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Employee Reward Programs: The Formula for Successful Rewards,[object Object],Presented by Matt Lundy,[object Object],Rewarding Events & Incentives,[object Object]
INCENTIVE Definition,[object Object],[object Object]
That which incites, or has a tendency to incite to action.
An additional payment (or other remuneration) to employees as a means of increasing output.,[object Object]
Special notice or attention RECOGNITION  Definition ,[object Object]
RECOGNITION,[object Object],[object Object]
Occurs after the factINCENTIVES,[object Object],[object Object]
Occurs before the factINCENTIVES vs. RECOGNITION,[object Object]
[object Object]
“There is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and financial success”The Science Behind Incentives,[object Object]
Maslow’s Hierarchy of Needs,[object Object]
The Bell Curve,[object Object]
Productivity Gains,[object Object]
[object Object]
85% of employees feel overworked and underappreciated (Dr. Robert Cooper, 2005)
75% of employees say they could be more effective in their jobs (Public Agenda Forum, 2004)
70% of unhappy customers abandon vendors because of poor service(Forum Corp, 2003)NUMBERS THAT MATTER,[object Object]
[object Object]
Customer Service
Safety
Health & Wellness
Process ImprovementAny aspect of your business…,[object Object]
What you ,[object Object],re-enforce is,[object Object],what you get,[object Object],Incentive RULE # 1,[object Object]
STEP 1: Identify Objectives ,[object Object],STEP 2: Define Target Audience ,[object Object],STEP 3:Build Your Budget ,[object Object],STEP 4: Develop Program Structure ,[object Object],STEP 5: Designate Program Administrator ,[object Object],STEP 6:Select Rewards and Presentation ,[object Object],STEP 7: Promote The Program ,[object Object],STEP 8: Track The Program ,[object Object],STEP 9: Distribute Awards and Celebrate Success ,[object Object],STEP 10: Evaluate and Communicate Results ,[object Object],The Process,[object Object]
1) Incentive programs do not reward,[object Object],expected or average performance.,[object Object],2 ) You only reward achievement  of,[object Object],specific, measurable goals. ,[object Object],Have to measure ,[object Object],Have to be specific,[object Object],Budget Foundations,[object Object]
Upfront Costs,[object Object],Program Launch Event,[object Object],Communication Pieces, mailers/posters,[object Object],Promotional items,[object Object],Dedicated website,[object Object],Ongoing Costs,[object Object],Program Administration,[object Object],Ongoing communications ,[object Object],Rewards,[object Object],More than Rewards,[object Object]
An incentive program is funded by extra profit from increased sales or cost savings. ,[object Object],In essence, you are trading a portion of the additional profit that you currently do not have.   You are giving up a piece of future earnings that you hope to achieve.,[object Object],What does self-funding really mean? ,[object Object]
Look at your best employee in that job/role,[object Object],What makes them your best? ,[object Object],What are the measurable characteristics?,[object Object],That “best” person should be your highest rewarded employee in a well designed program. ,[object Object],Not sure how to Quantify?,[object Object]
What you ,[object Object],re-enforce is,[object Object],what you get,[object Object],Incentive RULE # 1,[object Object]
Objective vs. Subjective,[object Object],Objectively. . .,[object Object],Company goals  ,[object Object],Payout rates  ,[object Object],Return on investment  ,[object Object],Budgetary constraints  ,[object Object],Subjectively . . .  ,[object Object],Is the earning opportunity significant enough to generate the desired results?  ,[object Object],Is the program the right length to achieve the goals and hold participant interest? ,[object Object]
Open End ,[object Object],	1) Unknown number of potential winners,[object Object],	2) Anyone who “hits the goal” gets rewarded,[object Object],	3) Hard to budget for / maximum impact,[object Object],Closed End,[object Object],	1) Known number of potential winners,[object Object],	2) Only top “10” get rewarded,[object Object],	3) Easy to budget for / less impact,[object Object],Open End vs. Closed End,[object Object]
Dilbert,[object Object]
1) What do you expect to attain in incremental dollars? (This is from increased sales, improved safety (lower insurance, time loss etc.),[object Object],2) Assign a percentage of that to pay for the incentive program; 10 - 40%, depending on the program.,[object Object],3) Of that, a traditional breakdown would be 5-10% for administration, 10-20% for communication and launch, and the remainder for rewards.,[object Object],Nuts & Bolts,[object Object]
If your program is longer than six months, reward potential should represent between 6% and 10% of a participant's salary.,[object Object], If your program is shorter, say 60 to 90 days, consider providing participants with the opportunity to earn rewards valued between 3% to 5% of their salary,[object Object],Traditionally…,[object Object]
[object Object]
You balance the reward vs. the increased productivity or cost savings
Good programs pay for themselves
No achievement of goals = NO payout
The budget is already there in most cases, it’s just going to an insurance company or lost in low productivityThe “Cost” of Incentives,[object Object]
Some art, some science,[object Object],Look at your demographics, what works for your culture and audience?,[object Object],If you ask people what they want they will tell you 100% of the time - they want money.,[object Object],They say money, because they really want  the choice of how to spend it.,[object Object],Picking the right rewards,[object Object]
[object Object]
Cash is thought of as compensation and is spent on necessities. 

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