In a weak economy, it can be especially challenging to motivate employees. Fewer dollars are earmarked for bonus or incentive programs, and management is loath to support any cash giveaway, even when a program is directly tied to bottom-line results. But that doesn’t mean you have to throw away the idea of rewarding employees for improved behavior. Small gifts that symbolize your appreciation can have a surprising impact on employee satisfaction and performance, carrying more weight even than cold cash.

    Even if you have a big budget for recognition programs, cash is rarely the best motivator, says Andrew Perlmutter, cofounder of InMarketing Group, an incentive company located in Mahwah, New Jersey. "You never want to confuse recognition with compensation," he says. "When you pay people for doing a good 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 from compensation that shows respect and commends accomplishment. "Buying an employee dinner for two may only cost you $40, but the acknowledgment of a job well done has significant value," Perlmutter says.

    If your budget is limited, inexpensive gifts delivered with fanfare may be just the push you need to improve performance. "If you create a recognition program that is fun and makes a big deal of successes, people will get excited about 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 be about the value of the gift; it’s about the celebration and recognition that go with it. It shows employees you appreciate them and gives them a symbol of that recognition.

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

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

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

    If the goal requires a change or improvement in behavior, training may be a necessary component of the program, he adds. For example, if you want your customer-service team to manage call volume more effectively, along with offering prizes for closing more calls per day, put them through customer-support and product training. "Incentives alone won’t improve productivity if employees don’t have the skills or knowledge to change their behavior."

    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 in behavior. Give employees a selection and make it easy to get small rewards for small changes in behavior, while building toward something bigger. If the bar for achievement is set too high or the payoff is too far away, employees can get frustrated at their inability to see short-term success, he says.

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

    Once an incentive program has been launched, keep people abreast of who has received 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 big deal of the winners inspires employees to work harder and keeps the program in the public eye.

    If it’s a peer-to-peer or manager-delivered recognition program, regularly encourage people to acknowledge exceptional behavior and remind them of how valuable it is, Farrell says. "Recognition is like oxygen to employees; they can’t survive without it."

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