Recognition & Reward Program Best Practices

Recognize This! – Reinforcing behaviors in a timely way will always be at the top of my recognition best practices list.

Ascent Group recently came out with their annual Reward & Recognition Program Profiles & Best Practices. The report is well worth the investment. Highlighting just a few of the key findings:

“Reinforce behaviors and reward results. Recognize the right behaviors and communicate such that the employee’s behavior becomes a model within the work group.”

When you define the behaviors that reflect your values, your employees begin to see the values come alive in their daily work.

“Be timely, specific, and communicate! Make sure you recognize behavior and reward results in a timely manner so employees know exactly why they are being recognized.”

Recognition given at the annual banquet or performance review does nothing to reinforce in the moment precisely what it is you need them to repeat. Make sure messages of recognition are specific and reference the value demonstrated.

“Match the reward to the person and the achievement.”

Every person is different. A BBQ isn’t motivating for a person who lives in a high-rise apartment building. A gift-card to a steakhouse isn’t rewarding for a vegetarian. Let your employees choose what’s personally memorable and culturally relevant for them – from 2,500 brands and 25 million options around the world.

“Involve employees in the design and refinement of your reward and recognition programs.”

One of our 10 tactics discussed in Winning with a Culture of Recognition, involving employees – from every division, region and level – turns employees into program evangelists, ensuring rapid program adoption.

“Don’t just offer rewards and recognition for front line employees – extend the program to cover all employees in the department so the entire group is working towards the same goals.”

One of our 5 tenets of strategic recognition also discussed in our book, giving the opportunity to all to participate not only reinforces the needed behaviors and values across your entire workforce, but makes it possible to measure the understanding and demonstration of those values by employee, division, region and company as a whole.

“Look to technology to facilitate program administration and tracking.”

Doing any of this strategically – especially on a global scale – is far beyond the capabilities of an Excel spreadsheet. Take advantage of our Global Strategic Recognition solution to eliminate the administrative overhead, hassle and risk associated with old-school tactical approaches to recognition and reward.

“Measure the effectiveness and impact of your reward and recognition programs.”

Without a strong technology solution, it’s impossible to measure results. Our real-time In*telligence reports let you customize dashboards and reporting elements to deliver the status updates and success metrics your executives demand.

I encourage you to download the full report. Tell me, what other best practices would you highlight for recognition and reward programs?

Free Recognition & Rewards Virtual Trade Show * March 30-31, 2011

Do you wish you could attend more events that would contribute to your knowledge and efficacy as an HR professional, but budgets are too tight to allow for it?

Join me for the IHR Rewards & Recognition virtual conference March 30-31. The complimentary conference lets you attend live Virtual Workshop Sessions, which are eligible for HRCI re-certification credits and IHR credits. You’ll also be able to visit virtual exhibitor booths and network online with other HR professionals with the same questions and concerns you have employee recognition and rewards.

I'm excited to be presenting with Betsy Walker from Quintiles, a Globoforce customer on The New R&R: Increasing Retention Using the Power of Recognition on Wednesday, March 30, at 12:30 (Eastern).

Then I’ll be presenting again on The Future of Rewards and Recognition on Thursday, March 31, at 11:00 (Eastern).

You can register now for these sessions and any others you might find interesting. You can also learn more and visit the virtual trade show floor.

Attendees to our sessions will also receive a free excerpt from our book, Winning with a Culture of Recognition, the step-by-step guide to implementing a strategic recognition solution that is guaranteed to increase employee engagement by double digits in less than a year.

Today on Compensation Café: Signs Your Recognition Program Is in Trouble

Recognize This: If people aren’t appreciating each other, your employee recognition program is a failure.

Check out my post on Compensation Café today, Signs Your Recognition Program Is in Trouble, in which I discuss three signs you know your employee recognition program isn’t working:

1) A visitor’s reaction to the general atmosphere upon crossing the threshold is, “I’m glad I don’t work here.”

2) A consultant is the first person to make a 28-year employee feel like his thoughts and opinions are valuable and listened to.

