Most Recognition Programs Don’t Conform to Best Practices

According to a recent article from the RewardsRecognitionNetwork.com, nearly all attendees at the recent RRN Expo in Chicago agreed that most recognition programs fail to conform to the best practices revealed by almost 20 years of research from dozens of independent sources.

Since the 1970s and 1980s the Incentive Research Foundation and the Incentive Marketing Association have done a wide variety of studies on the effectiveness of properly designed recognition systems.  It appears most companies aren’t listening!  They have seemed to ignore the fundamental principles of effective design for these programs. Why?

Unfortunately, there is no way for RRN to obtain accurate data on this conclusion as most companies don’t publish their program design and most suppliers of these programs don’t either.  The evidence to support this conclusion came from “discussions with many incentive, recognition and loyalty company principals and their corporate clients, and reviewing the incentive, recognition, loyalty and promotional programs prevalent in the marketplace.”   

The two main culprits of this poor design that fly in the face of the research include:

• Focusing on only the 20% of participants to drive performance rather than the middle 60% of the organization
• Failing to integrate the many parts of engagement to actual behaviors and performance outcomes 

Having sold in this industry for many years, we might add a couple more:

• Poor industry training for companies to truly understand incentives
• Poorly educated industry salesforce who almost always take the path of least resistance in order to make the sale
• Competing vendors in the engagement industry are all vying for the same budget dollars diluting the message in favor of their own deliverable
• The recognition industry as well as clients chase the short term, quick fix profit goals ignoring more expensive designs that can lead to potentially greater long term results.

 Where actual hard dollar corporate investment is concerned, companies don’t feel the outcomes of engagement efforts can be accurately measured.  And that has been the problem for the recognition industry since inception.  Truth is that it can’t, there are just too many variables to definitively show management what they actually receive in terms of bottom line results from recognition.  It’s a soft dollar discussion.

This situation is not new.  Over 25 years ago the Industry Research Foundation did a study with the American Productivity and Quality Center that provided the best template for effective program design.  In that study there was a very enlightening yet relatively obscure fact that the overwhelming majority of clients were not using their vendors for anything but the fulfillment of awards; not measurement; not design; not analytics; not communications.  It would appear that not much has changed in the last 25 years.

Ultimate Choice contains leadership who has combined incentive & recognition experience approaching 100 years.  We also sell the single most sought after award in the industry….GIFT CARDS.  And will still provide at no charge the expertise to help you design programs that will conform to the best practices to help make them as successful as possible. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Are Performance Reviews Poor Indicators of Performance?

According to a survey conducted by Globoforce and SHRM, which polled nearly 800 HR leaders, four in ten traditional performance reviews are poor indicators of actual performance.

Having been involved with employee performance improvement for decades, this result does not come as much of a surprise.  These reviews have never been consistent; they rarely contain solid measurable objectives and are always too subjective. They can destroy teamwork; they tend to be a solution looking for a problem; they rarely document what they are supposed to document; they’re backward looking when they should be facing forward.  And frankly speaking everyone (well almost everyone) hates them. Actually we are surprised that the survey didn’t find more than four of ten that were poor indicators. 

So what do you do in place of them?  This survey suggests that investing “1% or more of payroll in values-based recognition programs.”  60% of the HR professionals said their companies actually have these types of programs and those who dedicate the 1% (or more) of payroll said their programs are:

• Three times more likely to rate their programs as “excellent” compared to HR leaders whose companies do not spend that amount

• Three and a half times more likely to say their programs help to attract new job candidates 

• Nearly twice as likely to say their programs deliver a strong return on investment 

• Twice as likely to say their programs help retain employees.

Unfortunately, most companies do not spend 1% of payroll.  And that’s too bad, because the return on this investment, according to a growing body of data that supports incremental profit gained from employee engagement is mounting.  Take the time to look at your payroll data at 1% and then divide by the number of your employees.  That number may be relatively smaller than you imagine.  In many cases it’s less than $600 per employee per year ($50 a month.)  Is that too much to allocate to recognize those who really deserve it?

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Corporate Gift Budget Research

End of the year research conducted by Incentive Magazine shows that businesses are spending more on corporate gifts and giving them on more occasions.  Gift cards consistently show the highest usage by over 50% higher than the next closest category of corporate gifts used.  Customers and employees remain the most mentioned gift recipients.

Obviously when the economy is solidly in the “improved” column from the last few years of showing relatively flat growth, businesses are spending more on corporate gifts. Interesting, the number of respondents who say their firms give out the most expensive gifts are up significantly.

Some of the data from this report is shown here:

How Much Do You Spend on Average for Corporate Gifts?  
                                       

$$ Per Recipient	2016	2015
Less than $25	19.5%	27.2%
$25 to $49	23.6%	23.2%
$50 to $99	26.6%	23.6%
$100 to $299	17.9%	19.9%
$300 to $999	6.2%	4.8%
$1000 & up	6.2%	1.3%

How Have Your Budgets Changed Over the Past Two Years?

Budget Change	2016	2015
Spending more	27.4%	20.6%
Spending less	21.0%	30.4%
Spending the same	51.6%	49.0%

Which Type of Corporate Gift Do You Use?

Type of Gift	2016	2015
Gift Cards	67.7%	67.8%
Apparel	40.0%	38.8%
Office Accessories	36.4%	36.8%
Electronics	34.4%	32.2%
Food	32.8%	37.0%
Writing Instruments	25.1%	29.5%
Books, Movies, Music	22.6%	26.4%
Leather Goods	22.1%	15.9%
Wine & Spirits	21.5%	25.6%
Watches	19.5%	14.5%

Who Are Your Corporate Gift Recipients

Recipients	2016	2015
Customers	67.18%	68.3%
Employees	66.15%	69.1%
Prospects	16.92%	19.3%
Suppliers	12.31%	22.6%
Other	6.15%	8.6%
Stockholders	4.1%	5.4%

For more information on AwardSafety products or services or other white papers please contact us at awardsafetyinfo@cox.net

Why Using Cash Incentives Doesn't Work

Organizations continue to spend millions of dollars trying to motivate their employees with cash?  Why, if everyone who has studied the incentive business in any depth knows these programs don’t work.

Instead you might want to try identity exactly what motivates your employees through solid research.  Determining solutions to do those things you uncover is not the easiest approach to implementing an incentive program, but it has proven to be the most effective.

We all love cash, so what are the reasons why using cash incentives just don’t work?   Here are a few:

• People are already motivated. And additional cash incentives at best are effective only 20-25% of the time.
• You can’t motivate the middle 80% of your workforce with a single strategy.  But you can provide an environment where they can tap into what already motivates them. An inducement won’t motivate performance if it’s not what the individual wants.
• Cash won’t buy engagement. You can’t read a human resources magazine without seeing something about employee engagement.  It’s estimated that only 13% of employees worldwide are engaged at work.
• Most cash incentives are macro in nature, with little involvement by the immediate supervisor.  Yet the most critical relationship exists between the employee and their immediate supervisor.
• Cash won’t necessary create better leaders, but leadership development definitely can.  If you have the cash to spend, get something for it and invest in leadership development.

Cash incentives are the easy way out.  Sometimes it’s just easier to give $25 than creating a truly motivational timing.

The argument about of cash incentives has been around for decades.  To see more information on the differences between using cash or non-cash as a motivational award, please click here.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net