Don't Fix Your Broken Incentive Program

Incentive and recognition programs are fairly prevalent in the workforce today, as well they should be, they have been used to improve the quantity and quality of work pretty much since the early days of organized labor.

As with anything, you have a continuum of success with the employee recognition programs. You have programs that generate gains beyond your wildest dreams and programs that result in limited or no productivity/sales gains. The not so successful ones were, in most cases, effective at one time, but have either grown stale or did not keep up with the changing business. It is this latter group of incentive programs that I am going to focus on "" DON"T "FIX" THEM!

The business environment is changing more rapidly than ever before. At the same time, our workforce is made up of more and more creative and free thinking individuals. These two factors, among others, demand that we not implement static incentive programs and leave them alone for years at a time, only "fixing" them when it is apparent they have almost totally lost their effectiveness. Instead, we need to constantly monitor our programs for tweaks and changes each quarter "" at a minimum. Basically, we need to quit thinking like engineers and instead think of ourselves as gardeners, yes gardeners.

When we think of ourselves as engineers, or mechanics even, we are basically saying our incentive program is a machine. It needs to be created and left alone to hum along until it breaks or no longer generates the desired outcomes. Instead, we need to think of our incentive program as a garden that needs constant tending. You don"t start paying attention to your garden once you notice things are no longer growing. You identify problems way in advance. With this constant tending of the garden you identify trends such as, "the tomatoes were larger this time last year", and you immediately go about doing what you can to get them up to last year"s level. Long story short, what helped things grow last summer, might not work this summer and the sooner you identify that and change course the better.

The best way to implement this gardening strategy with your incentive program is to assign someone to manage or "own" the incentive program. It does not have to be this individual"s full-time job, but it does have to be a priority for them. They also need to be given the proper tools to do this job.

1. Strong knowledge of "the goal" of the incentive program "" Many times businesses lose focus on the true goal of the incentive program. For instance, a mortgage originator incentive program may be based on closed loans. As a result, one might come to think that as long as the program increases the number of closed loans, it is being effective, when in fact this might not be true. You see the ultimate goal of the program is really to increase company income. Understanding the true goal of the program, will help a program owner dig deeper into the program"s results and adjust accordingly. Take the following example:

By tending the program on a regular basis, the program owner comes to realize that this year more loan applications are being submitted to achieve the same number of closed loans. As a result, it is costing the company more to originate the same number of loans as last year. Thus, the decision is made to add a pull-thru or closing percentage component to the mortgage originator"s goals.

The need for this type of adjustment might go unnoticed without someone focused on the true goal of the program.

2. Access to the data tied to the incentives paid and the results generated "" Without these two pieces of information, proper analysis cannot be performed. With this in hand, the proper analysis can take place on a regular basis to determine if "the garden needs tending". As you might expect, this is tied very closely to understanding of the goal (see #1 above) in order to ensure the right data is being gathered.

3. The authority to change the program "" Maybe the owner does not have ultimate authority "" especially if the change involves an increased budget, but they will need, at a minimum, the authority to recommend change and a forum with the proper budget owners, to recommend these changes.

4. A strong communication strategy "" The last thing you want is your program changing and none of the participants knowing about or understanding the change. To solve this you need a strong communication strategy associated with each and every change. Once you get your participant community conditioned to look for changes, this can be as simple as an e-mail campaign that links back to your loyalty program"s intranet site.

5. Patience "" As with a garden, you can also tinker and tweak things too much. While you definitely need to monitor progress and change things accordingly, you also need to allow changes in the program enough time to take root and not constantly change the program. Make sure you are not overreacting to an abnormality or just changing for changes sake.

We at LoyalNation are firm believers that implementing an incentive/loyalty program is not a "one and done" type exercise. Our platform provides you with the data you need to perform the proper analysis, along with the flexibility to change things quickly. Moreover, the Social Networking capabilities can further enhance your program"s communication plan.

Let us help you grow your incentive/loyalty garden so it produces lots of "green" and keeps you from being "squashed" by the competition.