Improving Employee Performance through Recognition

Do Recognition Programs Motivate the Majority?

Do employee recognition programs really drive the performance of the majority of your employees? Or do they merely recognize and reward those employees who work above and beyond the norm? If you want improved performance should you structure a simple recognition program that allows peers and front line managers to say thanks with a periodic reward? Or should you design a program that has real objectives, communications, measurement and feedback mechanisms with an appropriate award system to drive the performance?

What Incentive Award Company to Use?

In 2003, the International Society for Performance Improvement conducted the most comprehensive study ever on the effectiveness of the incentive industry. It researched the usefulness of incentives to employers in determining the relationship of incentives, motivation and performance in the workplace. They concluded that when an incentive program is properly implemented, you can improve performance in individuals by 27% on average and team performance by as much as 45%!

The results of the above study did not surprise some of us in the incentive industry. The full service performance improvement incentive companies have seen these outcomes for years. In fact they have seen results far greater than these. If you could search through the archives of successful incentive companies you would find literally hundreds of unbelievably successful programs. Unfortunately for a myriad of reasons, not the least of which are proprietary information and confidentiality, these findings rarely reach the eyes of people in their own companies, much less the industry in general. And that’s a shame.

The incentive industry is loaded with companies that say they can design and implement performance improvement systems. Unfortunately many do not have the expertise to do it. Recognizing performance is a whole lot easier than designing and imlementing a program to drive improved performance. You wouldn't schedule an appointment for a heart ailment with a foot doctor, would you? Then don't ask an award company that specializes in giving grandfather clocks to someone who has been on the job for thirty years to change an employees behavior through a well designed system that includes all the pieces mentioned above.

You Own the Tools

The tools to change employee behavior and improve performance are already in your hands. It is often not much more complex than telling your employees what you want them to do, teaching them how to do it, measuring their performance, telling them how they did and then positively reinforcing them for their results. If you want to look to the incentive industry for the expertise to help you construct and implement a program that will drive results, not just recognize the performance of a few, seek out the professionals who have done this for years.

If done correctly your incentive award program will drive the results you want.

Be Well, Be Happy, Hug Someone!

Using Incentive Programs to Improve Employee Performance

The Employee Performance Puzzle

If you Google “Improve Employee Performance” you will find hundreds of thousands of interesting approaches and options. Everyone seems to have an answer...from training to better communications, research, consulting, new appraisal software, different measurement, 10 step management guides, performance assessments or surveys and reviews, etc..

While most companies that provide these various solutions have valid methods of improving performance, rarely do you see any of them recommend that you close the loop of performance improvement by rewarding your employees for results. Award programs just seem to be born out of trial and error, the natural progression after other solutions haven’t produced the desired result. Most companies think they know all the pieces of the employee performance improvement puzzle. They’ve spent millions on the separate pieces but have they determined the best way to group the pieces to affect the best result?

Award Systems Can Drive Performance

Employee engagement is the big challenge today. Corporations have fewer dollars to spend and are constantly striving to improve performance. Over the last few years, there have been many articles written on employee recognition as a viable way to improve performance. Studies have shown that recognition is a key element in employee satisfaction, and employee satisfaction is a key element in employee performance. Satisfied employees drive customer satisfaction and improved bottom line results. If it’s that simple, why don’t more companies include award systems to motivate and recognize their employees for improved performance?

Other studies have stated that when true incentive/awards programs are implemented correctly, individual performance improves by 22%. They also found that when there was both an individual as well as a team component that individual performance improves by 27% and team performance improves by 45%! Of course the essential point here is “implemented correctly.”

Implemented Correctly?

I have seen many recognition programs developed by corporations that are not true incentive programs. They are put together by recognition and service award companies (often the largest ones) that really don’t have the expertise to design a true performance improvement program. Their expertise is implementing years of service or simple employee “thank you” efforts, with awards that are antiquated. These programs rarely include measurable individual objectives, almost never have any feedback, have little ongoing communications, little if any research or training and the type of awards systems that were built to recognize years of service back in the 50’s. If you want a program to motivate your employees to produce the kind of results mentioned above, find a full service incentive company that has the experience to get it done, without the bias of an award system that is obsolete.

Properly constructed incentive programs can produce results.

Be Well, Be Happy, Hug Somone!

