No. 3003
What's New in Incentives and Performance Improvement
November 2008
Creating a ‘Culture of Appreciation’
‘This is the season when companies typically start to plan for those end-of-year employee gifts, which often come in the form of a bonus check, says Derek Irvine, Vice President of Global Strategy for Globoforce. However, in today’s increasingly challenging and highly volatile economic climate, many companies are being forced to cut back on such expenditures – or cut them out altogether.
But companies cutting back do so at their own peril, as this could cost them their very best talent. In difficult economic times like these, competitors often take advantage of uncertainty, poaching talent and wooing people away with signing bonuses and raises. These tactics are particularly commonplace in down economies when employees may be suffering from a “psychological recession” and need something like a new job or an influx of cash to boost their spirits and morale.
So how do today’s organizations take the focus off of these diminishing once-a-year bonus checks and find new, cost-effective ways to motivate, reward and retain employees? The answer is creating a “total rewards” package that includes a year-round employee recognition program. These programs enable organizations to get out of that “annual payment plan” rut and spread the rewards/bonuses out over the entire year in different ways and amounts.
These total rewards packages may still include bonuses, but must go far beyond them to also incorporate frequent, ongoing rewards given throughout the year -- including peer-to-peer -- for a job well done. These rewards can come in the form of inexpensive gift cards, which employees can redeem for rewards of their choice like a trip to the spa, camping gear or even a night out on the town. Many packages also include the option of charitable donations. Another key element is public recognition for the award recipient, which creates invaluable “psychic income” that goes beyond dollars and cents. It’s a form of appreciation that has lasting impact.
Saying “thank you” to employees with these smaller, more frequent awards has the power to create a more satisfied and energized workforce. When done properly, these programs can boost employee engagement and create a “culture of appreciation” within global organizations. In fact, this positive culture can impact company performance – by as much as 27 percent, according to a 2007 Gallup survey.
According to a recent 2008 WorldatWork survey, employee recognition continues to be top of mind as employers use their total rewards toolkit to differentiate themselves as an employer of choice. The survey showed that nine out of 10 responding organizations have employee recognition programs in place and 90 percent will continue those programs year to year.
In tough economic times, this strategy can help companies retain their best talent and emerge out of this economy armed with their troops in tact. Below are the keys to building a highly effective ongoing strategic employee recognition program as part of an organization’s total rewards package:
- Build a “Culture of Appreciation” Year Round: Use the holiday season to kickoff a new, year-round employee recognition effort or energize your existing one. Smaller, but more frequent gifts can go a long way to build employee loyalty.
- Create a “Recognition Moment” through Meaningful Rewards: Giving employees that generic company watch or one-size-fits-all “gift” is an uninspiring way to say thank you. Rather, award your employees by giving them the gift of choice – gift cards that allow them to choose their own reward with personal meaning. When employees redeem their award, it will create an important “recognition moment” that has a positive, lasting effect.
- Empower Everyone in the Process – From the Board Room to the Mail Room: Employee recognition should not reside solely on the shoulders of management. Every person in the organization should be empowered to acknowledge their peers and co-workers for a job well done. This enables frequent recognition and engages the entire staff –not just the top 10 percent--in the process. The goal is to involve 80+ percent of a company’s workforce in the recognition process, so that its motivating impact will spread across the entire organization.
- Tie Rewards to the Bigger Picture for Bigger Results: Employee recognition should be directly linked to the company’s goals and values. This strategic approach can align an entire workforce around achieving critical objectives. In economic times like these, a focused workforce can increase productivity levels...and help companies maintain or gain a competitive edge.
- Communicate, Again and Again: Frequent program communication raises awareness, increases participation, boosts performance, and most importantly, helps develop that valuable culture of appreciation. Don’t launch the program and expect it to sustain itself. Management must keep it alive by championing the effort throughout the year.
Rymax Announces Exclusive Partnerships
Rymax Marketing Services, Inc. has been busy the past few months, inking partnerships with a number of brands that will allow the company to expand its offering to the incentive industry. In August, Rymax announced a new and exclusive partnership with Baccarat, the 244 year-old French luxury brand recognized globally as the eminent creator of the world’s finest handcrafted crystal. This is the first time Baccarat products have ever been made available to the Incentive Industry. “Baccarat is an obvious addition to the Rymax portfolio of products,” says Randy Toth, New Business Development Manager at Rymax. “Their distinct, classic style aligns perfectly with the standard of quality we demanded of our partners.”
The following month, Rymax broadened the scope of its exclusive partnerships with SPRI, a leading manufacturer of health and fitness accessories. As the pioneer of simple yet effective methods of strength training, toning and building lean muscle tissue, SPRI remains on the cutting edge of today’s exercise trends. Rymax will service SPRI products from their offices throughout the country for wellness, sales incentive, employee recognition and loyalty programs.
A few weeks later, Rymax announced that it would become the first manufacturer’s rep in the incentive and rewards industry to distribute the American Express Gift Card. “We provide our clients the power of choice,” says Jessica Brown, Special Projects Manager at Rymax, “and the American Express Gift Card strengthens our ability to do that.”
