Dangling the performance carrot

by 13 May 2008

R&R recognition and reward have become the catchwords for those looking to motivate and retain their staff, reports Marian Edmunds

Sales incentives are still an important factor, but HR directors and their teams are focusing more on enterprise-wide recognition and reward programs when it comes to incentives.

“Cash is no longer king when it comes to driving a lot of the behaviours that are key within the workplace,”says Carlson Marketing’s Dave Parsons.

As well as strategies and technology to implement incentive and reward systems, the changing shape of the labour market must be considered, he says.

Parsons is director of reward and recognition for Carlson Marketing in Australia, Carlson runs meetings, incentives and events and Parsons is also responsible for the incentive marketing capabilities of the company.

A significant shift has taken place in the way big organisations approach staff reward and recognition in light of the skills shortage and the new breed of worker which is in the shape of Generation Y, says Parsons.

“They’re a demanding new type of employee and businesses need to adapt the way they approach relationship with them, and how they incentivise, reward and recognise and, ultimately, engage them,” says Parsons.

The approach to incentives and reward used to be fairly white label, generic, and focusing only on some behaviours as opposed to a number of different behaviours that all contribute to an employee’s engagement, and that needs to change, he says.

Dave Jackson is director and head of the account service team for Solterbeck, an Australian provider of performance improvement programs.

Based in Melbourne, Solterbeck typically services Australian-based clients, and licences a software product internationally. Solterbeck has been working with HR teams for more than ten years, says Jackson.

“But, really, it’s been in the past five years that there’s been a really substantial lift in interest from large companies, government and non-government organisations in terms of engaging their people and the role that recognition and reward plays in that,” he says.

Adrian Finlayson is CEO of Accumulate, which serves more than 50 of Australia’s top 200 companies. “The biggest question for anyone putting an incentive solution in place is: ‘How is this going to drive incremental revenue over and above what I'm doing?’” he says.

Companies are now trying to find funding models for incentives that are structured around paying for incremental results only, he says.

Economies of scale

A key trend is an increasing level of sophistication in enterprise-wide recognition programs. A few years ago many companies were running these programs for the first time, with staff nominating their peers to get a bit of recognition and reward going. That is no longer enough, says Jackson.

“There’s a move to much more sophisticated programs and really understanding how this is driving engagement and performance for the organisation and then integrating much more within the organisation.”

Organisations need visibility and clarity about what behaviours the program is going to drive, and what the outcome of those behaviours will be in terms of incremental benefit, says Finlayson.

Driving staff behaviour through incentives

Companies are increasingly seeking an overarching program they can put in place to allow them to establish different solutions, different processes, different mechanisms by which people are recognised and incentivised according to the business unit those people work in, says Finlayson.

“For example, you may have one business unit that prefers just to have managers being able to nominate employees while in another unit where you may want employees to nominate each other for their performance,” he says.

It can be very difficult, he says, to identify on a daily basis the behaviours that are being driven at an individual level as a result in performance:. “So give the tools to the staff.”

One trend now coming to the fore is that companies who have traditionally sold products through channels want to get a handle on the sales characteristics of their products through each channel, says Finlayson. Increasingly they want to find out why and how they are selling their product, and then be able to promote them in real time, he says.

“They now seek control and visibility into what’s happening to drive recognition and incentives across their own organisations and sales channels, and to have control and visibility across all those programs sitting under one umbrella,” he says.

Everyone has what they need

“We’re now in a place of abundance. Everyone has a house or somewhere to live, everyone has two cars, everyone has an iPod,” says Parsons.

“We’re finding that bigger or more isn’t always bet ter when it comes to motivating employees to achieve great things in the workplace,” he says

Increasingly HR has a broad role to play in utilising the different tools that they have at their disposal to market to this new breed of employees that doesn’t just want an extra $50 a week, says Parsons. These employees want to feel part of the organisation and want to see that the organisation is doing the right thing with regard to corporate social responsibility.

But employees also want to be paid at the right level with the right kind of benefits and flexibility about how they approach their work, or importantly, reward and recognition, says Parsons. He cites an automotive client with a not very effective incentive approach that was driven only by commission and vouchers, and targeted only certain segments within their employee base.

“With the HR, sales and marketing divisions, we developed a multi-level program that targeted sales-based and non-sales based employees under an umbrella brand of reward and recognition programs,” says Parsons.

Enabling such a program from a back-end point of view is fairly quick, says Parsons. The key area that is often overlooked is in communicating and engaging your audience in the program.

“You need to also ensure that the internal stakeholders are on board, that they support it and they get it and they can communicate it as well,” says Parson.

The automotive group saw a sales lift of 20 per cent in the next quarter under the new program. Among non-sales based employees there was a reduction in turnover and an increase in functional support, says Parson.

The Incentive Show

Carlson Marketing, Accumulate and Solterbeck will be exhibiting at the Incentive Show.

Held in Sydney on June 3-4, the show is the official exhibition and learning event for the incentive marketing industry. For corporate end-users, the Incentive Show provides an opportunity to discover the very best in incentive merchandise, corporate gifts, awards, motivation activities, incentive travel destinations andspecialist performance improvement and reward management companies.

For the incentive industry, the Incentive Show provides an opportunity to be in the know with what’s new, what’s hot andwhat’s next in motivation, incentives and promotions. Find new suppliers, create new partnerships, rekindle old relationships, and network with the who’s who in incentive marketing.

For more information, visit www.incentiveshow.com.au.