incentiveWORKS Exposing Rewards Programs August 24th, 2005

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incentiveWORKS Exposing Rewards
ProgramsAugust 24th, 2005

• Jo-Anne Pusateri
• Director, Consulting Services

Stevi Hanson V.P. Business Development
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Session Overview

• Welcome
• IMA various support models
• De-mystify four major components of reward
  programs
• Promotion and Communication
• Program Design and Database Management
• Program Administration and Measurement
• Award Selection and Fulfillment
• QA

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Cash vs. Non-Cash Video Clip
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Why spend money on Rewards when you can invest
in Results?
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IMA Incentive Marketing AssociationDifferent
Approaches to Reward Programs
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• The right incentive program can boost performance
  among teams of employees
• by 44 and among individual employees by 25
• International Society for Performance
  Improvement study, 2002-2003
• Due predominantly to design and administration
  problems, only 30 of
• implemented incentive pgroams are considered
  successful.
• Yankelovich Study
• Properly constructive incentive programs can
  increase performance by as much
• as 44.
• Site Foundation study - 2004
• 3 out of 5 respondents agreed that cash bonuses
  are part of total remuneration
• June 2003 study by the Incentive Federation
• The value of the cash bonus as an award for
  performance above and beyond
• does notstand out anymore.
• The Benefits of Tangible Non-Monetary
  Incentives, SITE Foundation, 2003

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Promotion and Communication

• Typical Challenges

• Dont know the rules or rules too complicated
  to understand
• No hype no excitement
• Objectives are not achievable
• Program becomes stale, forgotten
• Behaviour not reinforced, congratulated
  immediately.

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Promotion and Communication

• Keys to Success
• Clearly define program rules and regulations
• ( the do this, get that)
• Make the goals achievable
• Launch with a bang generate excitement
• Keep it high touch, high recognition in your
  face
• Keep it flexible to to meet changing business
  objectives and employee culture
• Mix it up, Keep it Fresh- with long term and
  short term spiffs

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Promotion and Communication

• How?
• Launch meeting teasers
• Direct mail-out
• On-line toolset usage e mails, on-line
  registration, home page review
• One on one meetings with reps or managers
• Newsletters

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• I think from a company standpoint we have
  benefited, because
• with the cash rewards we were basically paying
  salespeople
• based on the business we already had. Our
  merchandise reward
• program forces them to increase volume so they
  come in the
• upper tier percent-wise. They are getting more
  than they used to
• and the company is getting the new business we
  are after.
• Ron Orr, Head of Business Development, Graves
  Menu Maker Foods, As quoted in Incentive
  Magazines 2005 Merchandise Report

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Program Design and Database Management

• Typical Challenges
• Not integrated with overall business strategy
• Non-realistic targeting
• Complicated rule structures
• Conflict with best practices
• Lack of management commitment
• Not seen as fair or attainable by participants
• Focus on Rewards vs. Results

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Rule Structure Development

• What needs to be done ?
• What actions will help accomplish objective ?
  
• Who must take actions ?
• What will it take to motivate action ?
• How do we communicate with employee ?
• How do we measure performance ?

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Participant Motivation Levels
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Reward Recognition Funding
Recognition 0.75 - 2 of salary
Reward 2 10 of salary
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A National Survey of 663 Performance Reward
Plans showed a median R.O.I. of 134, a 2.34 gain
for each 1.00 spent
Alternative Reward Strategies 2004
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Program Administration and Measurement

• Typical Challenges
• Capturing accurate participant demographic info
• Performance data not available
• Incorrect email addresses
• Lack of follow through on program effectiveness,
  use ROI for business planning vs. analysis

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Program Administration and Measurement

• Solution Ideas
• Require participants to self enroll, and validate
  data on a monthly/quarterly basis
• Establish rule structure and program measurement
  based on what performance data that is available
• Have participants own tracking performance, and
  providing back-up for X audit of all claims
• Establish objective measures, and provide regular
  feedback on progress
• Provide participants with additional points for
  keeping email address updated
• Build ROI schedule into overall program plan,
  assess effectiveness of initiative on a regular
  basis, and adapt to meet changing business
  objectives and employee culture

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82 of employees say the most important feature
or an incentive program is their ability to
choose what they want Synovate Employee
Survey March 2004Tangible incentives
dramatically increase works performance by an
average of 22 SITE Foundation 2003
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Rewards

• Typical Challenges
• Cash BAD! Easily forgotten, entitlement,
  treated like compensation, not guilt free in its
  spending
• Lack of Choice each reward earner has unique
  tastes
• Rewards not motivational for reward earner
  audience
• Timelines to receive too long diminishes
  excitement/reinforcement
• Too much administration/forms to get it
• Not in control of the redemption process
• Unclear support for warranties/customer
  service/repairs
• No trophy value or aspiration attachment

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Rewards

• Solution Ideas
• Rewards must be Memorable, Motivating, and
  Meaningful
• Rewards must offer choice and flexibility to
  appeal to a diverse audience
• Rewards must be immediate
• Rewards should be accompanied by communication
  reinforcement of the achieved performance
  objective
• Establish objective measures, and provide regular
  feedback on progress
• Provide participants with additional points for
  keeping email address updated
• Build ROI schedule into overall program plan,
  assess effectiveness of initiative on a regular
  basis, and adapt to meet changing business
  objectives and employee culture

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Rewards

• Options
• Catalogues travel, merchandise, and
  entertainment options
• Full Choice Stored Value cards ie. American
  Express Reward card
• Travel individual or group incentive
• Gift certificates
• Cash- Corporate Gift Cheques

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Fulfillment

• Options
• DIY to Full- Service Fulfillment variations
• Catalogues merchandise is fulfilled by
  manufacturers rep, or, full service incentive
  company Turn-around 2 days 6 weeks.
• Stored Value cards ie. American Express Reward
  card Turn-around time is real time or 3-5
  days.
• Gift certificates bulk shipped or individually
  fulfilled
• Cash- Corporate Gift Cheques- bulk shipped or
  individually fulfilled
• Potential Challenges waiting for reward,
  customer service inquiries, damages, returns

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QA

• Thank you for your participation
• in todays session.