3) Employees aren’t participating in the program, no matter how good you think your recognition and rewards program is.

In the post, I dive more deeply into the drivers behind these signs of program failure and what you – at any level in the organization – can do about it.

I also mention our own survey results, announced today:

“The first semi-annual report for the Globoforce Workforce Mood Tracker shows recognition ambivalence among today's employees in the United States. While 68 percent of those surveyed feel appreciated at their jobs, an alarming 41 percent of workers are not satisfied with the level of recognition they receive for doing good work. Indicative of both the infrequency and non-personal nature of many of today's employee recognition programs, 43 percent of U.S. workers had not been recognized in the past three months. More importantly, a startling 55 percent felt they were not rewarded according to job performance, indicating a critical disconnect between recognition and performance.”

These results parallel findings from a SmartBrief on Workforce poll earlier this month in which only 15% agreed their incentive program is effective.

Click over to Compensation Café and let me know -- What signs of a recognition program in trouble have you seen? What are your recommendations to fix such a program?

Global Integration of People Systems Delivers More to Your Bottom Line

Recognize This: Global integration of talent systems delivers 38% more Return on Equity (ROE).

Why should you care if your talent management systems and programs align with your company values and strategic objectives? Simple – you’ll see a much higher return on equity (ROE).

Ernst & Young reported in the January 2011 issue of Workspan Magazine (“Think Global, Act Global,” membership required):

“Companies that aligned their talent management programs with their business strategy enjoyed a 20% higher annual return on equity (ROE) over a five year period than those that did not. Returns were even more dramatic among those companies that integrated talent management programs, processes, and IT systems/processes on a global scale. These companies experienced an ROE over five years that was 38% better than those that did not.”

That’s precisely why we strongly advocate in our strategic employee recognition programs that customers:

1) Align business objectives and company values with reasons for recognition to make these come alive in the daily work of employees

2) Launch their programs to ALL employees in ALL global locations simultaneously, both to prevent any employees from feeling like “second-class citizens” if they’re not included in the initial launch, and to ensure program consistency on a global scale

3) Integrate recognition with performance management systems

Not only will you gain a much more complete and accurate understanding of how well your employees know and contribute to strategic objectives, you’ll also dramatically increase your return on equity.

Not a bad reason to go global and go integrated.

Do Amazing Things * Overcome Stereotypes

Recognize This: We all have the capacity to do amazing things. We need the desire – and sometimes courage – to do so.

Chris Ferdinandi, Renegade HR blogger, has done it again. For the second year in a row he has published a strong compendium of advice from HR experts on how to be amazing in 2011.

I’m honored to have my contribution on “Overcoming Stereotypes” included in “Do Amazing Things” this year. An excerpt:

“One [stereotype] we often hear in our line of business is: ‘People in China don’t want to be recognized individually.’ A client of ours proved this false simply by giving it a try. When implementing a new, first of its kind, global employee recognition program to all 33,000 of its employees, HR leaders knew the large contingent of employees in China couldn’t simply be ignored. … After program launch, the leadership team was pleasantly surprised to discover China had the fastest rate of adoption for greatest number of employees of the new employee recognition program.”

Other strong contributions from HR pros I respect include:

• Fail More (Chris Ferdinandi)
• Simplify, Simplify, Simplify (Lance Haun)
• Values, Not Words (Ben Eubanks)
• Break Out of the Boundaries (Paul Hebert)
• Become the Collaboration Leader (Steve Roesler)
• Be Curious (Ann Bares)
• Shadow Someone (Trish McFarlane)

I encourage you to read the eBook for great additional advice and thought leadership. What would you add as your recommendation to Be Amazing in 2011?

Why Are You Here?

Recognize This: People want to be part of something meaningful – something larger than themselves.

Have you ever used one of those “you are here” maps, like they have in a mall or city centre?

Generally, these are helpful, but I’ll never forget the time I was in a rush to find a particular store. I located the map, quickly found the store I wanted, but then realized there was no “you are here” reference.

I knew where I wanted to go, but because I didn’t know where I was in relation to that, I didn’t know how to get there.

