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Incentive Programs Can Make a Difference

By Tim Passios,
Director of Product Management, Interactive Intelligence

The premise sounds so simple at the beginning. We have work that needs to be completed. You need money. Perhaps we could pay you money to do our work. Unfortunately, that’s where the simplicity ends.

The actual “doing” of the work gets tricky. Some people do more than others. Some accomplish more, but make more errors. Employers want to reach their goals of getting as much work done with the highest quality possible. Employees want to work some place they enjoy, are treated with respect, have opportunity, and are compensated well for their work. This is especially important in contact centers where agents are speaking to customers. In outsourced contact centers, they may represent different companies at the same time.

How do we reconcile the needs and desires of employers with those of the employees? Many people have tried to design incentive plans to do just that – and failed. But wait. That doesn’t mean the idea was bad. It’s much more likely that the way the incentive plan structure was flawed.

Many employers struggle to find an incentive plan that really works. Certainly, some constraints can’t be overcome. If the reward for achieving an excellent result is $1 extra at the end of the week, that has to be addressed. However, the reverse is true also. If the reward for satisfactory result is $5,000, you may never have anyone work harder for $5,500. Let’s look at some principles that can help create the right framework for an incentive plan.

Make feedback and rewards continuous. The faster you reward your employee, the stronger the reinforcement. Rewards that come at the end of a quarter, month, or even week are too delayed to tie the performance to the reward.

Keep the incentive program going. If the program stops and starts, you’ll never build trust and you’ll lose momentum.

Use more frequent but smaller rewards. You can improve attendance by making it something people get small rewards for daily. Use bigger rewards on Monday and Friday to reduce absenteeism. This will be more effective than rewarding perfect attendance.

Give employees reward choices. You will never find a reward everybody values in the same way, so don’t even try. By using reloadable debit cards, employees get to pick their own reward and that increases the value of your reward to them. If you decide to offer choices, be flexible and factor in the extra time to manage those choices.

Make rewards special. When it’s time to give a reward, make a big deal out of it. Make other people aware of it and desirous of it. Don’t include it in their payroll. They will notice it but it will not get the recognition you are seeking. Update payroll with the reward, but don’t disburse it in payroll.

Make some rewards random. Not everything in life is performance-based. Let everyone get a raffle ticket and then have someone draw out the numbers that win. Make one reward bigger to create anticipation and desire.

Involve your management. Team leaders, supervisors, and managers should all participate in the incentive program. Establish goals and levels of achievement and reward for them too. Their goals should dovetail with the goals of their team members.

Ask for suggestions. There’s nothing like giving people what they want – and you have to ask them. Don’t assume you know. People will often surprise you. Try to incorporate their feedback.

Promote your incentives. When you have positive feedback from your program, use it when promoting your company to other prospective employees. There is nothing like real-world comments to reinforce the value of your program.

Don’t spend more than necessary. Find a reasonable amount that works in your budget and provides an effective incentive. Don’t go above that. Going higher doesn’t produce more benefits or better performance. Staying within your budget ensures that the program can be sustained and continue to deliver the benefits your company seeks and the rewards your employees desire.

Most of all, realize that you can have a positive effect on your employee’s performance and satisfaction. A properly designed incentive program rewards your employees because they have made important and significant contributions to the company’s revenues and profits. If your incentive program isn’t doing that, it’s time to shake things up.

Here’s a great example. I heard about this and I wish I had thought of it. A manager took his incentive budget and filled a bag with $1, $5, $10, $20 and $50 bills. When it was reward time, employees pulled a bill from the bag. The reward was random. If the employee pulled a $50, everyone cheered. If he pulled a $5 bill, they all knew that there were still more $50 bills left in the bag. Brilliant.

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