The Caveats of a Digital Point Based Award Systems

Point based award systems have been in the incentive industry starting in the fifties.  In those days all the rage was issuing paper checks worth thousands of award credits or points that were redeemed for merchandise awards out of physical catalogs.  These ubiquitous points’ schemes now permeate the marketing world in all sorts b2b as well b2c programs. 

With advancing technology these software incentive management tools offer an ever increasing number of features and mechanisms for “limitless options in one simple solution,” designed to free you up and make all your incentive programs worry free!  Really?

The web is full of these systems, some very sophisticated, and it seems that every full service awards company has their own.  As new software companies spring up with the next “digital points system for the ages”, one seemingly better than the next, we think it is important to let you know that with these, the devil is indeed in the details.  And in the planning and design phase these details are critical to cost and how effective the program will be.  Before you decide on a points based system, remember the phrase Caveat Emptor, or let the buyer beware.  Here are just a couple of important details to be aware of.

Value you ascribe to a point.

To be frank, points based systems were originally invented to hide the price of the

merchandise awards.  At the time they were substantially higher than retail and by using thousands of points for an item, it was difficult to determine the actual value of that item.  With the advent of online merchandise portals it is relatively easy for your participants to determine the real value.  By simply dividing the value you determine the item to be from an online search by the number of points necessary to redeem for the item value per point is readily available.  Take the time to do a random check of items offered to see if they are competitive.  If experience is a guide….you will find that most will not be.

How and when you pay for the points

Whether you pay for the points when you issue them (most suppliers love this approach) or when they are redeemed, opens up a can of worms called “breakage” or “non-redemption.” Regardless of all the mumbo jumbo provided by the supplier, including the scare tactic of which way does or doesn’t have income tax liability, it is typically not in your interest to pay for these points on issuance….period!  We will be happy to consult with you on this particular subject if the facts are being distorted.

The complexity of your point earning rules structures

With any of these systems it’s relatively easy to download a list of participants and the

points earned for a program part.  But we have not seen one system that will take your various raw data that combines to determine how many points were earned based on the specific rules and do those calculations.  That tedious and time consuming chore is up to you.

Buying more features than you need

You don’t need a sledge hammer to crack a walnut.  All of these systems have many more features than you will ever use.  In a survey we did of customers a few years back, the average company that had multi-featured systems used less than 25% of them.

Who controls the award portfolio in your system

This is a critical point often overlooked in the buying process.  Most of these suppliers have come to realize that the profit in selling these systems is in the awards, not the software. 

They often give away the software at cost or for nothing to be able to sell the awards.  When they control the awards piece they control the ongoing profitability.  This is often at the expense of your participant where only a portion of your overall program budget gets to them in awards.  And wasn’t that the idea in the first place?

There are many more caveats that you should consider when you’re in the process of implementing a points based award system.  There’s not enough space to enumerate them here but we would be happy to discuss them with you.  Just let us know.

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

Is Your Culture in Neutral?

When you visit any small business during your normal life routine it is always easy to determine if that business has a negative work environment.  If it is, you probably won’t be going back.  No one really wants to trade with a business where the climate is harsh.  How is it that the small business owner completely understands the effects of a positive work environment?

Everyone has reason once in a while to become negative at work. That’s just normal.  But when that negativity becomes a habit, everyone suffers and it will dramatically affect productivity.

Research has given us the following conditions that can lead to negativity in an organization:  

• Any major change not implemented well
• A history of rewarding poor performance and ignoring excellence
• The absence of a learning environment
• A challenge to stability
• One-size-fits-all approaches to individual motivation

 If your company is going through any of these issues, you need to keep a watchful eye out for negativity, it can cost upwards of $300 billion dollars a year in lost productivity.  It is up to executive leadership to recognize a bad condition and develop remedies to cure it. When negativity emanates from the executive suite, it is up to everyone to let them know as well. We know that’s not always easy, but without it, the downward tailspin the company can get into will be fatal for all. 

If you don’t know whether you are at the beginning of your tailspin, just walk around the workplace. Extreme negativity is palpable, positive energy is obvious.  Neutrality is just that…folks are in the middle, going through the day to day, not really negative but surely not positive either.  If you are in neutral, that’s a great time to start making changes to turn the organization into a positive place where people really want to be, not just have to be. Happiness doesn’t just feel good; it’s great for your bottom line.

