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Employee Rewards & Incentive Programs
Bob CowenSnowfly Incentives
Incentives Are Everywhere
Incentives Are Everywhere
The good news – We can do better
Dr. Aubrey Daniels
DiscretionaryEffort
“Have-to-do” curve
R-Base $
“Want-to-do” curveR+Incentive $
MINIMUM REQUIREMENTS
Over Time…
Pe
rfo
rman
ce L
eve
l
20% - 40%
“People will produce more to achieve something they want, than they will to avoid something they don’t want.”B.F. Skinner
Incentive Programs – The bad news
• Short lived• Prior behaviors
return
• High maintenance• Try to keep fresh• Manual input &
update results• What prizes to buy
• Superstar effect• No connection with
agent score cards
Incentive Meta-Study
The Effects of Incentives on Workplace Performance: A Meta-analytic Review of Research Studies
• Steven J. Condly– University of Central Florida
• Richard E. Clark– University of Southern California
• Harold D. Stolovitch, Ph.D.– HSA Learning & Performance Solutions, LLC
6
Study Findings
• Longer term programs are more effective- 20% gain: Short-term: 1 week or less- 30% gain: Intermediate-term: 6 months- 44% gain: Long-term: > 6 months
7
Improvement
• Money talks– 27% increase: monetary rewards
– includes gift cards and debit cards
– 13% increase: gift/travel rewards– No studies dealt with perceived value of gift incentives or compare
money to gift / travel
• Only 23% of incentive programs involved recipients in incentive selection
8
Conditions Indicating Need For Incentives
–Current performance is inadequate–Cause of inadequate performance
is motivational–Desired performance can be
quantified- How much- How often- How many
9
Incentive System Goals:
• Must be challenging but achievable
• All other work goals must be achieved at or above current levels
10
Key Conclusions from Study
• Organizations must...1. Select incentives only when appropriate
(motivation gap)2. Select incentives only for challenging goals3. Involve targeted recipients in the selection of
incentives4. Ensure equity and fairness5. Focus on implementation6. Communicate and monitor continuously
11
Improve KPI’s 20% for 2 hours of labor cost/month
– Absenteeism – Schedule adherence
& availability– Reduce early-stage
turnover– Recruit new employee– Call quality & data
accuracy– Fewer & shorter
meeting
– $ Collected– Phone payments– Complete payments,
partial, average– Promises kept
percentage– “Can be reached” info– Skip tracing success– Policy knowledge,
no FDCPA violations
Four Critical Principles
• Volunteer• Likes games• Rewarded
Draw a card:
• $5.00 • $1.00 • $0.50• $0.25• $0.10
Four Critical Principles
• Reward the daily “homework” – Distribute rewards frequently in small
increments
• Make work fun• Pay rewards immediately• Provide choice of rewards
Reward the homework in everyday terms:
• Attendance– High absenteeism
days i.e. Fridays and days before or after holidays
– Bonus for five days in a row
• Schedule Adherence• Quality• Turnover
– First day, first week– Introductions from
coworkers
• Collections– Complete payments,
partial, average– Close ratio– Promises kept
percentage– “Can be reached” info– Skip tracing success– Policy knowledge, no
FDCPA violations
How It Should Work
Achievement PrizesPointsGame
Examples: Improve Attendance & Schedule Adherence
• 2x daily– Awarded daily
• 10x five shifts in a row– When completed
Make Work Fun:Random Intermittent Reinforcement
• Extremely powerful• What is more exciting?
– Finding a quarter in the seat cushion?
– Finding a quarter next to a slot machine?
• Immediate gratification– The excitement that comes with the
chance to win $ is a reward in itself
19
Can the Value of Money Change?
The Value of a Nickel by Location
Location Walk by/Pick up Ratio
Denver Hotel Lobby245 to 1
Casino Hotel Lobby21 to 1
Casino Floor 2.1 to 1
Why play games for points?
• 99%+ play games– All based on chance
• Every game wins every time– 5-20 seconds
• Token Average = 10 points– Max = 5,000 points
($50)– Min = 2 points ($.02)
• Point = 1¢– Token = 10¢
• Play at:– Kiosk, break or lunch room– Workstation (limited)– Home (40% +)
• Less than 10 minutes/week– 90 seconds/day at work
• No “Mulligans”• No tokens = can’t play
Games are Effective(it’s fun, exciting and they work)
How to harness randomized reinforcement
Employee qualifies for incentive …
•Friday Attendance
•85% Collection Rate for Week
•Demonstration of Core Values
Employee is awarded game tokens…
•Friday Attendance = 10 Game Tokens
•85% Collection Rate for Week = 25 Game Tokens
•Demonstration of Core Values = 15 Game Tokens
How to harness randomized reinforcement
How to harness randomized reinforcement
Employee plays a game and wins a random number of points…
•Non-skill based, the skill is in earning the tokens
•Every play yields an average number of positive points
How to harness randomized reinforcement
Employee redeems points for a reward of his/her choosing
•$50 Gift Card = 5,000 Points
•Paid Day Off = 11,000 Points
Game examples
What employees really want!
