CONDUIT

Rewarding the little things that make a BIG difference

When a tree falls in the forest and there's nobody there to hear it, does it make a sound?  Likewise, when a good employee does great work, or goes outside the scope of her job description, do your managers take notice?  And if they do, do THEY make a sound about it?  Do they draw attention to, acknowledge, celebrate, and recognize that employee?  Are they capitalizing on this opportunity to communicate such an example of excellence to that employee's peers and teammates - thus reinforcing the values that drive the organization's culture?  Herein lies a critical touch-point between a company's brand and its most important constituent - the internal stakeholders.  Is it being leveraged to its fullest potential?

And I'm not just referring to the big things, such as selling above quota or shattering safety records.  Those are, of course, the obvious (and expected) situations that probably are already and should continue to be rewarded.  What I'm specifically talking about are the little things that collectively make a BIG difference to your firm's overall performance and operation - those "above-and-beyond" behaviors that truly indicate that this employee is fully on-board.

There's no better way to foster a culture of recognition than by influencing the normative behaviors of "how things are done here."  When people start seeing those values lived and enacted in the office, then their likelihood of "getting on the bus" will drastically improve (see Getting the Right People on the Bus from 11/21/06).  Formal and frequent recognition that is visible to all employees ignites an engaged workforce.

A recent book, The Carrot Principle by Adrian Gostick and Chester Elton, follows our logic.  It proposes that the most effective managers go out of their way to learn about their employees' interests and lives outside of work, and customize rewards based on what makes their people tick.  Calling them 'carrots,' these formal recognitions appeal to intrinsic drivers, and should be practiced regularly to maximize motivational impact of any reward and recognition program.  We wholeheartedly agree.  And so would motivation guru Victor Vroom, who's Expectancy Theory states that employees will be motivated when they believe that increased effort will yield better job performance, which in turn leads to additional rewards that are valued by the employee.  This is the type of positive cycle that sustains exceptional performance.

But how often does this recognition need to occur?  Well, even though we're talking about rewarding everyday behaviors, the good news is that it need not be carried out every day.  For example, Gostick and Elton propose a tiered schedule of recognition, with a (free, "thank you" note) formal acknowledgment of good work be performed every 7 business days, with more substantial rewards interspersed at less frequent intervals throughout the year.  This should be doable, right?

And to take the onus off management and improve the likelihood of organization-wide adoption, the responsibility can and should be spread throughout the company.  Allow everybody to participate in the act of recognizing positive behavior.  Distribute the power of handing out spot awards to all your employees by formalizing peer-to-peer recognition as part of the non-cash incentive strategy, and you will see your employee engagement levels increase.  No doubt about it.

Also, keep in mind that those rewards need to be commensurate with the level of impact to the organization; if they're not, they can actually be de-motivating.  That's part of Vroom's theory, too.  And we definitely don't want to create that effect through our incentive initiatives.

This is quite an undertaking, huh?  It sure is, but employee engagement is a 2-way process.  When employees see and feel that the organization takes notice of all their contributions - big and small alike - they will reciprocate.

Posted by Keith Weiss on August 15, 2007 at 03:06 PM in Incentive Strategies | Permalink | Comments (0)

Are Budgets Good for Growth?

With the budget setting period over for many of us, its important to point out one important fact: Budgets can often stifle innovation. While the budget process looks forward it does so with the past in mind and is used primarily as a spending control tool mechanism.

But budgets should be designed with managers and not accountants in mind. Not having dollars in the budget to fund a worthwhile project is myopic. Not only does it discourage growth (achieved thru additional revenue or cost savings) but it stifles innovation and employee ownership.  Image the impact on your business (not to mention the employees who thought of that winning idea) when developing an innovation is shelved because there is nothing in the budget.

The sheer amount and velocity of change within all business models requires a quicker response to meet competitive threat and/or emerging opportunities. A flexible budgeting process seems more appropriate in our fast-paced, global economy. Think of that the next time you need to close a performance gap.

Monitoring the return on incentive spending is also made easier (and more actionable) by illustrative technology. Flash for example can highlight information patterns providing convenient, real-time information to budget owners across the hierarchy. Thru data dashboards, mangers can examine all the relevant vital signs of key projects and measures while linking performance data to budget utilization. It is thru this process that budget monitoring (as a growth tool) becomes more relevant to the organization and provides the context for knowledge that can be exploited for gain.

Posted by Mike Ryan on January 22, 2007 at 11:50 AM in Incentive Strategies | Permalink | Comments (1)

Is your “people strategy” world class?

Conduit recently examined incentive strategies implemented by leading companies (across 8 industry groups) with both domestic and global participants and found the following trends. 

  • Companies are using incentives programs to address critical business behaviors across the entire enterprise. Progressive companies are using non-cash to strategically strengthen cash plans, promote best practices, brand employee behavior, and support training and promote worker competency.   
  • The “individualized” communication and tracking of value propositions and performance attainment against goal is on the rise. Fueled by the technical capabilities of web-based programs, more and more companies are utilizing one-one direct marketing style communications and feedback mechanisms while lowering administrative costs in the process.
  • Several companies using the web are centralizing (or planning to centralize) all incentive activity into a single web portal. Companies report that the often conflicting objectives of reward consistency and cost control can be realized without compromising or limiting the planning autonomy enjoyed in decentralized units. 
  • Real-time web-based reporting is on the rise. Managers using electronic reporting functions report saving considerable administrative dollars while also gaining enhanced planning flexibility and creative options. The move also appears to be adding to the incentive experience for participants and increasing program visibility within the organization.
  • As an award mechanism, debit card utilization is on the rise. Based on our interviews, we suspect that debit cards will outpace merchandise as the leading award component for annual programs. Branded debit cards will become the award anchors for integrated reward and recognition programs across a company’s employee base.

Posted by Mike Ryan on September 11, 2006 at 08:43 AM in Incentive Strategies | Permalink | Comments (0) | TrackBack (0)

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