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Small Rewards Can Push Productivity

July 15, 2002
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Related Topics: Recognition, Compensation Design and Communication, Featured Article, Benefits
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In a weak economy, it can be especially challenging to motivate employees.Fewer dollars are earmarked for bonus or incentive programs, and management isloath to support any cash giveaway, even when a program is directly tied tobottom-line results. But that doesn’t mean you have to throw away the idea ofrewarding employees for improved behavior. Small gifts that symbolize yourappreciation can have a surprising impact on employee satisfaction andperformance, carrying more weight even than cold cash.

Even if you have a big budget for recognition programs, cash is rarely thebest motivator, says Andrew Perlmutter, cofounder of InMarketing Group, anincentive company located in Mahwah, New Jersey. "You never want to confuserecognition with compensation," he says. "When you pay people for doing agood job, it becomes part of their salary expectations." A gift, however --whether it’s a trip to Cancun or a coffee mug -- is a luxury separate fromcompensation that shows respect and commends accomplishment. "Buying anemployee dinner for two may only cost you $40, but the acknowledgment of a jobwell done has significant value," Perlmutter says.

If your budget is limited, inexpensive gifts delivered with fanfare may bejust the push you need to improve performance. "If you create a recognitionprogram that is fun and makes a big deal of successes, people will get excitedabout it," says Pat Zingheim, cofounder of Schuster-Zingheim and Associates,Inc., a pay and reward consulting firm in Los Angeles. It doesn’t have to beabout the value of the gift; it’s about the celebration and recognition thatgo with it. It shows employees you appreciate them and gives them a symbol ofthat recognition.

Giving gifts instead of cash as incentives can also help employees setphysical goals for improved results on the job. For example, a 25 percentincrease in sales is a nebulous aim, even if a monetary commission is attachedto it, but a goal of winning a family trip or a new set of golf clubs issomething employees can visualize, Perlmutter says. "It helps them paint apicture of their goals and what they need to do to accomplish them."

The promise of gifts alone, however, doesn’t guarantee an incentive orrecognition program’s success. There are several issues that should beaddressed. Otherwise, the program will be a waste of money and can actuallydiscourage employees.


Making a big deal of the winners inspires employees to work harder and keeps the program in the public eye.

First you must establish a clear-cut goal for the program that is directlytied to the company’s value system, says John Farrell, senior director ofclient strategy for Carlson Marketing Group, in Minneapolis. "What is thebusiness objective you hope to accomplish?" It can be increasing sales,improving customer satisfaction, or building employee loyalty. "Not allyingthe program with the corporate mission is a common mistake."

If the goal requires a change or improvement in behavior, training may be anecessary component of the program, he adds. For example, if you want yourcustomer-service team to manage call volume more effectively, along withoffering prizes for closing more calls per day, put them throughcustomer-support and product training. "Incentives alone won’t improveproductivity if employees don’t have the skills or knowledge to change theirbehavior."

Choosing the wrong incentives can also affect the success of the program,says Perlmutter. The gifts have to be appealing, varied, and worth the change inbehavior. Give employees a selection and make it easy to get small rewards forsmall changes in behavior, while building toward something bigger. If the barfor achievement is set too high or the payoff is too far away, employees can getfrustrated at their inability to see short-term success, he says.

Communication is another critical element. A program needs a title and themeto identify it, a big launch to kick it off, and constant reminders of the goalsthrough posters, articles, and celebrations of success along the way. "Amessage has to be delivered 10 times before it’s completely absorbed,"Farrell says. "The more you reach out to people, the more successful yourprogram will be."

Once an incentive program has been launched, keep people abreast of who hasreceived rewards and remind them what they need to do to achieve their goals."If no one uses the program, it will disappear," Farrell says. Making a bigdeal of the winners inspires employees to work harder and keeps the program inthe public eye.

If it’s a peer-to-peer or manager-delivered recognition program, regularlyencourage people to acknowledge exceptional behavior and remind them of howvaluable it is, Farrell says. "Recognition is like oxygen to employees; theycan’t survive without it."

Workforce, June 2002, pp. 86-90 -- Subscribe Now!

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