. No matter what the position the employee held it, the time it takes a new employee to get up speed ultimately comes off the SME’s bottom line.

We also asked the SME’s about their communication with employees and they rated themselves pretty highly – 73% said their communication with staff was excellent or good and a further 25% said it was satisfactory.

With only 12% marked themselves below average or poor for communication and 74% believe their employees are happy enough without needing to implement an employee motivation program we can only assume that either there’s a lot of very satisfied workplaces or that some businesses may need to re-examine their relationships with employees.

58% of survey respondents agreeing that setting targets for non-sales roles is difficult. This confirmed Motive8’s beliefs that this was an issue for many businesses and online incentive programs need to be built with maximum flexibility to tailor its programs so that they can be used for both sales and non-sales staff.