To begin the process of becoming a positive workplace with highly engaged and responsive employees, here are some strategies.  They can help transform the company from the inside out:

Foster positive communication.  Language is important; make sure you replace any negative or critical language with a more favorable tone.  Just take a look at communication from management over the last month.  Single out the negative statements from the positive ones, and then put it into a ratio.  You might be surprised how easy it is to change.  Then make it a habit to do it.

Assist in building positive relationships.  Don’t focus on the mistakes, emphasize strengths over weaknesses and recognize positive performance whenever possible.

Associate all work being done with positive meaning.  Highlight the value and significance associated with the company’s performance and connect the outcomes with the core values of the employees.  

Encourage a positive climate. Make sure the positive emotions predominate over negative ones  Exhibit positive emotions and express gratitude regularly will inspire your employees to flourish. 

IN THE ABSENCE OF A POSITIVE FOCUS,

 A NEGATIVE CLIMATE WILL BE THE NORM

                                                    ….Dr. Stefani Yorges

We’ve all had days when 99% goes right, but we concentrate on only the 1% that went wrong.  Counter that tendency toward the negative with an overload of the positive!

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

What Great Bosses Know About Employee Recognition

It’s not unusual for people to be raised with the philosophy to simply do your job and that will be reward enough; or people don’t deserve thanks for doing what they are supposed to do, only if they are extraordinary. Many were told that if you show up on time, work hard you’ll succeed in the workplace and move up the ranks…that a paycheck meant “I love you.”  But that’s just not the case.  In one engagement survey after another we see that the paycheck is not the driving force behind people staying on the job.

When managers have this philosophy it can certainly affect the way they deliver performance feedback…and why people can find them more negative than positive.  But the really top managers don’t do that, here’s what great bosses know about recognition that others don’t:

• Whether a manager is a self-made success or someone who doesn’t need nor expect thanks, they realize it’s not about them, it’s about what works best for others.
• They realize that today’s employee wants more appreciation and when they get it they may deliver more to others.  That can change your workplace to an entirely warmer culture. 
• Good managers know that you don't have to thank them all and thanking people doesn’t mean you’re declaring them to be perfect. 
• Great managers have discovered that after starting a habit of recognizing that it is not that daunting and that it builds a habit of something they look forward to 
• They know that just because some disgruntled employee blows off your thanks, they don't take it out on others by withholding appreciation.
• They know that thanking employees doesn't necessarily rise to the level of praising them and that by choosing their words carefully they can make certain that effort doesn’t escalate into the land of undeserved praise.
• They know that when you take note of small efforts and successes you help to improve the performance of less-than-perfect employees.
• Great managers choose their words of praise carefully so their highest performers have no doubt that they are valued. 

Everyone needs to feel valued (yes even the boss).  Recognition is so powerful because it answers that fundamental human need. Managers are in a unique position to offer -- or withhold -- such recognition, and with it the feeling of being valued.

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

Building and Managing an Employee Recognition Budget

Usually before anything else can be done to design and implement an employee incentive or recognition program, you must have a budget.  Without one you’re stuck at the starting gate ready for the race, but the gate never opens.

Over the years we have assisted many companies in building budgets.  Without spending quality time to do it, you will have to deal with obstacle after obstacle in developing the program and constantly be looking for permission to add all the pertinent strategies to make the program as effective as it can be.

Oftentimes, many parts of your needed budgets will already be embedded in the financial workings of the organization but in separate departments or disciplines.  When this is the case, you may find that you are competing with managers of those departments who want to maintain control of those budget dollars.  That can be a common occurrence.

There are common formulas and metrics for building a program budget that all have merit, such as: 

• Percentage of compensation
• Percentage of achievement levels
• Fixed budget design
• Open-ended design

 While these standard guidelines can help create a structure to track a program once approved, they won’t help you get the approval. In the end result you will also need to be able to analyze results and determine how the budget was spent.

Over the years we have seen many guidelines of how to determine budgets.  One of the best we have seen that also includes information on now to sell the budget to executives comes from Citizen Watch Company.  You can download a copy of that guideline here.

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