Nine powerful lessons about recognition from the Fortune 500 and other large-scale organizations.
Last year, companies spent $46 billion on programs to motivate employees, according to the Incentive Federation Inc. Nearly three-quarters of this total ($32.7 billion) was spent on incentive products like electronics, gift cards and watches.
Why are companies willing to shell out this kind of dough for incentive merchandise? Jim Schroer, CEO of Carlson Marketing, says the right product, “will engage employees in an emotional way. When you hit it right, the product is worth 10 times or 50 times more than the cost of what you paid. You may not get it right all of the time, but when you do, it is nirvana”.
Large corporations, with sales exceeding $100 million, see the value in incentive merchandise as 59% said they planned to increase their budgets last year as well as this year. But companies don’t need mega-budgets to create an effective employee motivational program. Here are nine tips to steal from some of the country’s most powerful corporations:
1. Involve the entire staff. Too often, companies will want to spur their salespeople only. The fact of the matter is, there are a lot more cogs that the corporation needs to run smoothly. Ignoring the non-sales staff is a critical error. Just ask Apple’s Steve Jobs. At a company town-hall meeting last July, Jobs thanked his 20,000-plus employees by giving each and every one of them a new iPhone. The year before, Jobs gave out iPod Shuffles to all employees, including those who work in Apple’s retail stores. And while the company’s top executives get certain financial incentives, other perks – including free shuttle service to work and an on-site car service – are available to everyone. “Steve clearly believes that revving up rank-and-file employees is the key to continued success,” says Jacqueline Parsons, an incentive consultant who works with high-tech companies. “So many companies just focus on the salespeople. Motivating the whole employee base can be much more powerful.”
2. Get the spouse excited. It felt like entering the ancient past of the Mayans, rather than entering the ballroom at the Westin Resort & Spa in Los Cabos, Mexico. A backdrop included an Aztec temple staircase, lit pillars and statues that came to life when attendees entered. This was the scene at Endo Pharmaceuticals annual President’s Club incentive trip last year. “We wanted to immerse them in the Mayan theme,” says Harith Wickrema, owner of Harith Productions, the company that planned the event.
To get salespeople excited about the prospect of attending such a once-in-a-lifetime event, it’s important to create promotional materials for the spouse as well. Getting the sales rep’s husband or wife onboard is key for getting that extra little kick in the the you know what. “It’s an integral part because when they win they will bring their spouse,” says Wickrema. Teasers can include scenic postcards from Mexico and logoed mouse pads to remind them of what they could experience. Wickrema recommends appealing to the five senses by sending items they can touch, feel and smell. Aromatherapy items work particularly well. “Get that imagination working,” he says.
Paragon Credit Union is another company that goes out of its way to reward a broader group of employees. The financial institution tapped Youngworth Public Relations “IncentiveLeague” program to motivate its entire staff to sell. The baseball themed program, which uses baseball-branded pens and other items as reminders, breaks the company up into teams. The teams are made up of sales staff as well as other non-sales members of the company, right down to the armored truck driver. Each team member is encouraged to reach out to their network, whomever they may be. “It communicates to employees that everyone shares responsibility for company sales,” says John Zalaric, Youngworth’s chairman. “Sometimes you’ll find that some employees are good salespeople.” He says at one bank, “the armored truck driver won.”
3. Be consistent. The Dow Chemical Company has approximately 45,000 employees in 62 countries that speak 11 different languages. Across this wide spectrum of locales existed a series of different incentive programs with a series of different awards. Dow decided to stop them all and start one global program that centers around promoting the company’s core values: productivity, culture, competitive standard and value growth. No matter what the region, the program was the same and so was the reward. The company opted for logoed gift cards “so everyone could make choices that were culturally appropriate and satisfying,” says Andrea Dumont, senior director of global marketing for Globoforce, which created the program. Since implementing the new incentive effort, 200,000 rewards have been redeemed annually and employee engagement has increased from 60% to 85%, per company research. “Strategically aligned recognition drives behaviors, actions and results that lead to business success,” says Andrew Liveris, CEO of the Dow Chemical Company. “At Dow, people are recognized for their contributions. It is important that everyone understand why recognition is important, know how to recognize employees effectively and make recognition a part of every day.”
4. Start at the top. Employee motivation is best when the message comes from the top down, says RPI’s Gibson. “Everyone needs to be involved.” She points to MGM Grand Hotel & Casino in Las Vegas as the gold standard of creating a consistent program where everyone buys in, including the president. This is no easy task considering the property is like a city unto itself with 5,000 rooms in four 30-story towers.
A host of recognition programs include its “Maximum Vegas Performance Commendation” where managers reward employees for exemplary service. MVP recipients are entered into a drawing for prizes. There is also the Gold Key Award, Star of the Month as well as daily programs. Senior management is onboard with all aspects of the program beginning with the funding (its employee recognition budget is in excess of $500,000) right down to president interviewing all of the senior vice presidents about their nominations for Employee of the Year.
The president even selects employee gifts each year. Last year he gave out 9,200 MGM Grand imprinted Seiko watches. The hotel has been continually rated one of the best places to work and the turnover numbers prove it. The MGM Grand’s turnover rate 11.4% while the rest of hospitality rate is at 49%.
