Self Employed Web

Keep Them SMILING

Posted on Friday, January 6th, 2006 by

Happy employees and satisfied customers are two of the invaluable benefits of an effective incentive and recognition program

Not long ago, an engineering and manufacturing company on the East Coast underwent the lengthy and complicated process of earning ISO (International Organization for Standardization) certification. A team of nearly 50 employees from the company worked for more than eighteen months on the difficult project, often staying late and coming in on weekends. Finally, upon the successful completion of the massive undertaking, they were all ushered into a conference room, where the company’s CEO grandly unveiled his expression of thanks and recognition for all of their hard work and extra effort: a pile of plastic coffee mugs.

“Soon, those coffee mugs became a facetious symbol of quality in that company,” says incentive and recognition consultant, Adrian Gostick, whose company, O.C. Tanner, was eventually brought in to help turnaround employee loyalty and performance after the coffee mug debacle. “This notion of ‘Hey, I’m paying them aren’t I?’ just does not buy commitment these days and that’s why companies that adopt this attitude can’t figure out why their workers keep leaving.” Still, he notes that many companies that would never consider operating without a comprehensive business plan or sales strategy, continue to put little thought, if any, into incentive and recognition programs. As coauthor of the motivational guide, A Carrot a Day (Gibbs Smith, $12.95), Gostick warns that businesses that continue to follow this approach risk sacrificing their future in the current business climate, where the Bureau of Labor Statistics estimates that nearly one-quarter of the U.S. workforce changes jobs every year. “Recognition is the lifeblood of innovation, retention, and productivity,” he writes in his best-selling book. “It’s what keeps employees motivated during the tough times (And it’s why they will still be devoted when things improve).”

Determine your company’s core values and goals
It may seem obvious that before you can begin to reward and motivate your employees, you should figure out what values and goals you are trying to promote, but many times, businesses blithely skip this crucial step. As a startling testament to this fact, a recent Franklin Covey study found that only 44 percent of the employees surveyed said that they felt their employer had effectively communicated their company’s goals to them.

Even the companies that do take the time to complete this important step often stumble. “You want to remember that your goal is to recognize and reward behaviors not individuals,” says Gostick, who has counseled both small businesses and Fortune 500 companies. “Every organization has its top performers, but that doesn’t mean that employees at every level aren’t living up to your company’s core values. A common mistake I’ve seen in my clients is they build a program that just ends up rewarding the boss’s favorite employees. This can breed resentment and erode morale.”

Instead, the Salt Lake City-based O.C. Tanner (octanner.com) encourages its business clients, when they are defining their values and goals, to also identify specific day-to-day tasks that support these goals. According to Gostick, this strategy allows businesses to better reinforce what they are trying to achieve, while providing more opportunities to recognize those often overlooked employees who are going above and beyond on more mundane tasks, like answering customer calls promptly or avoiding accidents by keeping a clean workstation. Perhaps, rewarding them with a little perk, such as a week of using a coveted parking spot near the front door or an afternoon off to pick up their kids from school.

Change Behavior with Incentives
attempts to change their behavior in attaining a goal,” says Doug Press, president of the White Plains, New York-based company The Incentive Group (incentivegroup.com). And while Press acknowledges that incentive programs are traditionally associated with sales promotions, he notes that they can be structured to address almost any workplace function from marketing to safety to attendance. “If, as a small business owner, you’ve ever said ‘I wish I could get my employees or customers to do blank,’ just fill< in the blank and an incentive program can be designed around it.”

He contrasts incentive programs with those that target “recognition,” which typically involve an honor or status conferred upon an employee for an accomplishment like length of service. The distinction between the two is more than just semantics, Press notes. A plaque or certificate that might be suitable to acknowledge an employee’s tenure will not be sufficient impetus to get him or her to double their annual sales numbers. “That is the most common problem that small businesses face when setting up an incentive program, they underfund the rewards and then they don’t get the results they were looking for,” he adds.

Crack into a tough new market requires more upscale items, Press says. His company’s online incentives catalog offers the kinds of big-ticket items—from big-screen plasma televisions to fine furniture to golf and ski vacations—that he says are necessary to really push employees to go above and beyond. “The most motivating factor in an incentive program is for the worker to aspirationally identify with achieving the reward; that feeling of ‘I have to have that’ needs to be there for it to work,” he says.

Still, Press acknowledges that many small business owners who would gladly reward their workers with these types of gifts, also balk at the prospect of devoting large amounts of time and money to set up and administer an incentive program. “Fortunately, the Internet has become the great equalizer,” Press says. “By putting our programs online it has taken the cost out of many of the transactions, and now many small business with budgets as low as $1,000 a year can put together a very effective incentive campaign.”

For those small businesses that still remain doubtful, it is also important to note that most incentives programs, even those with modest goals, can often pay dividends far beyond the program’s original intentions.

