Throughout my blog series sharing best practices in employee engagement, I’ve explored everything from communications to gifting to teambuilding. In the final blog post of this series, I will focus solely on the number one most effective strategy for employee engagement: incentive programs.
While I always recommend that engagement practices be used to complement and enhance each other (that is, implementing just one strategy won’t be as effective as multiple strategies), if you only have the bandwidth or budget for one, your time and money will be best spent on this final best practice.
In Case You Missed It – Best Practices in Employee Engagement: Part 2
Best Practice 10: Implement an Incentive Program
An incentive program is what it sounds like: a program that incentivizes employee performance and engagement by offering rewards based on preestablished goals and criteria. While exciting and motivating for program participants, such programs also bring impactful business benefits, including increased profitability, reduced employee turnover, and greater productivity.
Incentive programs come in all shapes and sizes. Some follow simple “do this, get that” directives while others have complex strategies with multiple levels of contests for various job types. No matter the scope, in order to be successful, the program must be well researched, budgeted so that it pays for itself, and well communicated.
Executive management must play a key role not only in building the program but also in ensuring managers are actively participating and driving engagement to their employees. This key idea boils down to three basic principles:
- Tell them what you want them to do.
- Tell them what’s in it for them.
- Tell them often.
Aside from a lack of communication, the biggest mistakes I see are campaigns where the rules are too convoluted and/or where the success is so unattainable it actually acts as a deterrent to the target audience’s efforts. When in doubt, keep it simple.
How to Build an Incentive Campaign
Depending on the complexity of your program, it may save you time and money to use a third-party management company to create and execute your incentive strategy. At M&IW, our incentive experts offer a no-obligation consultation to help you map out the steps and costs of building a new incentive campaign.
Whether you’re planning to establish the campaign on your own or want some background knowledge before meeting with a management company like M&IW, here are five key components every incentive program should include.
1. Rules Structure
Simply stated, there is nothing more critical to your program’s success than the rules structure. Whether you have one job type participating or ten, the incentive needs to be customized to allow everyone a chance to succeed. Create measurements that are both attainable for the participants and beneficial to your company.
Additionally, many companies focus only on sales incentives, which can leave those outside of sales feeling unappreciated or less important. The best incentive programs allow all employees to participate either by customizing target goals by job type. Another option is to establish goals that are unrelated to job performance but still have personal or professional benefits, such as completing an annual physical or attending a certain number of industry webinars.
2. Communications and Performance Tracking
This is an area where many well-intentioned programs flounder. As stated above, the incentive needs to be top of mind throughout the length of the program. One way to do this is with a dedicated program website with live leaderboards or performance measurements. Not only can participants check their performance in real time, but you can also include information about the reward for extra motivation. Be sure to add the qualification criteria and program rules for easy reference. The downside of this is that without a comprehensive incentive platform (see #5 below), updating leaderboards or current performance is both labor intensive and time consuming.
An email campaign with regularly scheduled emails to all participants is another effective way to communicate. For programs with leaderboards, they can be included directly in the email. You can also add a link to an external site. As with a website, the email can also include motivational content; for example, if the reward is a group trip, share a video highlighting the destination, or if winners can choose from a variety of gift bundles, give a sneak peek at one of the bundles or perhaps just one item from each bundle.
The reward is the incentive, the motivating factor, so make sure participants know what they’re working toward. Whatever incentive you design, the reward must be commensurate with the level of difficulty in meeting the program goals. Some companies focus on merchandise, some focus on group travel (e.g., President’s Club trips), and still others reward achievers with company swag.
If you’re struggling with deciding on what reward to offer or how to handle the reward logistics, it’s in your best interest to partner with an incentive management company like M&IW. In fact, we can manage all the above rewards and then some! How about offering rewards like individual travel experiences, retail gift cards to give recipients greater choice over their prize, or experiential rewards such as fine dining, sports or theater tickets, or spa getaways?
Incentives, rewards, and recognition—when it comes to employee engagement, these three words should be synonymous with each other. A reward is required for a successful incentive campaign, but many organizations overlook recognition, which is a powerful motivator. While a shout-out during a team meeting is nice, being recognized company-wide is better. This can be done during a town hall or all-hands meeting, in a company-wide email or newsletter, or, if your incentive program includes an online platform, through that platform.
Recognition shouldn’t be limited to the confines of the incentive program, either. While stellar performance shouldn’t go unnoticed, neither should milestones like employee onboarding, promotions, birthdays, and work anniversaries.
5. Online Incentive Platform
I’ve teased it a few times, and it’s finally time to share the secret to incentive success: an online platform. Built to include all of the above incentive program elements in one simple and convenient system, these platforms can vary in size and scope. They could be a one-time reward where employees can choose from a limited selection of available gifts, or they could be an ongoing program where employees earn points and can redeem them for a variety of rewards worth various numbers of points.
Once reserved for large companies with equally large budgets, such platforms are within reach for organizations of all sizes thanks to M&IW’s new platform called EPIC, which stands for Engagement, Performance, Inspiration, Collaboration. It is a robust, scalable, and, most importantly, affordable performance engagement technology. It can be customized to meet your needs (read: you only pay for what you need), and it includes communications, performance tracking, gamification, message boards, reward redemption including both merchandise and gift cards, and more. Contact us to learn more about our newest solution.
How to Budget for an Incentive Program
At this point, you may be asking yourself how to create an effective budget for a new incentive program. The budget needs to cover all aspects of the program, including communications, technical needs, and rewards. While there is no one-size-fits-all answer, current studies show that companies with successful programs budget an average of 0.75% of an internal sales or office personnel’s salary and 2% of a full-time sales employee’s salary.
That being said, the effectiveness does not necessarily lie in the monetary value but in the personalization of the reward, the timeliness of the recognition, and the sincerity of the giver. If you’re not sure where to start, M&IW’s incentives and engagement experts are here to help.
Investing in Incentives
Questions about how an incentive program can help boost employee engagement (and your bottom line)? Ready to invest in incentives and transform your workplace? Contact us today to get started! Already an M&IW customer? Contact your Customer Success Manager to learn more.
Business Development Director, Sales & Marketing
Meetings & Incentives Worldwide, Inc.