A few months ago, I read a LinkedIn Group post regarding reward programs for front line personnel. The conclusion was that such programs were only marginally effective, at best.
At CSR, we’ve had great success with these programs for our clients. There are, however, a number of critical factors which can have a direct impact on the success (or failure) of Rewards programs.
Before I delve into some program specifics, let’s get the most important criteria for an incentive-based employee program out of the way: the program needs to be fun and worthwhile for participants. If not, it won’t work. Period.
What are Rewards-Driven Employee Development Programs?
Rewards programs, often called incentive programs, are used to promote or encourage specific actions or behaviors with rewards. These programs are often used to:
- motivate employees
- increase performance
- decrease turnover
- boost morale
In a study conducted by Randstad USA last year, incentive programs were found to be popular among employees:
According to a study by Randstad, U.S. workers are most likely to identify promotions or bonuses as one of the most effective ways to keep them engaged. In the latest Randstad Engagement Index, 36 percent of workers say this is among the most effective motivations, however, only 27 percent say their employers actually practice these types of incentives and just 28 percent say their companies have a formal system to recognize and reward employees
Because incentive programs engage agents and signal to them that the company is willing to invest in certain behaviors, the programs tend to have the positive long-term residual effect of reinforcing those agent actions.
Rewards-Driven Development Programs Must be Fair
To work properly, the program must be fair. Now, before you cue to an eye-roll and mutter “well, of course it needs to be fair,” understand that this is another do-or-die rule for rewards-driven programs… and it isn’t always followed.
Bottom line: In any program, everyone should be able to win – including both new hires and seasoned top performers. It should be an ‘open book’ program, meaning before it launches, all supervisors and participants should be notified of the specific measurement criteria. Those criteria should be based on the participant’s KPIs (Key Performance Indicators). What is sometimes overlooked in developing rewards-based programs is the role of supervisors. Supervisors should have a stake in the success of their direct reports.
Three specific actions that play a significant role in the success of Rewards-Driven Development Programs are:
1. Feedback and The “Carrot” Approach
Companies that host rewards programs but don’t provide participants any feedback are missing a big opportunity to improve morale. Providing feedback is the task of supervisors, who can use it as a motivator. At CSR, we advocate the “carrot” approach to providing positive feedback, since it can greatly improve morale. This approach works best when Supervisors are supported and encouraged from above. Common tactics include:
- hosting daily huddles to review the day’s achievements
- using the huddle time to reward winners and hand out prizes
- reviewing those skills and behaviors that are problematic for the team.
2. Reinforcement – Rewarding Positive Behavior
Rewards or incentive programs are designed to accentuate positive actions and behaviors. Care has to be taken, however, to manage the positive reinforcement process. If rewards aren’t perceived as valuable, for example, the program may be ineffective, or – at worst – it could backfire entirely.
The value of the reward should be in-line with (typically, a percentage of) the value of program’s product or service. There are a number of ways to structure the value of rewards. Here are some common guidelines:
- If the participants are given just a single chance to win, the value should be very high.
- If the participants have multiple chances to win, the value can be lower.
- If the criteria are difficult to achieve, the value of the prize should be high.
- The reward value should start at about twice the hourly pay rate of the participants.
Timing the delivery of the rewards can also impact the program’s success or failure. Don’t hold the rewards – be prepared to deliver them as quickly as possible. Rewards given significantly after the winning performance is delivered can leave a bitter taste, and won’t help drive long-term positive behavior.
A well-structured reward/reinforcement component goes a long way in driving the success of the incentive program.
3. Accountability – Consequences, But No ‘Stick’ in the Rewards Program
I referred to the carrot approach, above, but I didn’t mention the proverbial ‘stick.’ So what happens when the one skill or behavior that is absolutely essential to the agent’s performance is not present? For instance, if a sales rep does not attempt to sell, or retention reps make no attempt to retain, what happens?
Most call center supervisors have experienced situations where agents are not doing what they are paid to do. But the incentive program isn’t the right place to address the issue.
Instead, the data collected regarding the behavior should be compared to the results from other matrices in the supervisor’s or manager’s arsenal – for instance, an agent’s sell-in rate, or their Quality scores. The employee development program results should lead supervisors to privately coach agents. If the behavior is consistent across other matrixes, the agent should be held accountable and corrective action should be taken with the individual. If the same results are not consistent with other matrices, supervisors should conduct counseling sessions to determine the root cause.
Rewards programs work, but they need to be properly designed to achieve the Company’s objectives. Feedback, reinforcement and accountability are essential ingredients for a successful rewards-based employee development program.
Do you have any experiences with rewards programs? I’d love to hear your results in the comments.