October saw Rymax expand its extensive list of national partnerships to include Damiani Group, which owns the jewelry brands Damiani, Salvini, Alfieri & St. John, and Bliss. “Each piece, ranging from classic to modern, typifies the artistic talent of the goldsmiths who crafted the jewels, selecting the best stones and focusing on details,” notes Paula Ambrozic, Director of Corporate Compliance at Rymax. “We’re excited to partner with a company that is so historically significant and well respected.”
Most recently, Rymax partnered with Warrantech, a world class provider of warranty products and administrative services. This is the first time Warrantech, a company with more than 20 years experience in offering extended coverage plans on consumer electronics, will be available to clients in the incentive industry.
Ace Marketing Partners with Macy’s Thanksgiving Day Parade
Ace Marketing & Promotions, which calls its Proximity Marketing technology “the convergence of advertising and merchandising,” recently partnered with Macy’s to make the 82nd Annual Macy’s Thanksgiving Day Parade the first interactive event of its size, with interactive elements delivered via Bluetooth and Wifi to the more than 3.5 million spectators lining the streets of New York City on Thanksgiving Day.
The interactive elements actually began at Macy’s Balloon Inflation the day before Thanksgiving, where nearly a million spectators gathered to see the giant character balloons in the Parade come to life. When spectators entered the inflation area at 79th Street and Columbus Avenue, they received fun facts and behind-the-scenes info on the giant balloons via compatible mobile devices, including iPhones. Because there’s no network signal required other than a detectable Bluetooth or Wifi device, the content is free to consumers. “Having our Proximity Marketing solution showcased by Macy’s for an event [like this] is truly a huge testament of our technology and its progress,” notes Michael Trepeta, President of Ace Marketing & Promotions. “We’ve had a phenomenal year, being the first to conduct our Proximity Marketing & Rockzimity Marketing campaigns in premier sports & entertainment venues,” adds Matt Gaines, the company’s Chief Marketing Officer. “We’re just scratching the surface with the applications for this technology.”
Citigroup Expands Rewards Collection to Include Amazon
Citigroup’s ThankYou Rewards Network loyalty program recently announced that it will allow member to redeem ThankYou points for products fulfilled through Amazon.com. Members will now have even more redemption options in addition to the great deal of other useful rewards, such as travel and gift cards, they have long enjoyed. “We are pleased that Citi has chosen to make Amazon.com’s broad product selection and fast delivery capabilities available to ThankYou Rewards Network Members,” says Steven Shure, Vice President of Traffic at Amazon.com. “This integration will provide a dramatically different level of rewards selection and delivery capabilities.” ThankYou Network’s newly-expanded rewards inventory comes with a sophisticated new online interface inspired by best-in-class websites that empowers members to swiftly search and browse rewards by point range, category and/or specific products. The expanded range of categories includes everything from books, music and DVDs to the latest in electronics, home goods, sports equipment and more. Over the years, the rewards program has grown to 13 million members and has added other sponsors such as Citi Smith Barney and Expedia. Members can also earn points by shopping through ThankYou Network’s Online Shopping Mall at thankyou.com, which features more than 300 brand-name online and in-store retailers.
Are performance reviews bad for business?
An Oct. 20 article in the Wall Street Journal suggests that performance reviews destroy morale, kill teamwork and even hurt the bottom line. Samuel L. Culbert, a consultant, author and Professor of Management at the UCLA Anderson School of Management, notes that performance reviews are often not tied to pay – i.e., the boss will praise an employee, then say there’s no money in the budget for a raise. Culbert further notes that performance reviews damage the boss/employee relationship, because reviews are political and subjective. He suggests holding a “performance preview” instead – a reciprocal discussion about how the boss and employee are going to work together more effectively. A preview keeps the focus on the future, rather than rehashing the mistakes of the past. For more, visit http://www.wsj.com/businessinsight.
Invest in Employees During a Downturn
Even in an economic downturn, employee training is one of the most important investments a company can make in its workforce, says Tom Lahoud, Vice President of Training and Development for Enlightened Concepts, the creator of the Quick Reference Guides to various software programs. Training shows commitment to further an employee’s skill set, and engenders a development and growth environment that can help sustain morale in difficult times. “An efficient and well-versed employee is a valuable resource to the company, not a cost center,” explains Lahoud. “Eliminating a training budget leaves employees to go on a discovery journey using trial and error to figure out [work items such as] software, which takes more time, slows you down and costs more money in lost productivity and time.” Lahoud offers the following tips for employers and employees about training during tough times:
- Continue training by offering short and focused sessions, as well as “instructor help days” where an instructor visits users at their desk to assist them with specific challenges.
- Use Web-based learning to reach home-based users who can’t afford to go to a training vendor.
- Use Quick Reference Guides for users who are confident they can learn on their own but need a little hand-holding.
