We run a number of incentive programs for a client who has branches Australia wide. Standard terms and conditions for each program state that a branch may opt out of any incentive program. For the current program they decided to change this procedure and sent out a form to be returned only if they wish to opt out.

We were startled when lots of forms started coming in and thought the incentive was not appealing. On our investigation we discovered that the Branch Manager had assumed it was to opt in as they had never had a form to opt out before or for that matter to opt in.

If you are going to change procedures, be clear on what you are asking them to do and don’t hide it in the fine print.

Often when we are dealing with new clients they are keen to know ratio of their budget should be spent on rewards, administration and communication.  They have some idea that it is a formula and if they get the ratio right they will have a successful program.  This assumption is based on their research about incentives programs ‘dos’ and ‘don’ts’.

We try to get customers to focus on their objectives rather than following the formula. Incentive Intelligence has a great post “Old Saws Are Usually Dull” that covers this perfectly.

This is another article I found on CEO Online that provides a great case study on how the investment in an incentive strategy is increasing business performance.

CityWide is a provider of physical services and over the past six years has more than tripled, growing from $38 million to $148 million. Clients now include high-profile, blue-chip and prestigious companies.

The CEO believes his investment in motivational programs is paying off. “I may spend 3–4% of profit on incentive schemes, but I get that back many times over in performance” he said.

He also acknowledges that the best incentive is being smart about setting pathways to achievement at an individual level and then celebrating that achievement with people when they get there. “Clearly our aim is to achieve maximum productivity from all our people but that doesn’t mean working them into the ground. On the contrary, we know that if our guys enjoy their workplace and their roles and understand our incentives schemes, they’ll give 100%.”

Celebrating success is a feature of CityWide’s culture. Senior management regularly visit company depots to celebrate achievements. The Christmas party is a renowned event, with generous lucky dip giveaways including iPods, concert and movie tickets.

The company runs footy tipping competitions to help build camaraderie. Birthdays, service records, safety awards and other significant milestones are recognised with BBQs and by spreading the news in the company’s two newsletters. It has 20 seats permanently booked at Telstra Dome and the MCG in Melbourne to reward outstanding achievements. Watches are given for long service at 10, 15, 25-plus years service.

Their work environment is considered to be among the best in the industry, with a low incidence of safety breaches, a strong commitment to the environment and plenty of opportunities to achieve performance bonuses.

In the last two weeks I have spoken to friends who have been demotivated by the incentive programs running in their workplace. Both friends work for major corporations and I think we all have an expectation that these companies incentives programs are well organised with good structure – not so!

The first example is a long service incentive program for a major player in the Australian banking sector.  The company’s policy is a $1000 gift voucher for 20 years long service.   Using cash for long service reward means the recipient knows exactly in dollars and cents what value you place on their contribution to the company. A cash reward has a face value which cannot be hidden and it doesn’t take long to work out $50 a year is all the company values their employees.

There is no formal recognition policy from management level.  My friend celebrated his milestone with a self funded lunch with team members.

About a week prior to the anniversary he was asked would he like a gift voucher from X or Y store. X or Y store was not relevant to his demographics and needs at the time and he requested a gift voucher from another store. The request was granted however the person responsible placed no urgency on fulfilling his request and approx 6 weeks later a gift voucher was given with the touching words “you’re lucky you got this” and a tale of how hard it was to find a park at the store.

The other example is a sales incentive program for a multinational consumer electronic company. At the end of each week or so a gift voucher for varying amounts is handed to one person in the sales team. The program is run on an ad hoc basis, there is no program criteria and the manager chooses and controls who receives the gift voucher. My friend is new to the company and was the top salesperson for three weeks running and is yet to receive a gift voucher. I wonder what his sales were for the following week?

When you run an incentive or employee recognition program proper care needs to be given to all details to ensure the individual and company gains maximum benefit and the participant is inspired by his reward to continue performing.

In part 1 of this series we looked at what the business wants to achieve. The first question that a business should ask – what is the behaviour change that needs to be effected to achieve the business objective?

In part 2, we looked at implementing a program to a measured process – bearing in mind that what gets measured can be improved.

Part 3 reviewed the 3 main types (of many styles) of programs that we work from when designing an incentive program – Win, Place, Show; Hit the Target; Redeem at any Time.

Today we will touch lightly on measurement/result conversion. This is a confusing/road block issue to many of the people I speak to regarding incentive programs. At design phase of an incentive program we address this once the objective has been decided and what process is being measured – and the appropriate type of program is applied to suit.

Conversion of measurement/results is handled by spreadsheets, logarithms or programs but the basis/formula needs to be established. Simple examples may be:

What is an X% increase in the production of widgets worth to the company?
What percentage of that worth is to be apportioned to the widget maker/s? (there are common benchmarks for this)
Will this apportion motivate the widget maker/s to change behaviour and increase performance? (You can see how crucial this point is)
Will this basis/formula achieve the objective?
What is the ROI? (Return on Investment)

As I mentioned earlier in this series, Motive8 sits down with clients at design phase and examines such issues to ensure that a workable program is designed so that objectives can be achieved.

There are some excellent articles by Paul Hebert of Incentive Intelligence blog that will also help readers with this subject. In particular, “Determining How to Spend your Budget” and “Program Budgets”.