I think the same is true in the workplace. Many companies invest a good deal of time and resources communicating to employees where they need to be going, but spend little to no time on where they are.

Why do they (why do you) come to work every day? I hope it’s more than just a paycheck. What’s the greater purpose you’re contributing to? Gautam Ghosh puts it this way:

“Personally I think every human being wants to be part of something larger than himself or herself. An organization should look at goals that excite even the most world weary cynic and say ‘I am part of something meaningful. Something larger. Something beautiful.’”

Why are you here? What are you part of?

"Phased" Rollouts of Global Employee Recognition Programs Fail

Recognize This: ALL employees matter, regardless of geographic location.

What’s your general opinion of the employees in your company? If you have multiple locations, do you feel the same respect and appreciation for those in another office, another county, another country? If you’re in HR, do you work to make sure all employees, regardless of location, are treated equally?

I cannot wrap up a series of posts on the second critical tactic for creating a strategic recognition program – Involve Program Participants and Invite Their Input – without discussing the makeup of such a team.

You must consider the widely divergent needs, expectations, and cultural differences that are natural in a multi-location organization. This is compounded a thousand-fold in global organizations. Including representatives from each location in the design phase is critical.

But it’s no less critical in roll-out. If you do a “phased” roll-out of a global program, many will be left feeling like second-class citizens.

It doesn’t matter if you included representatives from the Australian, Chinese and Indian office in the design phase if you plan to roll out the program first to the country of your headquarters, and then eventually to outlying offices or divisions. Truly global programs demand truly global, synchronous deployments.

Have you ever been promised a new “global solution” only to receive it months to years after the initial deployment group? What was your reaction?

Employee Recognition ROI at KPMG

Recognize This: The emotional impact of recognition is huge compared to the low monetary investment.

Last month I had the pleasure of participating in a webinar, Recognition the KPMG Way: Driving Employee Engagement and Success, with Sara Turner, UK head of employee benefits and wellbeing, KPMG. Sara made quite clear the same point I’ve been making this week about the need to Involve Program Participants and Invite Their Input  when creating a strategic recognition program:

“The key is not to do this in isolation. Look how recognition links to other areas of engagement in the organization and consult with stakeholders – decision makers and users— to make sure what you’re designing will really resonate. You need to take in account how other people feel.”

The ROI of Recognition

The results experienced at KPMG have been phenomenal. They increased the number of award recipients year over year by 25% without any additional spend. But the emotional impact is even more powerful. Again, quoting Sara:

“What you get with recognition is a really emotional response. This is quite different from any other area of reward. What really sets recognition apart – and this comes through the feedback from the people – is that it’s unexpected. Though the monetary value is low, the impact is really huge.

“In monetary terms, recognition is so much less expensive [than other reward systems], but what you get is this emotional gut response from people who are overwhelmed, happy and excited when they get an award. People are so engaged because someone has appreciated the extra effort they’ve gone to and taken the time to make sure they acknowledge it and that others acknowledge it as well.”

Did you miss the webinar? Listen in here.

Have you ever been “overwhelmed, happy and excited” by being recognized in your workplace? Tell me the story. Better yet, how often have you felt that way?

“The Power of Post-Recession Recognition”

I’m honored to have an article I wrote included in last month’s issue of Workspan magazine: "The Power of Post-Recession Recognition." Here’s a key excerpt:

“The survey showed 45% of respondents from organizations that had a recognition program before the recession said investment in recognition had decreased since the start of the downturn. Organizations that decreased spending on their programs saw significant negative impacts from their actions, including decreased employee engagement (59%). After experiencing such impacts, 42% of organizations that cut spending during the downturn now say they plan to increase spending in 2010. …

“Looking ahead, the respondents who did not have a recognition program before the start of the recession are considering starting one within the next year, most notably focused on employee engagement, making the case that ignoring employee recognition in a downturn is a hard lesson learned. Furthermore, perhaps keeping in mind some of the questionable business practices that hurt companies at the beginning of the recession, many respondents indicated values-based recognition will be a clear priority. The idea behind values-based recognition is ensuring that employees display the right behaviors in achieving company goals. Reinforcing an organization’s beliefs will also help businesses reinforce their employer brand, which will benefit them as they work to retain employees and attract new talent.”

