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Strategic Recognition and Incentive Systems

Incentive and recognition programs are shifting and the pendulum is more of a strategic approach towards culture, behavior, and measurement with a focus on a return on investment. Using technology, Customer Relation Management (CRMs) can give us leading indicators on all data and form the metrics to make decisions. Understanding these metrics gives us specific information on the marketplace, the client and how to tailor towards your demographics. This real-time information now changes the landscape on incentive programs and shifts from one goal—service award programs—to an umbrella approach that encompasses the entire organization in various initiatives; a process called Strategic Recognition Systems.

Incentive programs exist throughout an organization to enhance the culture and drive employee behavior towards a demonstrated return (i.e. customer satisfaction, enhanced client loyalty, streamlined processes or increased revenue). Every employee plays a role, and every employee should benefit from the recognition and incentive processes. The Forum for People Performance Management and Measurement’s current research states that properly constructed incentive programs can increase performance by as much as 44 percent.

Elevating Culture is non-measureable on paper but is the heart of any organization. The culture involves the vision level and expectations of the organization and the engagement of management and employees. Elevate the entire organization through constant communications of the company’s vision and managers’ engagement to elevate the employee’s morale. Communication of achievement throughout all levels of the organization is critical and must be endorsed by senior management.

Behaviors involve the day-to-day actions taken to improve personal and team performance. Establish goals and measurements focusing on the correct habits, education, and team synergy.

Behaviors must be recognized upon the completion of their good deeds to have them multiply.

Measurement, or Return on Investment (ROI), is the ultimate test in measuring the success or failure of a performance-incentive strategy. This return on investment is stated as a ration measuring the incremental increase in benefit divided by the amount invested to secure the increase. Measurements can indicate individual performance, wellness, safety, innovative thinking, customer satisfaction, and any initiative that complements the overall growth strategy of the organization. What gest measured gets done and what gets celebrated gets done well.

Recognition is Most Effective with a Comprehensive Approach

Phase One: Brand Equity

The branding of the incentive program should clarify the business needs and identify the needs and requirements through initial marketing, setting the platform for success and creating the excitement to excel. This is an internal “Branding” of the organization’s vision, creativity, and commitment. For example, FedEx makes the “Purple Promise”—a branding of above and beyond service. Ingersoll Rand shows “Inspiring Progress” as staying one step ahead and encouraging others to do the same. By “Turning the phrase into action,” every employee has the opportunity to build the brand.

Phase Two: Incentive Performance Program. Cash vs. Tangible Awards

Cash—Case can be viewed as an entitlement with little emotional involvement and does not provide lasting satisfaction. Wirthlin Worldwide Research studies demonstrated 47 percent of employees that received cash either paid bills or do not remember how they spent their incentive. Only nine percent spent the monetary incentive on personal use.

Tangible Awards—World at Work (formerly American Compensation Association) found that non-cash awards achieve three-times the return on investment compared to cash. Tangible awards are extrinsic and intrinsic motivators and provide a strong emotional appeal to recipient’s personal wants and needs, having the family involved in the selection multiplies that emotional value. Point-based programs, similar to frequent flyer miles, are very popular, designed to reward employees for excellence everyday and are universally accepted.

Phase Three: Honor Clubs

Honor Clubs recognize benchmarks of achievement that acknowledge cumulative success and provide an incentive for future triumphs. This is a symbolic award that holds strong intrinsic value that cannot be measured. It is the reason that financially independent athletes with create careers continue to play. They want to earn the most prestigious symbol in athletics (the gold medal or the championship ring). In business this would be the Chairman’s award. Have levels to recognize your employees, a career path of recognition from onboarding to the every recognition touch point, all archived in one platform. A symbol of achievement serves as an encouragement for others to follow. A well thought out symbolic recognition program pays for itself in employee loyalty and retention.

Most of us have spent our professional career putting band-aids on incentive and recognition programs and not embracing an approach of communication, measurement, training, and reinforcement. While employees bask in the glory of recognition, it is the organization that reaps true benefits. Richard Bolton, author of “The Value Code,” states, “Celebration makes the spirit of the organization visible.” If we are going to improve corporate culture in the long term, we need to address the issues and solve the problems in a symmetrical process.

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