For example, the Indiana-based manufacturing company Workhorse Custom Chassis recently implemented a campaign to expand sales for their step van and recreational vehicle chassis business. To entice the nationwide network of dealer sales representatives to participate and recommend their product, they adopted a prepaid debit card incentive program run by the Atlantabased incentive and recognition company, Performance Systems Group (achievacard.com). As dealers from across the country gained new leads, they faxed the details to Performance Systems, which compiled the information into a marketing database while sending back an acknowledgment to the dealers. A debit card was then quickly sent out to each dealer, simultaneously activated and credited for each chassis that they eventually sold.

For example, the Indiana-based manufacturing company Workhorse Custom Chassis recently implemented a campaign to expand sales for their step van and recreational vehicle chassis business. To entice the nationwide network of dealer sales representatives to participate and recommend their product, they adopted a prepaid debit card incentive program run by the Atlantabased incentive and recognition company, Performance Systems Group (achievacard.com). As dealers from across the country gained new leads, they faxed the details to Performance Systems, which compiled the information into a marketing database while sending back an acknowledgment to the dealers. A debit card was then quickly sent out to each dealer, simultaneously activated and credited for each chassis that they eventually sold.

Recognition
(cardex.com), says, “recognition programs are the one thing that every company can and should do to keep both valued employees and profitable customers.” But, she cautions that to really be effective (and to prevent counter-productive episodes such as the one involving the plastic coffee mugs), the program should strive to provide rewards that can be customized to fit the individual employee’s tastes.

Years ago, now offers small businesses a new product that can do exactly that. For a low set-up fee, Card Express’s customizable, pre-paid Visa and MasterCard debit cards let companies show their appreciation with a gift that can be used at millions of locations nationwide, making them much more flexible (and appealing) than a standard store gift certificate. “We allow our clients to print individual messages on the front of each card or brand it with their company logo as well,” Papalard notes. “That way, when an employee goes out and uses the card, it reinforces company loyalty with the worker and, for the employer, it’s like free advertising.”

In addition, the debit cards allow companies to avoid the pitfalls associated with a cash-based rewards program. “Cashbased recognition programs are very expensive to administer and there are, of course, security issues with them, too,” says Papalard. Also, cash rewards tend to make much less of an impact with employees, a fact supported by a 2005 incentives industry survey. It found that 60 percent of those workers surveyed viewed cash rewards as merely part of their normal salary, instead of as recognition for exceptional performance. Papalard suggests this is because employees rarely set aside cash to buy something special. “Often, they will get cash and then on the way home from work, they will use it to get gas in their car or buy groceries,” she says. “Pretty soon it’s all gone and the employee can’t really point to what their reward got them.”

But whatever you choose to reward your employees with, Gostick’s primary piece of advice is don’t wait too long to do it. “Most turnover in companies takes place between the first and second year,” he notes. “Yet, most small businesses on a tight budget might not formally recognize employees until they reach a sales level or service tenure that takes decades to build up.” But by then, it is often too late.

“You might think recognition is all about the past,” Gostick says, “but it’s really all about the future.” And for small businesses, whose most important assets are often its people, properly motivating and recognizing employees might just be the best method to ensure better days lay ahead.

A FEW SUGGESTIONS

Increasingly, employers are looking to build loyalty among their employees by

branching out beyond the traditional flowers and candy for birthdays or gold watch upon retirement. Instead, personalized rewards, with a touch of flair, are now more common.

For example, the Clean Ridge Soap Company of Pound Ridge, N.Y. (cleanridge.com), offers all-natural soap gift baskets ($20–$100) that includes handmade, scented liquid and bar soaps, a thick washcloth, and a wooden, decorative soap dish.

“One of my corporate clients wanted to ensure each of the employees in his division received something really unique on their birthday,” says Mia Camacho, founder of Clean Ridge. “So, at the beginning of the year he gave me a list with all of their birthdays. As each one comes up, I put his company’s logo on one of my gift baskets and send it to the employee with a personalized birthday card that the whole office has already signed. The response positive.”

If you want to give more flexibility to whomever you’re rewarding, the hottest new thing on the market are prepaid debit cards from Visa, MasterCard, and American Express. These cards, which work just like any other credit cards, provide more options than the standard gift certificate and can be purchased from most incentive companies like Card Express or Performance Systems Group for a small fee on top of each card’s pre-loaded dollar value. For a short-lived promotion, the cards can be designed for one-time use, or they can be set up to be periodically reloaded if your company is trying to put in place a long-term sales or incentive program.

To reward company service milestones, most incentive experts now

recommend giving a gift more symbolic of the employee’s long-term commitment. As an alternative to a plaque or certificate, think high-end and heirloom. Gifts like a Waterford crystal vase ($250) or a Coach leather briefcase ($500) can make a much bigger impact because they elevate your employee’s status and, invariably, end up in your employee’s home rather than just hanging on a cubicle or office wall.

The most memorable and exciting reward for employees, however, is travel. In fact, a 2005 incentive industry survey found that 74 percent of the companies surveyed said that they could build a better incentive and recognition program around travel rewards than cash.
Travel, and to a lesser degree, merchandise awards, seem to both motivate and satisfy more than cash because they are items that people wouldn’t ordinarily buy for themselves, the study found.

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