All Employee Program Guidelines

As noted in the October newsletter, current economic conditions are presenting serious challenges to incentive marketers. Sales incentive budgets have been impacted by the September 11 attacks and by what is finally being acknowledged as a recession. As a result of these marketplace events, more and more companies are looking inward to their employees as a resource for reducing costs and improving the bottom line. Incentive budget priorities are shifting from sales-focused incentives to cost-containment and productivity improvement initiatives, or employee incentive and recognition programs.

There is no single best formula for constructing and implementing employee incentive and recognition programs. There are, however, some helpful guidelines and strategies that, when applied, have consistently yielded positive results-driven programs.

Here are the core elements that you should consider when designing, presenting and implementing employee incentive or recognition programs:

Base earnings: Employees should be offered the opportunity to earn awards consistently throughout the program for achieving a core or primary program performance objective (ie: reduce accidents, submit cost-saving suggestions, improve quality standards). Generally 50% or more of your awards budget should be dedicated to the base earnings component of the program.

Team earnings: Most companies will have quality teams, work groups, supervisory groups, shifts, production line teams or some form of team structure that can be used to reinforce the most important performance objectives. Team goals can be identified and awards or award points issued based on team performance. Including teams not only reinforces goals, it will enhance the team experience, plus the additional award earning opportunity will enhance the overall motivational impact of the program. Team awards can account for approximately 10-15% of your overall program budget.

Discretionary awards: Most employee incentive and recognition programs are based on quarterly progress and results. Performance may be reported monthly but award issuance is quarterly. In general this is not detrimental to the program, however; the motivational impact of the program can be strengthened when you include discretionary or instant award opportunities. Instant win game cards, bonus point checks or certificates are all ways that discretionary awards can be presented. Managers or supervisors who have daily contact with employees and the ability to immediately recognize and reward someone for a positive performance should present these awards. This not only actively involves managers and supervisors, it provides the "instant" reward that is the most effective way to positively impact an individual’s performance. Discretionary awards can be included as a "fixed" or closed-end budget element and should account for 20-25% of your overall awards budget.

Bonus options: Bonus options are like performance catalysts. Enrollment bonuses, fast start bonuses and special activity bonuses create an opportunity to foster a greater level of program participation and activity. Monthly, quarterly and annual top performance bonuses recognize the best performers and provide an incentive to stretch good performance to a level of outstanding achievement. Bonus options can also be built using a closed-end budget and can account for 5-10% of your awards budget.

Supervisor and Manager awards: Including supervisors and managers is a must. In most employee recognition and incentive programs these individuals are responsible for implementing, managing and promoting the program on a daily basis. They have the most direct and potentially greatest impact on how the program is communicated and presented to employees. Presenting override or cumulative performance rewards to company supervisors and managers based on their performance recognizes and insures their active participation and support of the program.

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