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Best practices for reward and recognition
February 9, 2005
Scott Schwartz
Madison Performance Group
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Reward and recognition programs in corporate America are often as different as the corporations that use them. Different firms have different cultures, different objectives, and different tools at their disposal. So what can you learn from studying other companies’ R&R programs? It turns out you can learn quite a bit. The most successful programs keep a number of factors in mind when designing and deploying their campaigns, and you can use them as well to maximize the investment you’re making in time, money, and effort.

Work your communications budget smarter, not harder

Many programs are launched with a big, beautiful, full-color brochure or poster, and then for the rest of the campaign there is nothing. Splashy print pieces are great but ultimately end up in a stack of papers on a desk. To stay top of mind with participants, communications need to be frequent. Fortunately, there are numerous cost-effective options for communicating with your audience.

First and foremost, if your program isn’t on the Web yet, it ought to be. Once your site is up and running, changing content on your site is fast and easy, and far less costly than updating your participants via paper. You have the opportunity to brand your site with the values and goals you want to focus on. Once built, a web site can be more than just a place to check standings in a contest. It can also serve as a news source, a resource center, a town hall for discussions and suggestions, and a showcase for your stars, so that others can learn from their success.

E-mail may seem like a no-brainer, but sometimes a tool so ubiquitous is easy to overlook. Regular email updates are virtually free and essential to staying on your participants’ radar. You can easily combine your organization’s important news, brand messages, and internal goals with a personalized progress report that communicates up to the minute how a participant is doing in a program. While it’s easy to create an attractive, graphics-rich email to your population, you should also embed a text-only version, so that the Blackberry-carrying set isn’t left out of the fun while on the road.

Text messaging (SMS) is another underutilized tool at your disposal. Virtually every cell phone made since 1998 can receive text messages, and the few carriers that do charge a customer for receiving a text message rarely charge more than a penny or two for it. For an organization whose participants spend a lot of time on the street talking to customers, this is a great, cost-effective way to encourage your participants when they’re not in front of a computer screen.

Sustaining interest year-round in your program is vital to its success. Working on keeping that interest can be accomplished quickly and cost-effectively.

Personalize goals and objectives

Look at any organization and you’ll see enormous diversity in experience and performance. Too often R&R programs will group these diverse participants into one bucket and ask them to achieve the same generalized goal. For the participants who are the most junior or need the most coaching, these goals can seem out of reach. Conversely, the top 20 percent of your group will shrug. For them there’s no goal to reach for, as they’ve likely already surpassed it or will do so easily.

Personalizing a goal down to the individual level communicates that you are interested and vested in that person’s success, and that the goal for that person will be both appropriate and achievable. When designing a program, take a participant’s tenure in the industry into account when setting a goal. While you can use last year’s numbers as a starting point for setting a goal, having several years of data is better. The more points on a trend line for a participant, the better you can predict what a reasonable goal will be. When available, use industry benchmarks to inform your goal setting as well.

Segmentation is also a key feature of successful programs. Don’t be afraid to break up your population into four or five different groups with different goals – as long as those goals are appropriate to that group’s past performance, opportunities, and universe. For example, one major automaker’s program for leasing professionals created lower targets for dealerships in the southeastern U.S. Why? Statistically, far fewer customers in that region are willing to lease vehicles and prefer to purchase cars outright for cash. Without taking this into account, many dealers would have felt disenfranchised, and that the people doing the goal-setting were out of touch with the reality they live in. With “rightsized” goals, many dealerships met or exceeded their targets.

Where geography isn’t a factor, size often is. Resellers and distributors want to be grouped with like-sized peers. Mom and pop dealers don’t want to compete with giants in the same industry. Equal comparisons engender a feeling that they are being treated fairly. Similarly, employees who are ranked against peers in their tenure or experience set will feel they are on a level playing field.

Make goals – and the rewards for meeting them -- explicit and clear

“Do this, get that.” Sounds pretty basic, right? And yet many programs fail to communicate the specific goals of a program, or, what a person can get for meeting or exceeding that goal. For low- and middle-tier performers, promote the tangible, whether its gift cheques, a debit card, or merchandise. For your top performers, it’s all about bragging rights. Public rankings allow them to crow about their achievements, a “President’s Club” trip allows them to hobnob with other elite achievers as well as the corporate brass, and making them the centerpiece of an online showcase gives them what they crave most: recognition.

Wherever possible, quantify the goal for a participant, whether it’s a market share percentage, revenue, profit, or whatever you’re measuring. Show a participant his or her progress graphically whenever possible. It can crystallize for a participant how they are doing in a way that tables of numbers can’t. Quantifying goals and a participant’s progress towards them eliminates the perception of favoritism among managers, especially in programs where winners have traditionally been nominated.

And while quantifiable goals are essential, so is keeping the formula simple. If your rule structure is too hard to understand, your participants will tune out and lose interest. Your participants should be able to immediately understand how to succeed. During your campaign design phase, float a test balloon with a small group of participants; if the majority is lost, you have the chance to go back to the drawing board before rollout.

In peer-to-peer and manager-to-peer recognition programs, where rewards are given for demonstrating values-in-action or desired behaviors, be specific about how actions relate to those values or behaviors.

If “extra effort” is a value you choose to reward, provide specific examples from the outset of what “extra effort” means. Otherwise, there will be folks who consider picking the phone up on the second ring “extra effort,” devaluing the award for the person who came in on the weekend to keep a project from missing a deadline. Web-based peer-to-programs can facilitate corporate review of the reasons people give awards, and the chance to intervene when the reasons for awards or the size of awards are inappropriate. 

Keep your field managers in the loop

Field managers are ideally supposed to be coaches, helping their charges to overcome their business challenges and produce success. But if your coaches don’t have access to performance data, they’re working blindly. When your managers can have their finger on the pulse of the individuals they can be proactive, giving more attention to the employees who need it most, while there’s still time to positively affect their performance overall and in the R&R program. Putting this data online means they have access to it whether they’re in the home office, on the road, or putting in extra hours on the weekend.

Also consider rewarding your field managers setting goals for them as well. By providing the motivation to use the data at their disposal, you’ll be inculcating a culture where they use the data to make better decisions on how they allocate their time, attention, and resources.

Consolidate: employees prefer one-stop shopping

If your organization has multiple programs running, it can be daunting for employees to navigate the maze of corporate intranets to find out how they’re performing in each promotion. By consolidating your R&R activity into a single portal, everybody wins.

Participants can use one link and one sign-on to quickly check their progress in each program they are eligible for. In addition, they can consolidate their winnings together for greater purchasing power. Corporate sponsors reap the benefits of not only lower fixed costs and consolidated reporting, making it easier for HR and compensation groups to understand the total compensation picture for employees.

When R&R programs under-perform, it’s usually due to mistakes of the head, not of the heart. In the rush to deploy a program, it can be easy to lose sight of the most important components of a successful program: transparency, clarity, and achievability. Putting these principles into practice can help ensure that you keep your participants engaged and focused on their goals.

Scott Schwartz is the Director of Strategy at Madison Performance Group, a N.Y.-based performance management consultancy serving the Fortune 1000. Madison was the first firm in its industry to develop and deploy web-based performance improvement programs.

 
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