Given Choice: What kind of Rewards?
•Choice•Real value
Point Redemptions by Month(dollar value)
RVOLPC: Transparency = Trust
RVOLPC
Item Catalog Price On Line Price Mark Up
Toolbox $59 $20 295%
Binoculars $68 $28 243%
Computer bag $134 $80 168%
Cookware set $164 $76 216%
iPod Shuffle $211 $49 431%
Coby 15” TV $309 $100 309%
iPod Touch $461 $264 175%
Canon digital camera $706 $230 307%
Cross Logo Pen Sets
The Process
Achievement RewardPointsGame
Immediate Game Token
5 secondsConsistentIntermittent
Shopping Mall
Immediate
Results: Reduction in Absenteeism
# of Absentee Occurences per Day
05
10152025303540
6/2/
2006
6/9/
2006
6/16
/200
6
6/23
/200
6
6/30
/200
6
7/7/
2006
7/14
/200
6
7/21
/200
6
7/28
/200
6
8/4/
2006
8/11
/200
6
8/18
/200
6
8/25
/200
6
9/1/
2006
9/8/
2006
9/15
/200
6
9/22
/200
6
9/29
/200
6
10/6
/200
6
10/1
3/20
06
1 Occurrence
2 Occurences
Linear (1 Occurrence)
Linear (2 Occurences)
Examples:
• Awarded in tokens– 50% bonus tokens on Fridays
• Tokens for the first promise of the day > $250
• Tokens for the last promise of the day > $250
• Tokens for voluntary overtime
Turnover Attack Zone
“Attacking” and lowering turnover in the early days of employment will lower the overall rate
The Power of Compounding Turnover Rates
Incentives for new-hires
• Tenure Incentives for the first 90 days– Decrease in frequency– Increase in $ value
• First day on the job = 2 tokens• Pass daily training quiz = 2 tokens• End of first week = 10 tokens• Finish training = 25 tokens• End of first month = 50 tokens• End of second month = 100 tokens
Incentives for new-hires
• Encourage “bonding”– Learn names of fellow new hires– Peer mentoring– Live observations– Learn names of other team members– Performance tips– Car pooling
Reduced turnover
Retention begins at recruitment
• Employee referral program• Give the referring employee a stake in the
new hire’s success– Submit name = 1 token– Completes Interview = 2 tokens– Hired = 4 tokens– First Day at work = 8 tokens– Completes training = 16 tokens– Finishes 30 days = 32 tokens– Finishes 60 days = 64 tokens
Example: Quality Score, Qualifier for Other Rewards
• No or minimum FDCPA violations• A qualifier for other rewards• Tokens awarded when scored
Reduce Meetings & Training
• Time away from the job is expensive – How to disseminate information?
• Quiz and survey– Reward for passing quizzes– Reinforces meeting & training content– Improved quality, more sales, etc.– More time on the job
Four Critical Principles
• Reward the daily “homework” – Distribute rewards frequently in small
increments
• Make work fun• Pay rewards immediately• Provide choice of rewards
Inexpensive, simple and proven ways to change behaviors.
• $ 50• $ 20 x 2
• $ 10 x 4
• $ 5 x 8
• $ 1 x 140
Inexpensive, simple and proven ways to change behaviors.
• Green x 1
• Orange x 2
• Yellow x 4
• Blue x 8
• Red x 140
Inexpensive, simple and proven ways to change behaviors.
• Toss Across• Replace X’s & O’s
– Points or prizes
Inexpensive, simple and proven ways to change behaviors.
Team A Team B Team C
Improve KPI’s 20% for 2 hours of labor cost/month
– Absenteeism – Schedule adherence
& availability– Reduce early-stage
turnover– Recruit new
employee– Call quality & data
accuracy– Fewer & shorter
meeting
– $ Collected– Phone payments– Complete payments,
partial, average– Promises kept
percentage– “Can be reached”
info– Skip tracing success– Policy knowledge,
no FDCPA violations
Samuel Goldwyn
• “The harder I work, the luckier I get”
Should you evaluate?
• Examine your present incentives/rewards– Does it work?– Is it cost effective?
• Conduct side-by-side 90 day test– Improvement in KPI’s?– Less administrative workload?– Cost less than doing it on your own?
• Get participation from suppliers & local merchants
Recommended Reading
Turning Research Into Results - A Guide to Selecting the Right Performance Solutions
Games, Work and Human Motivation An Applied Behavioral Approach to Employee Achievement and Recognition.
More reading
• Paper or Plastic?• What do employees really want?• Do’s and don’ts for successful incentive
programs• Four Principles• How much should you spend on incentives?• Superstars can hurt your contact center• Most costly incentive program mistakes• What is RVOLPC and why should you care?