5. Pay to promote the program. Companies should spend 20% of their incentive budget on promoting the program, says Josh Brown, vice president of national accounts for Incentive Solutions Inc. “If you don’t, it will fail.”
Mohawk Carpets, for example, uses shirts, hats, cardholders and memo blocks to remind incentive participants of the task at hand. “Items that they can keep on their desks are good,” he says. “It doesn’t have to be that expensive.”
No matter how much companies invest in promoting the incentive program, Brown doesn’t recommend letting the contest last beyond 12 months. “Anything longer is difficult to sustain,” he says.
6. Create the Harley-Davidson effect. Harley-Davidson, historically, has some of the strongest loyalty and equity of any brand. Harley conveys quality as well as freedom. When companies look to select items to give away, they need to aspire to find a program that will speak to the recipient on this deeper level.
Carlson Marketing created a program for “the best of the best” at Sun Microsystems that included a meeting component. Unlike other meetings however, this corporate get-together was devoid of paper. No memos, no pads, no nothing. Instead, everyone received a branded Nokia PDA loaded with the meeting materials. Of course, any of these top earners could buy whatever nifty electronic gadget they desire. However, the symbolism behind this logoed PDA is far more powerful, says Schroer. “It shows the company cares because they didn’t kill any trees,” he says. “Attendees are proud to keep it and when people ask about it they can say ‘We had this all green meeting and didn’t waste any paper.’” Schroer saw a similar sparkle surface during his Chrysler days. During its “The Look Of Pride Meeting,” the automaker handed out high-end lapel pins with the company’s top car logos. Reminding dealers of the strength of Chrysler’s badges “served as a tipping point,” he says. “It had the Harley-Davidson effect.”
7. Ratchet up the recognition. Selling ATM machines isn’t exactly the sexiest thing in the world, but Diebold has a select group of salespeople that can move machines like they are made of, well, money. The members of its Masters Circle tend to win incentives year after year. This makes it essential for the company to keep raising the stakes when it comes to rewards. Its travel incentives like last year’s “Jewel of the Pacific” event in Hawaii are the stuff of fantasy. Three hundred people descended upon the big island to be wined and dined. To make sure they were comfortable upon their arrival, a welcome package was left in their room. It contained a logoed beach towel, lotion and beach bag. “One year we didn’t give out a bag and people were upset,” says Scott Siewart, divisional vice president for USMotivation, the company that put together the program. “The bag is great because people end up buying stuff and need something to carry it home in.” Recipients also received some unusual room gifts, namely beads, eye patches, scarves and other swashbuckling ensemble for a pirate-themed gala dinner. Still, perhaps the most desirable item Diebold’s top winners receive is the Masters Circle recognition reward. At 10 years they get a watch, while the first year may be a PDA, says Siewart. “There is a whole schedule according to how many years they won. Earning the item becomes a badge of honor.”
8. Don’t be afraid to do good. Deloitte Services LP wanted to make an impact. Only, instead of rewarding employees with a lavish experience, it provided a rewarding experience. During its annual Impact Day, its 40,000 U.S. employees are given the day off to volunteer within their communities. Employees have opted to paint, garden and one even helped spruce up the gorilla cage at a local zoo. “We are a people-centered profession, so our business rests on the ability to recruit and develop top-notch people,” says Evan Hochberg, national director of community involvement at Deloitte. “Being able to demonstrate our organization’s values through our community involvement is an advantage when it comes to attracting employees and clients.”
All participants receive a 100% organic cotton blue Impact Day T-shirt with the Deloitte logo on front. The shirts are made available three weeks before the event. “People actually do get pretty excited about picking them up,” Hochberg says. “The day the shirts become available, the anticipation of Impact Day really starts to build.”
Once the day arrives, the shirts are equally powerful because “every year we always hear great stories about the sea of blue shirts that are seen when people congregate at kick-off events, closing ceremonies and even on New York subways on the way to events,” Hochberg says.
9. Recognition is the key. Kroger, one of the nation’s largest grocery retailers, wanted to get all of its employees’ attention as they launched a new customer service initiative. The issue was how to find an inexpensive way to recognize its army of 22,000 employees. It found its answer in a simple bar-shaped lapel pin with five rings.
Under Kroger’s “Customer First” initiative, every time a customer or staff member catches an employee doing something good, they are rewarded with a small key to hang on the hook. “Customers ask them ‘Why are you wearing that pin?’ It really created a sense of competitiveness – to do something nice,” says Marsha Londe, who helped develop the program prior to founding Tango Partners, a promotional products consultancy. “It’s a physical reminder that Kroger’s promotes good service.”
Londe says the pins work because they look good on the uniforms and instill a sense of pride. “It doesn’t have to be a TV set,” she says. “The question is: will the product influence behavior?” Because the pin is budget friendly, easy to distribute and, most importantly, effective – the supermarket chain continues to roll out the “Customer First” initiative to other regions.
Reprinted with permission of Successful Promotions, copyright 2007
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