The following is an extract from an article by Paul Herbert which I came across recently. I think it contains some great points.
“Many incentive programs, especially for sales organisations, are designed to reward performance at the end of 12 months. Hit your annual sales goal and get your bonus; or hit your annual sales goal and get a trip to Elbonia. Or in the worst possible situations – hit your goal after a year and then we’ll rank everyone and only take those in the top 10%.
A program with a single, long-term goal is probably a bad idea. Incentives should be short term, focused on specific behaviors and removed once the new behaviors are regularly demonstrated to be better than the old behaviors.
You should eliminate your annual program because:
- People perform better and are more engaged in their work when they see progress. When people achieve milestones along the way toward a greater goal they work harder. Therefore, the annual goal program is less effective than it could be.
- Most annual programs do a lousy job of communicating progress effectively.
In the first case – the human brain isn’t very good with time. Rewards in the future have much less value than rewards much closer in time. We place greater value on things that happen sooner. Measuring small victories and incremental achievements drives greater engagement with the task. Put the achievement and the reward too far into the future and it loses meaning – or has a lot less meaning than something more urgent on our to-do list.
And secondly, most programs don’t report progress very well. What activities brought you to that level? You’re not sure – and the program doesn’t know since it’s only measuring sales to date and comparing that to the total goal.
Reward people and their behavior on a regular basis”.
I agree with the comments above.
Brownie Points reward and recognition programs are designed to help organisations change the behaviour of their staff by inspiring, engaging and motivating them. Yes, an employee of the year, or franchise business or team of the year may be good, but in our experience, small, frequent or incremental rewards are far more appealing and likely to be more effective.
Setting KPIs that are measurable is important to success and will allow all parties to monitor changes in behaviour, while enabling the business to measure its return on investment.
Finally, in our experience, the “recognition” reporting should be close to real time, and a system should be in place so that the recognition of the behaviour is registered as soon as possible, and the recipient notified accordingly. That way the greatest impact to the business and the individual is realised.
For more information on how we can help engage your staff, call us on 03 9909 7411 or email the team at firstname.lastname@example.org