Online Incentive Programs Part VI

The Benefits of Online Reward Systems

While it may seem that the most compelling reason to implement a web-based awards system is the cost savings, that may be secondary when compared to the results you can achieve when you have the right system to drive performance improvement more effectively and efficiently.

In addition, a well designed web-based award system will allow you to:

• Implement performance improvement activities at the touch of a button
• Instantly communicate your message
• Use any type of award necessary to appeal to the lifestyle needs of your participants
• Easily survey participants for immediate response
• Effectively train and quiz participants on pertinent subjects
• Provide instant measurement and feedback
• Have complete flexibility of design regardless of organizational structure
• Ensure all programs parallel the corporate mission and values
• Have complete control of all performance improvement budgets
• Be in compliance with all rules and regulations

With the unbridled change that occurs in technology, having a web-based solution that is built to embrace change will put you on the leading edge of motivating and rewarding your participants. Traditional offline awards, systems and solutions work well and will continue to work well for participants who may not have the type of occupation where using web based systems would be effective. However. this group of people is shrinking daily, and even when they may not have a web connections at work, most will have that ability at home or through family. For the future, to capture the attention and motivate the majority of the most important people in your company or distribution channel, you will need a different strategy… a well planned web-based incentive and recognition award solution

If you have questions on the incentive awards industry, please feel free to ask. My passion is to help clients run successful incentive award and recognition programs. Successful programs help many folks share in the success of their hard work.

Online incentive award programs can produce some great results and have become the best value in the industry!

Be Well, Be Happy, Hug Someone!

Online Incentive Programs Part V

Objections to Online Reward Systems

The objections most often heard concerning Web-based Reward Systems are:

1. Points are impersonal; we’d rather give our participants something tangible.
2. The awards in points based systems are inflated and cost too much.
3. These systems take too much internal time to administer


While there is some validity to these important objections, they can be answered to the satisfaction with thorough planning during the design phase of the program.

1. Points alone are not personal. However, what points stand for can be very personal. When points are linked to specific individual achievements and performance, points are the tangible currency that an organization uses to communicate value or appreciation. Points then have a “halo effect” or “trophy value” that far supersedes the actual cost. Companies should select the reward options that points can be spent on very carefully ensuring that there is a wide selection, good value and enticing choices. If the point system is supported with technology, take the time to ensure that a high-tech solution incorporates opportunities for high-touch moments. This is essentially a communications question and can be answered by using communications techniques such as electronic or physical point check reminders, letters of appreciation, copies of recognition nominations, etc.

Consumer loyalty points programs abound. Every airline, bank card, hotel, car rental company and hundreds of other companies use points as the currency for reward. They are highly valued and personal to all who accumulate them especially when linked to the desired award.

2. The economic value assigned to points varies by company. If you’re buying an off-the-shelf tracking system, make sure that you can define the value assigned to points. It’s easy. The hard work is ensuring that performers have enough opportunity to earn points and quantifying the value of the performance associated with the points.

The cost of the awards in points is something that is easily negotiated prior to the launch of the system. Program suppliers require a reasonable profit to provide you with the service and expertise that you need to make your program successful. You can pay for this in several ways; some choose to put all program costs in the price of the award, in which case it may appear inflated. If you use this method and are charging your participants income tax on points issued, you should adjust the amount you tax by the estimated administrative costs included in the point value. Others choose to outboard these costs as administrative fees, in which case the awards will not appear inflated. Or their can be a combination of the two. The choice of how to pay for administrative costs is up to the client.

3. To make your programs successful, it will no doubt take some internal time to administer. But generally, once a program is in place, this time is far less than you might think. Compared to complex award solutions of the past, when you consider the time to develop communications, administer the award portion, do the tracking and measurement, the time spent with online web-based systems can be substantially less than doing it manually. As mentioned previously, these types of complex systems just couldn’t be done in the past as easily as they are implemented today.

If you have questions on the incentive awards industry, please feel free to ask. My passion is to help clients run successful incentive award and recognition programs. Successful programs help many folks share in the success of their hard work.

Online incentive award programs can produce some great results and have become the best value in the industry!

Be Well, Be Happy, Hug Someone!

Online Incentive Programs Part IV

What Awards To Use?

At the heart of any incentive or recognition award system are the awards that you will use to motivate your participants to improve their performance. A great deal of time and money is spent in the research, planning, design and implementation of a web-based system. To get the best results from your system, make sure you spend some time considering what types of awards to use. In your selection process check to see if the supplier is award neutral, if they will populate the online award mall with anything you think will motivate your participants.

