Workers of the world, unite. Incentives aren”t just for salespeople anymore.
Once used exclusively to inspire the favored-son sales staff, employee motivation programs are now being adapted to inspire members of just about any department in the company.
Spending on employee incentives totals more than $3.6 billion annually, according to the Incentive Marketing Association, Naperville, IL. And although the current recession certainly has curtailed such standard executive perks as bonuses and trips, it hasn”t reduced the need to keep employees motivated — in fact, the exact opposite may be true.
For a few years, the dot-com Gold Rush made signing bonuses and stock options de rigueur as “recruitment and retention were the big issues,” says Karen Renk, the IMA”s executive director. “Now, it”s a different environment. The keys are morale and illustrating the viability of the organization to all employees.”
And the emphasis is firmly on all. With so many companies downsizing staff and freezing salaries, employers must find unique ways to keep their charges in their chairs. “A lot of corporations are trying to get a handle on what”s going on within their own environment,” says Darryl Hutson, ceo of American Express Incentive Services, St. Louis.
Delray Beach, CA-based cataloger and retailer Levenger thinks it does, which is why the company acknowledges the efforts of employees with daily cash incentives for each department. Rewards for both sales and customer care representatives are based on the number of calls they handle per hour, and can add up to as much as $4 more per hour in the paycheck. The offer extends into the warehouse, where workers earn up to $3 more an hour based on their productivity.
“We can”t just keep raising salaries, because there”s a ceiling to how much we can pay,” says vp-human resources and development Vince Dunn. “But we still want to recognize their efforts.” The costs are offset by the increased productivity, which eliminates the need for additional personnel, he adds.
Levenger also runs a more impromptu program that encourages managers to carry $10 gift cards they can use to immediately reward employees doing something above and beyond the call of duty. “Executives can wait until the end of the year for their bonus,” says Dunn. “But at the employee level, they want it now.”
Good as Gold
Oak Brook, IL-based McDonald”s Corp. has been running motivation programs that recognize the best employees and crews for years. But the fast-feeder upped the ante last year by staging a global competition to select the 400 staffers who would work the company”s operation at the 2002 Winter Olympics in Salt Lake City (December 2001 PROMO).
Restaurant managers nominated worker crews based on “service, speed, accuracy, personality, and teamwork.” About 1.3 million initial nominees were assessed by judges, who whittled down contestants through local, regional, and national competitions. Crews from 121 different countries participated.
“Our original plan was just to send them to Salt Lake City to enjoy the games,” says John Lewicki, the chain”s senior director of sports marketing. “But the winners themselves said, ‘There”s a McDonald”s in the Olympic Village, right? If we”re the best, we should work there.’” So the crew was divided in two shifts, each of which worked one week and enjoyed the Games for the other. McDonald”s lauded the crews in TV spots and print ads.
Special incentives like that are hard to top, which is why McDonald”s is considering developing a program with marketing partner Walt Disney Co. or creating a way of leveraging its Olympics sponsorship in off years, Lewicki says.
Irvine, CA-based QSR rival Taco Bell understands that as well, which is why the chain last year held a contest that awarded the manager with the best customer-satisfaction record an appearance on Fox TV”s Murder in Small Town X. (The walk-on role was part of an overall sponsorship package for the series that included a scene shot in a Taco Bell.)
Communications equipment manufacturer Diebold, North Canton, OH, has run a company-wide program since 1999 that began with four categories of prizes and now boasts 20. (Power tools, anyone?) The points-based program (developed and administered by USMotivation, Atlanta) lets employees track and redeem awards online — a capability sweeping the industry and, because of its low cost and high efficiency, is helping it grow.
Diebold has distributed $800,000 worth of total points, and redeems about $25,000 in prizes per month.
The program”s flexibility allows for just about any employee action to be rewarded. One facility manager at an office with limited parking space even began awarding workers who car-pool.
For years, GE Financial Assurance, Stamford, CT, limited its recognition efforts to the executive ranks. Last year, it created a travel incentive program (with USMotivation) for everyone.
All employees receive entry forms via e-mail and can nominate any co-worker. Criteria for selection include customer care, competitiveness, quality of work, and effectiveness in driving e-business (a stated corporate goal). Company president Michael Fraizer sent personalized e-mails congratulating the winners, who were taken on a trip to Switzerland. The program cost half as much as previous efforts even though twice as many employees participated.
What”s Hot, What”s Not
As corporate budgets tighten, companies are finding ways to provide less-expensive pats on the back — and that”s a good thing. “Good programs are layered,” says IMA”s Renk. “They offer public recognition as well as tangible wow-I-got-this-because-I-made-my-goals products.”
Peer-to-peer programs are catching on as well. “It”s one thing for management to say something, but to be recognized by peers is very powerful,” says American Express” Hutson.
But don”t think that only platitudes will suffice, experts say. “The business is changing from emblematic to lifestyle,” says Alisa Schafer, director of planning at Chicago-based incentive agency Hinda. “People don”t want just a plaque with their name on it anymore.”
“Five years ago, products were mostly desk-related,” says Richard Baron, vp at promotional products shop InSight, Lancaster, PA. “Today, employees are on the move, whether that means on the road or working from home. They want items that fit the lifestyle like cell phones and high-tech electronics.”
Offering choices has become more common. “We gave cash before and it really took some work to get employees beyond that mentality,” says Diebold marketing services manager Jerry Bryan. “It”s very powerful when you ultimately put the choice in the hands of employees.”
According to IMA surveys, about 71 percent of companies are using merchandise as rewards while 29 percent opt for gift certificates. One of the hottest high-end motivation prizes right now is Chrysler”s PT Cruiser, adds Renk.
American Car Care Centers, Blutherville, MD, is a network of more than 960 individually owned franchises selling tires and auto parts. Looking to inspire people who technically aren”t employees, the company hired American Express to provide a gift-card campaign called AmeriCash.
Franchise owners are required to take a written test about their businesses to enroll, then submit monthly invoices on the products they”ve sold. Participants earn 10 percent of every sale, with the amounts stored on cards for redemption at the franchisee”s discretion. (The cards have the same usage footprint as the AmEx credit card.)
“We wanted to get away from writing checks or giving cash as incentives. A lot of the time that just ends up in the bank paying bills,” says Dave Crawford, American Car Care”s director of marketing. “We want them to go out and buy a big screen TV, so that every time their friends come over they can take pride in how they got it.”
One franchise owner who is also a horseracing enthusiast stored up enough points to buy a horse trailer and a barn. He even named one of his horses “AmeriCash.”
Now that”s a motivated employee.
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