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Mad About Incentives: Incentive Programs—the Stepchild of the Employee Performance Improvement Industry
January 23, 2009
By Ley Borlo
The Employee Performance Puzzle…
If you Google "improve employee performance" you will find hundreds of thousands of interesting approaches and options. Everyone seems to have an answer…from training to better communications, research, consulting, new appraisal software, different measurement, 10-step management guides, performance assessments or surveys and reviews, etc…
While most companies that provide these various solutions have valid methods of improving performance, rarely do you see any of them recommend that you close the loop of performance improvement by rewarding your employees for results. Award programs just seem to be born out of trial and error, the natural progression after other solutions haven't produced the desired result. Most companies think they know all the pieces of the employee performance improvement puzzle. They've spent millions on the separate pieces but have they determined the best way to group the pieces to affect the best result?
Award Systems Can Drive Performance
Employee engagement is the big challenge today. Corporations have fewer dollars to spend and are constantly striving to improve performance. Over the last few years, there have been many articles written on employee recognition as a viable way to improve performance. Studies have shown that recognition is a key element in employee satisfaction, and employee satisfaction is a key element in employee performance. Satisfied employees drive customer satisfaction and improved bottom line results. If it's that simple, why don't more companies include award systems to motivate and recognize their employees for improved performance?
Other studies have stated that when incentive/awards programs are implemented correctly, individual performance improves by 22 percent. They also found that when there was both an individual as well as a team component that individual performance improves by 27 percent and team performance improves by 45 percent! Of course the essential point here is "implemented correctly."
Do Recognition Programs Motivate the Majority?
Do employee recognition programs really drive the performance of the majority of your employees? Or do they merely recognize and reward those employees who work above and beyond the norm? If you want improved performance should you structure a simple recognition program that allows peers and front line managers to say thanks with a periodic reward? Or should you design a program that has real objectives, communications, measurement and feedback mechanisms with an appropriate award system to drive the performance?
What Incentive Award Company to Use?
The results of the above study did not surprise some of us in the incentive industry. The full service performance improvement incentive companies have seen these outcomes for years. In fact they have seen results far greater than these. If you could search through the archives of successful incentive companies you would find literally hundreds of unbelievably successful programs. Unfortunately for a myriad of reasons, not the least of which are proprietary information and confidentiality, these findings rarely reach the eyes of people in their own companies, much less the industry in general. And that's a shame.
You Own the Tools
The tools to change employee behavior and improve performance are already in your hands. It is often not much more complex than telling your employees what you want them to do, teaching them how to do it, measuring their performance, telling them how they did and then positively reinforcing them for their results. If you want to look to the incentive industry for the expertise to help you construct and implement a program that will drive results, not just recognize the performance of a few, seek out the professionals who have done this for years. If done correctly you will drive the results you want.
Ley Borlo is a partner at Incentives, Inc., a full service incentive company (www.incentivesinc.com). In over 35 years in the industry, he has achieved success in sales, sales management and corporate management with a leading incentive company. He founded Incentives Midwest LLC, a consultancy to educate companies on the vagaries of the award side of the business. Ley writes a bi-monthly column on the incentive industry from the perspective of someone who has purchased, sold and managed those who have sold full serve incentive programs. His views are interesting, if not provocative. Other topics he has written on the industry can be found on his blog, www.yourbabysugly.com.
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