In today’s modern workforce there is an incredible diversity. Workers span generations, are of all races, of all religions and cultures. Employees are more aware today of the need to balance their work and life experience. They have become customer-centric in how and where they shop. Armed with the information available on the internet, they are more demanding. Choice in their everyday life has become the rule not the exception and they are not content when the choices they receive don’t parallel their own lifestyle.

The awards you provide for your participants should be as diverse as they are. With a web-based solution, this is easier to do than ever before, so don’t settle for systems that are narrow in their focus of what award to use. The traditional merchandise catalogs of the past are a good place to start, but they are by no means the only award that should be considered. If you find that a company is marketing their system at extremely low cost (or possibly even no cost) the entire profitability for that supplier will be hidden in the limited award portfolio that they offer. In these cases the cost of the awards can be far greater (often by 50% or more), than the cost of that same item at retail. In the long run, paying for the system and its maintenance will be a better value for you and your participants than having a system for low cost where your participants do not receive full value for your awards budget.

The multi-cultural and multi-generational workforce of today needs more choice to motivate them than the traditional merchandise selection used in the past. Don’t be fooled into thinking that all the other award options are “just like cash” and don’t provide the intrinsic value that you can get from a specific merchandise item. Intrinsic value of the item should come from the mind of the recipient, not the giver. Different generations, cultures etc, are motivated by different needs. If you want to capture their attention, let them have what motivates them.

Your web-based system makes it easy to include almost anything you feel will help you motivate and reward your employees. You can certainly include the traditional merchandise items, but consider other items as well such as gift cards, company identified merchandise, merchandise specials of the moment, your own company products (if appropriate), individual travel, vacation packages, life style awards, event ticketing, even company stock or charitable contributions. Work – Life programs are very exciting initiatives in many organizations; you may also want to consider including some of them as well.

If you have questions on the incentive awards industry, please feel free to ask My passion is to help clients run successful incentive award and recognition programs. Successful programs help many folks share in the success of their hard work.

Online incentive award programs can produce some great results and have become the best value in the industry!

Be Well, Be Happy, Hug Someone!

Online Incentive Programs Part III

What Do You Want From A Web-based Award System?

Web-based incentive and reward systems range from simple online “redemption engines” used mainly to showcase and distribute awards to winning participants, to complete turnkey enterprise solutions that will manage workplace performance throughout the organization. Choosing which one is best suited to your needs will depend on several factors, just some of which are:

• Will it be utilized for single or multiple programs?
• Do you want the system to allow you modeling capabilities to forecast an ROI?
• Will it be an enterprise wide solution or used in just one area?
• Do you want the system to be tied to one particular award supplier, or independent and able to provide any type of award that fits your participant’s lifestyles?
• Should it have the capability for expanding for future needs?
• Should it provide you with the ability to model various types of rules structures and test their outcomes against historical performance records before you commit to a final structure?
• Do you require a peer to peer or management to peer recognition component?
• Do you require internal messaging capabilities?
• Do you want it to have the future capability to enable real time performance management or performance evaluation modeling?
• What are your total communication needs within your award initiative?
• What type of tracking and measurement will be needed?
• Will it need to contain training components?
• Is there a need for program quizzes and tests?
• Does it need to be totally custom branded?
• Do you require a component that will provide for participant surveys?
• Will you require online reporting, and if so to what depth?
• How many different types of awards do you want on your site?
• How much do you want to invest in a web based system?

Before you start the process of selecting a supplier, list as many of your system requirements as possible, it will save time and money. With the large array of companies that have web solutions available you will find that not all systems provide the same features. Many were only built to drive the sales of traditional merchandise awards and may not offer the award flexibility you need.

If you have questions on the incentive awards industry, please feel free to ask. My passion is to help clients run successful incentive award and recognition programs. Successful programs help many folks share in the success of their hard work.

Online incentive award programs can produce some great results and have become the best value in the industry!

Be Well, ,Be Happy, Hug Someone!

Online Incentive Programs Part II

Why Use an Online incentive Award System?

With a web-based system you have the complete flexibility to react to any corporate need and address it with a performance improvement activity in days rather than months, or in hours rather than days. It is, by far the cheapest, most cost effective method of implementing a successful performance improvement effort.

