Once viewed as yet another way to improve attraction and retention, rewards strategies are now seen as an integral part of businesses’ overall success. Lynnette Hoffman reports on some of the latest developments and examines how organisations are putting these into practice
Once viewed as yet another way to improve attraction and retention, rewards strategies are now seen as an integral part of businesses’ overall success. Lynnette Hoffman reports on some of the latest developments and examines how organisations are putting these into practice
Traditionally, many organisations have rewarded sales but neglected other facets of their companies. But that’s starting to change as an increasing number of companies choose to reward employees who not only boost the bottom line, but value add in other ways. They’re looking at the way individuals mirror corporate values, what they add to the business, and how their behaviours contribute to the customer’s experience. As the focus expands from being purely a numbers game, organisations are finding they need to build customised reward strategies that work specifically within their own goals and culture; what works brilliantly for one organisation may not work for another.
Incentives as business solution at Ergon Energy
For years Ergon Energy’s call centre handled both inbound service calls and outbound sales calls, so when executives decided to outsource the sales to a new vendor and allow its call centre to concentrate on service 18 months ago, they worried they might lose possible sales opportunities in the process.
“We expected that we were going to lose 30 to 40 per cent of our sales if we didn’t do something,”Ergon Energy business marketing manager James Bonwick says.
Instead, the electricity company teamed with an outside provider to develop a point-based incentive program for referrals that result in a sale.
If a customer calls with a billing enquiry, the employee who answers the phone will help with their request, and possibly also ask the caller if they are interested in one of Ergon’s other related products or services – if the response is positive they’ll then refer the caller on to the sales centre. And if the end result is a sale the employee who made the referral receives points which can be accumulated and redeemed to purchase anything from a refrigerator to a portable phone.
The results have been better than expected. The company has exceeded it targets for the sale of ‘green energy’ and is now working to expand its incentive program, including rewarding those call centre employees with better conversion rates to help cut down on nuisance calls to the sales centre.
“ROI was not something we sat back and looked at. It’s a variable cost – we didn’t invest huge amounts of money, but we review the program on a month by month basis and it’s paying for itself,” Bonwick says.
Building the business case for Ergon’s program was simpler than it often is for other organisations because the incentives only kick in once a sale is made. “We developed a sustainable program that’s built on sales so it’s self funded,” Bonwick says. “The investment was small and didn’t require we invest the time in creating a complicated business case.“
Ultimately though, the key to stakeholder support was the fact that the day to day administration of the program could be almost entirely outsourced, Bonwick says. All the back-office work is supported: “Right now we spend one resource day a month on it,” he says.
The software produces FTP reports and team leaders get regular reports detailing who the “star performers are and who’s struggling,” providing added value, he says. “This allows us to benchmark people against each other and drive out behaviour.”
Rewarding the softer side at Foxtel
As organisations realise the myriad of factors that contribute to their growth and success, they’re becoming increasingly likely to use incentive and recognition strategies to develop and reward “softer” skills and behaviours that may require more diligence to accurately measure than do sales results.
Earlier this month Foxtel launched a revamped rewards program in its Melbourne Mooney Ponds office that differs markedly from its former sales-focused, ad hoc approach.
“We developed a consistent, unified approach that rewards passion, commitment and enthusiasm,” Foxtel head of human resources Belinda McPhee says. “We wanted to drive and recognise exceptional customer advocacy, people who emulate Foxtel’s corporate values and reward business improvement and innovation.”
The idea is to “transform values” and “encourage people to add value and drive to the customer’s experience.” By recognising and rewarding people who make headway in the three key areas, McPhee says Foxtel is also providing a clear picture “so staff can see what success looks like”.
The program uses a special web site linked to the company’s intranet to allow staff to nominate people based on their performance and key behaviours in any of the three areas. But because the program is hinged on values and ideals that are more subjective and often more difficult to accurately measure than sales results, unveiling it required an extensive amount of communication and work.
“The challenge is to ensure the integrity of the process,” McPhee says. To do that she and a team of key stakeholders worked for six weeks to clearly articulate and define which types of behaviours should be rewarded and how to differentiate between ‘very good’and ‘exceptional’, listing extensive examples of exactly what behaviours would be classified as ‘exceptional’ as opposed to which ones would constitute ‘very good’.
“We’ve developed very well defined, clearly articulated criteria,” she says. “Nominations are made on the recommendation of team members and peers – but management can decline or approve so there’s a mechanism of consistency and it’s not just a popularity contest.”
One of the biggest challenges with any rewards program is creating awareness within staff and management, not only that the program exists, but how to actually use it effectively and why it’s important as well.
Foxtel developed a comprehensive strategy, launching the program with a series of seminars, providing work booklets with further information and building a site specifically for the program linked into the company’s intranet. In the first week since the program launched there were 108 nominations, and more than 1,400 hits on the web site.
Getting the most from your reward strategy: Unisys’ experience
Unisys has long had reward strategies in place, but in recent years the international information technology company has been gradually revising its policies in an effort to maximise the impact of the money it spends, says Rick Watt, head of global rewards at Unisys.
One of the ways the company is doing that is by ensuring that recognition goes hand in hand with rewards.
Unisys’s global rewards and recognition program features a number of components that highlight this. For instance, when someone does something note-worthy, employees can send a thank you note through a specialised online program that triggers a whole chain of events so that managers are aware it’s been sent.
Rather than using a point-based incentive program where staff can choose from a catalogue of prizes, Unisys uses financial incentives which Watt says are easier to administer and more effective for a company that has operations in more than 100 countries. “We provide monetary awards for those who value-add beyond the scope of the role and provide ROI for customers,” Watt says.
But, he says, just doling the money out on its own is not enough; by proactively recognising the people who’ve gone above and beyond their roles and been nominated for and selected for awards, other staff can see their value and identify with those people.
“A lot of the financial stuff happens behind the scenes,” Watt says. “If you’re nominated and selected for an award and you receive it one month later and it just goes over the payroll system and people don’t actively recognise you, it’s not going to be as effective.”
“In the last 12 months we’ve tried to identify recipients at organisation gatherings and recognise those people,” Watt says. Often award recipients are featured in internal magazine articles as well.
“We know that we have a lot of employees who do put extra effort in, and if we don’t recognise them it becomes almost that that’s what we expect.”
Equally, Watt says getting the rewards and certificates out in a timely matter also improves effectiveness. And he says one of the gaps in the program that he is working to rectify is that the current reward strategy only recognises the ultra high achievers who are going above and beyond what’s expected in their role; there’s nothing at all to recognise or reward people who are doing a very good job doing what they should be doing within their role without extending themselves out beyond it.
“We’re looking at ways to provide immediate recognition to empower people,” he says. That’s likely to take the form of not only a token certificate, but also things like dinner for two or movie tickets. Staff will likely be given a sum of money, $150 or less, for those sorts of rewards, but Watt says they’re still refining the details.
“We’re looking at whether to use financial reimbursement through an expense scheme that can be tracked through taxation, or a debit card, or whether to process it through payroll – but there’s a concern that a lower value of money can sometimes get lost,”Watt says. In other words if an extra $50 or $100 is added to an employee’s payroll one week, they might not take much notice and may not even remember exactly what it was for.
That’s why more instantaneous recognition is so important, he says.
“We measure progress at a global and regional level – we operate in more than 100 countries and what we’ve found are that the countries that provide a greater number of rewards have more success, both in terms of profit and customer feedback,”Watt says.
“If you don’t recognise the achievers you lose them, and what you end up with is mediocrity.”