In Part 2, we looked at different points a business should look at, or questions the business should ask, before the search for an incentive program begins. Today here are examples of what different programs are available.

Different Types of programs
There are 3 main types of incentive programs that are used to change the behaviour of participants. They are:

Win, Place or Show

• Singles out top performers
  (The top 10 sales performers or the 10 people that improved the most)
• Client chooses the number of positions to be claimed and the reward for each position
• Redeem rewards at program end

Hit the Target

• Rewards participants that achieve a predetermined level of performance
• Plateau variation with different reward levels changing at each increment
  (Plateau variation motivates participants to push a little harder as they close in on the next level)
• Redeem rewards at program end

Redeem at Any Time

• Rewards participants for tasks completed
  (Points are rewarded as each task is completed and participants can redeem at any time during the program)
• Minimum redemption levels can be designed into the program
• Redeem at Any Time

When we design a program at Motive8 it will be based on one of these main types – but can also be customised to the client’s requirements and/or objectives. (There are as many variations on these 3, as there are as many programs designed for different objectives.)

As mentioned in part 2 of this series, Motive8 sits down with the client at design phase to ensure that the required workable program is implemented.

Last week we looked at the first consideration of a business in implementing an incentive program – what objective does the business want to achieve?

This week (and referring in part to this post on 10 August 2007) we will drill down a little further.

What gets measured can be improved, or, an incentive program can improve any measurable process.

These adages apply to incentive programs. The performance of what is currently being measured in a business – Sales, Customer Visits or Business Reports, for example, can all be improved with the implementation of an incentive program. There is a myriad of different processes/functions/systems in any business that need to be measured for the business to function. If there is a process that is not being measured and the business wants to implement an incentive program to improve it – start measuring now.

Measurement example:

Sales staff currently making 15 Customer calls per week – implement a program that motivates the staff to increase the number of calls to 20, a 33pct increase which is rewarded with an incentive. (Either measured or rewarded in increments or when the goal of 20 is reached. This type of program can be magnified further – rewarding staff for taking the planned cognitive steps through the sales process, but more of that on another day.)

When sitting down with clients at design phase we examine measurement thoroughly:

• To ensure that the client achieves the results
• To ensure that the program is workable and offers ROI
• To ensure that the program will engage the participants

There are some important points that need to be considered when a business is contemplating an incentive program. Over the coming weeks I will publish some ideas and thoughts that should be noted when looking at incentive programs and a little education that may help in the decision making process.

What does the business want to achieve?

Overall, incentive programs motivate participants to change behaviour. An incentive program that is implemented is designed to change the behaviour, for example, of:

• Sales staff – motivating salespeople with incentives to drive their sales performance
• Customers – using an incentive to motivate your Customers to return to your business
• Employees – motivate the employees to change their behaviour/attitude/process within the business, using an incentive as a reward for their change.

There are many different behaviours/processes/systems that an incentive program can be applied to. Think about these: call centre performance, shop floor safety, efficiency in non-billed hours, product awareness by distributors, customer service processes, managing change in Company policy/direction, production line output, quality control…the list can go on.

There is a lot of detail and ideas on Motive8 or you can call any of the team here on 1300 559 904

One of our key catch cries that you will hear on this blog is that incentive programs are about changing behaviours.

We have just launched a Motive8 program specifically designed to change a behaviour. The program is small for just 13 participants however their role is critical to the long term viability of the company.

The 13 participants are employed in the company’s call centre and responsible for handling for enquiries for an Australian wide operation. The company has just merged separate databases into one and the call centre employees are required to cleanse their data and complete a customer contact form after each contact.

The incentive has been designed to promote repetition in completing the entire form, not just some of it and to make completing the form a key focus of their role with the new database requirements. The incentive focus is to change behaviour so every time they touch a customer a form is fully completed.

We know the key to making the incentive meaningful to the call centre employees, and thus successful is communicating how important their role is to the company, the value of the data they are collecting and how the data is used to support the marketing activity both short and long term. This has been reflected in the incentive communications.

The rewards are based on an individual and team based. Rewards are structured at different tiers for individuals based on the number of customer contact forms completed. The main reward is team based and they all must achieve the target to be rewarded. This will encourage team members to support each other and influence each others’ behaviour to receive the reward.

The program will trial for two months so we can measure a shift in behaviour and make program adjustments if necessary.

An article titled ‘Life time value, now there’s a number I love’, by John Jantsch on the Duct Tape Marketing Blog makes an important point about measuring ‘the numbers’ as he calls it in business.

What gets measured gets improved.

In incentive marketing, and here at Motive8, we say that you can apply an incentive program and improve the performance of any process that gets measured. If you want to improve the process by implementing an incentive program – but the business is not measuring the process – let’s start measuring AND implement an incentive program.

An example I use. How to lessen the amount of sick leave being taken (I am talking about sick leave being used to play golf, not when they’re in bed with the ‘flu.) is such:

“To change the behaviour (what an incentive program does) of your staff, implement an incentive program that includes a reward for your people who reduce the number of days they claim as sick leave”.

Easily measured, if not already done so, and an appropriate incentive reward can be easily applied to a situation that may be costing a business many lost hours, production and revenue.