The reasons to implement an award system online or off are the same…to achieve a wide array of company objectives. These objectives might include:

Sales and Marketing Programs

• Stimulate sales growth
• Attract new customers
• Achieve sales goals
• Stimulate sales referrals
• Build loyal customers
• Retain and thank current customers
• Liquidate aging inventory
• Introduce new products
• Promote profitable products
• Facilitate display promotions
• Improve product knowledge
• Promote special events
• Consumer promotions
• Reward sales excellence

All Employee Initiatives

• Reduce turnover
• Attract new employees
• Recognize outstanding performance
• Increase customer satisfaction
• Improve safety performance
• Implement suggestion activities
• Recognize years of service
• Test employee knowledge
• Reduce shrinkage
• Reduce waste and scrap
• Improve attendance
• Drive operational excellence
• Improve training activities
• Implement quality initiatives

If you have questions on the incentive awards industry, please feel free to ask. My passion is to help clients run successful incentive award and recognition programs. Successful programs help many folks share in the success of their hard work.

Online incentive award programs can produce some great results and have become the best value in the industry!

Online Incentive Programs-Part I

In the Beginning

The reward and recognition industry had its roots in the depression years of the 1930’s. It was during that time that pioneers such as E.F. MacDonald and Edward Maritz began to sell their jewelry, watches and other merchandise to corporations as sales incentives and service awards for employees. From those beginnings an industry emerged that is estimated to be in excess of $60 billion and includes every conceivable type of award.

While the industry has certainly changed over the years with the addition of group and individual travel, special recognition items and the increasingly popular merchant gift cards, and bank debit cards, nothing has made such an impact on it as web-based award solutions. With the click of a mouse, a company can now have what only a few very large corporations could previously afford…a professionally administered and communicated incentive or recognition program for their employees or channel partners.

Internet Market Today

According to the Nielsen//NetRatings, the global standard for Internet audience measurement and analysis, nearly 85 percent or 231.54 million Americans have access to the Internet from home. These numbers parallel the usage of the internet by employees in small businesses as well as medium to large companies. In comparison, Internet access penetration hovered around 66 percent in February 2003, rising nine percentage points year-over-year. "In just a handful of years, online access has managed to gain the type of traction that took other mediums decades to achieve," said Kenneth Cassar, director of strategic analysis, Nielsen//NetRatings.

Web-based Incentives and Recognition Rewards

Because of this type of internet access, there has been a proliferation of companies offering web-based incentive programs. Almost every traditional incentive company has their own online solution, and as the industry has little “barrier to entry” there are more and more companies that are building online incentive solutions and joining the parade.

While there are no complete statistics maintained on Industry usage, some research indicates that over 30% of the industry’s current revenue is produced online, 45% of companies running incentive and reward programs use the internet, 80% of current incentive users are interested or very interested in running programs online, (Maritz, Inc., Survey) and it is forecast that online incentive companies will represent over 70% of the industries revenue in 5 years.

The Real Value of Web-based Technology

Web-based incentive and recognition award technology is far more efficient and less expensive than implementing a program offline. Less than ten years ago, only those corporations with substantial million dollar plus incentive and recognition awards budgets could implement complex, multi-layered performance improvement activities. Today, almost any size company can have these same complex programs at a price that fits their budgets.

After initial set up fees based upon size and scope, most of the online incentive systems have ongoing monthly maintenance or licensing fees that are minor in comparison to the cost of providing these same activities offline. Administration, communications, training, measurement, feedback, surveys, quizzes, award issuance and overall program management can be performed through a web-based system, at a fraction of the cost of doing it offline. Prior to these systems, it was not unusual for these types of activities to cost as much as 30% to 40%, or more of a company’s total rewards budget, and they often exceeded estimates while not exceeding goals.

Today, the cost is usually less than 10%! That puts 20% to 30% or more of your budget back where it belongs, in the hands of the people you’re trying to motivate.

Online incentive programs are fast becoming the largest part of the incentive award industry.

My next blog will address the reasons to use an online incentive program system.

Be Well, Be Happy, Hug Someone!

Are Your Years of Service or Recognition Awards Obsolete

A Historical Perspective

Service award programs had their advent during the depression years. They were designed by companies as alternative ways to sell their products during this difficult time. They initially included groupings of watches and jewelry because those items carried the highest profit margins and because those companies had a very difficult time selling them during those harsh economic times, (kind of like today)!