Incentives May Delay Retirement for Worker-Strapped Firms
With worries about a future shortage of skilled workers starting to trickle through various industries, a new study by the Employee Benefit Research Institute (EBRI) shows that incentives may be effective in encouraging workers to delay retirement – provided the incentives are publicized well before the employee plans to retire. The “EBRI 2008 Recent Retirees Survey” tested 19 possible incentives that might encourage retiring workers to postpone the event, finding the following o be especially persuasive:
- making workers feel needed
- offering them a full or partial pension while working part time
- making seasonal or contract work available.
The timing of the offer of a delayed retirement incentive is important. Some 63% of retirees report that these offers would have been a lot more effective if they’d known about them in the two years before they communicated their intention to retire. In general, workers begin thinking seriously about retirement not long before they actually do so, the survey found. Employee benefits typically play an important role in the retirement decision. One of the primary reasons that workers retire when they do is because retirement becomes affordable – 76% rate it as extremely or very important. Two other reasons for retiring mentioned by a majority of retirees were: 1) job satisfaction (63%) and 2) a desire for more personal or family time (60%). Almost half say their health was an extremely or very important factor. The full EBRI report is available at http://www.ebri.org.
Hana Launches New Firm
Barry Hana, former executive of Maritz Inc. and Incentive Concepts LLC, both based in St. Louis, has formed a business consulting service focused primarily on the incentive industry. The company, Performance Consulting Services LLC, will serve all components of the industry nationwide – corporations that use (or plan to use) incentives, merchandise and promotional products manufacturers, travel service providers, promotion and advertising agencies, industry resellers, independent sales representatives, associations and trade publications. “I have been part of management teams of three excellent companies, industry trade shows and associations,” says Hana. “I’ve recruited and managed several sales organizations, and built strong relationships with corporate customers, national distributors, resellers and regional independent sales representatives. My style, and the style of the company, will be highly collaborative with business leaders and uniquely participative with key levels of the organizations served.”
Industry Events
September 23-25
The Motivation Show
Chicago, IL
http://www.motivationshow.com/
October 6-7
Brand ManageCamp
Las Vegas, NV
http://www.managecamp.com/bmc2008/
October 11-16
DMA '08 Conference & Exhibition
Las Vegas, NV
http://www.dma08.org/
November 18-19
Extending Your Brand to Employees Conference
Chicago, IL
http://www.conference-board.org/conferences/conference.cfm?id=1727&nav=hr
In the Current Issue of Motivation Strategies
Why Recession is Good: Perspective from the Pros
By now, most people understand we’re in the midst of a recession, and some executives have begun reducing their recognition efforts and/or trimming their sales incentive investment as way to weather the anticipated dip in earnings. But is that a smart business strategy? Does it make economic sense? A recent Performance Improvement Council Perspective shares the views of two industry experts. Click here for the full story.
IRF Pulse Survey Looks at the Economy’s Impact
Many industry professionals are wondering whether the current economic downturn has had a negative effect on the incentive industry. Given its mission of advancing the science of incentives, the Incentive Research Foundation (IRF) decided to survey industry professionals to get their opinion of the down economy’s impact on the industry. To read the full article, click here.
Exploring the Building Blocks of ‘Employee Lifetime Value’
Historically, employees have been treated as cost creators, rather than as value creators. While it has been relatively easy to associate value with sales performers who generate revenue, the value non-sales performers contribute to an organization has been much harder to quantify. New technology enables managers to accumulate extensive information about organizational performance at an individual employee level. Furthermore, any organization, regardless of industry, size, revenue or number of employees, can take the first step to estimating the value contributed by their employees. To read the full article, click here.
Rewards Issues Dominate Top 5 Employer Concerns
The ability of reward programs to attract, motivate and retain talented employees has supplanted health care costs on the list of corporate priorities, according to the 14th annual “Top Five Total Rewards Priorities” survey conducted by Deloitte Consulting and the International Society of Certified Employee Benefit Specialists (ISCEBS). To read the full article, click here.
Return on Talent: Measuring the Relationship Between People and Profitability
Businesses regularly measure cash flow, revenue, market capitalization, growth and profitability. Now, human capital can be added to the list of regularly measured variables. Consequently, the term “Return on Talent” is likely to be as pervasive in the business lexicon as Return on Investment in the coming years. To read the full article, click here.
Why Incentive Programs Endure Recessions
Despite an initial hit when bad times set in, incentive programs are essentially recession-proof. This helps explains why savvy companies turn to incentive programs to drive business growth, even while cutting budgets for other business development functions. Five fundamental reasons explain why incentive programs, unlike other sales and marketing strategies, withstand economic downturns… To read the full article, click here.
About Selling Communications Inc.
Selling Communications, Inc. is a fully integrated, target marketing, media and technology agency that improves results for clients by focusing on the people who matter most. We can help your business grow and save you money by targeting key prospects, getting their permission and strategically integrating your marketing and sales communications with the specific audiences most likely to affect your business performance.
Take advantage of these SCI services to improve your business development:
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