In the beginning years, they were used as rewards in universities for students to mark their graduation and in industry to celebrate the number of years on the job. They stayed virtually unchanged until the 60's, when competition and employee surveys started to demand more choice in awards.

Today, it is not unusual to hear "I worked for this company for over thirty years and all I got for it was this watch, and I don't need another watch!"

The leading service award vendors have tended to hold their award offerings constant over the years using mainly jewelry, clocks/watches and silver/crystal/porcelain giftware as the staple items. The question often debated is "are these the only items that should be used?"

The "chicken and the egg" question is often asked. How were these original items chosen, out of necessity to sell them during poor economic times, because of their consistently high profit margins, or because it was what employees actually wanted?

Bob Nelson, author of "1001 Ways to Reward Your Employees" in an article on service award programs several years ago stated:

"The vast majority of recognition programs are obsolete according to a ten year study, from the Independent National Study of Recognition Policies and Practices, by Perspectives Resources Inc. In fact, many of them demotivate rather than motivate employees because they are based on concepts designed in the '60's and '70's and no longer meet either corporate objectives or employee needs.”

Over the years I have had many clients asking for ways to include other award options into their recognition and service award programs. I have conducted detailed research on the pricing of awards in traditional merchandise recognition and service award companies and have found that pricing can easily be 50% higher than retail, and often 150% to 200% more!

You would think that when the economy is in such turmoil, corporations would owe it to their employees to provide them with the best possible selection of recognition and service awards at the best possible value?

Can you believe that Generation X'rs have already started to turn 40??? Do you think that the traditional service and recognition awards that may have worked for their parents or grandparents will work for them??

We have conducted extensive research on pricing of recognition and years of service awards and would be happy to share it with those who have an interest. You can reply to this blog or my email address can be found in my profile.

Thanks for reading.

Be well, be happy and hug someone!

Do Incentive & Recognition Awards Programs Really Work?

According to a study conducted by Kluger, Avraham and Angele DiNishi entitled “Feedback Interventions: Toward the Understanding of a Double Edged Sword” and published in Current Directions in Psychological Science.

· 1/3 of all non-cash incentive programs actually decrease performance
· 1/3 of incentive award programs produce no results
· 1/3 of incentive award programs did produce results.

While this type of research was rarely shown to a client, it was something that many of us in the industry knew because of ROI analysis we had done on many of the programs that we implemented. Of course our results were typically better than the average, because we knew the steps to take and different rules to use to give the program a better chance for success. Even then, it was not uncommon for a program to have only 50% of the participants actually performing above goals, earning awards and producing results. The wise industry sales people told this to clients to manage expectations; the not so wise took the money and hoped that the program wouldn’t blow up in their face. If it did, it would be the last program they sold to that client. If it didn’t they would all go along dumb and happy and keep implementing marginally successful, or often unsuccessful programs. I’ve seen programs like this stay in place for years until some executive finally challenged their own management on why they were spending the money and what they were getting in return. At that point, the baby poop usually hit the fan. In future posts we’ll discuss this phenomenon of apathy toward ROI and other lack of measurement.

Over the years, I’ve seen many estimates of the size of the incentive industry. These estimates range from $35 Billion to $65 Billion. No one really knows for sure because there are so many pieces to the industry.

As of today, the Incentive Marketing Association pegs the number at $46 Billion! It is so large, they say, because incentives do work! Really? Well some do but most don’t

Based on the current estimate and the above study:

· $15 Billion is spent by corporations on programs that actually decrease performance
· $15 Billion is spent by corporations on programs that have no effect on performance
· $15 Billion is spent by corporations on programs that do produce results.

WOW! Wouldn’t it be nice to have a job where you only had to be right 33% of the time? Well, many in this industry do!

As we delve more into the inner workings of the incentive and recognition industry, I’m sure I will find friends who will agree with me and foes who don’t like someone exposing all the secrets that the industry has kept from clients for years. But, now with the internet, so much is changing that it’s about time that we take a look at where we’ve been and what might be ahead of us.

I look forward to sharing this information with you in this candid and open forum and hope you find our discussion informative, lively and fun. If you have anything you want to add, or any question you want to ask, please let me know.

While my baby might be ugly, for all those parents out there, yours certainly isn’t!

Just remember, if you’re implementing a non-cash incentive, motivation or recognition award program...there’s a 66% chance that your baby is ugly!!

Be Well, Be Happy and Hug Someone