Click through for a full analysis of the results of our survey and the six recommendations to properly calibrate strategic employee recognition programs for the economic realities of today.

Leveraging Internal Social Networks * Thanks HR Ringleader!

Our CEO, Eric Mosley, had the privilege earlier this week of speaking at The Conference Board's 2010 Senior HR Executive Conference on "Leveraging Social Media."

We were honored that Trish McFarlane, author of the outstanding HR Ringleader blog, live-tweeted from the session and then wrote a post on "The How and Why of Leveraging Internal Social Networks."

The power of social in the workplace isn't just finding ways to use Facebook or LinkedIn to your advantage with your employees. Rather, the power lies in learning from these (and other) networks and applying the best strategies and tactics to uncover your internal social networks, tracking those relationships and, critically, feeding and building them through recognition.

A couple of quick excerpts from Trish's post, but I encourage you to click over, read the full post, and join the discussion there.

Eric Mosley, Chief Executive Officer of Globoforce presented one of the finest sessions I’ve seen all year.  I’d like to share some of the items he covered regarding the internal social networks in organizations and the impact of tracking the relationships.

Globoforce sees the benefit of tracking and identifying the internal social network and are doing so through social graphing.  It allows the leaders to see who the influencers are and which employees are breaking down the silo barriers. 

Eric talked about how the size of the organization can impact these relationships.  Imagine you have 3,000 employees or even 30,000.  It is not possible to share information easily among this number of employees in an efficient manner.

If you believe like I do that influence does not come from holding a specific title and that organizations need to do a better job of identifying their influencers, I encourage you to connect with Globoforce.  They are also doing amazing things with regard to identifying recognition via social graphing.

How are you using (or wish you could use) social to your advantage in the workplace.

CEO Values Critical to Employee Loyalty and Motivation

Let me ask you a question. How well do your senior leaders model the behaviors they request of their teams?

SmartBrief on Leadership recently asked just that question in a poll on their site (results at right). Sadly, less than 10% answered, “all the time.” The greatest percentage, 40%, said, “most of the time, but have their moments when they don’t.” And the next greatest answer at 32% said, “sometimes, when it’s easy to walk the talk.”

It’s that slippage – those “moments when they don’t,” those “when it’s easy” efforts – that’s killing employee loyalty and motivation according to research reported in Knowledge@W.P.Carey (the School of Business at Arizona State University):

“Mid-level managers are likely to rally around their company only if their CEO truly values the interests of the organization and is not motivated primarily by self-interest, according to the study by W. P. Carey School of Business Management Professor Anne S. Tsui, Ping Ping Fu of the Chinese University of Hong Kong, Jun Liu of Renmin University of China, and Lan Li of Chinese Entrepreneur Survey System. …

“In companies in which chief executives with transformational leadership behaviors valued above all the interests of the company and people -- both inside and outside -- middle managers demonstrated strong commitment to the companies and said they were unlikely to look for jobs elsewhere. But where transformational CEOs placed the highest values on personal fulfillment, the middle managers below them were less committed to the firm and more likely to seek positions outside the company.”

I’ve written before about the need to help employees align their personal values with the company values, and this never more true or necessary than in the CEO spot. A CEO who leads the company from a place of transparency, directed by his or her own personal values to the extent that those values permeate the organization to guide and direct its success as well, is the CEO whose team will remain the most loyal, most motivated and most productive in delivering what the CEO expects and needs for company success.

I’m lucky enough to have spent the last 10 years of my career working for such a CEO, Eric Mosley, who is also the co-author of our recent book, Winning with a Culture of Recognition. Eric built Globoforce on the same principles and best practices we share with our clients – frequently, timely, specific and meaningful recognition and appreciation of people when they demonstrate our company values and contribute to our success.

What about you? Does your CEO lead from a place of honest, consistent alignment of personal values with the values of your organization? How does that affect your loyalty to the organization?

A Culture of Recognition and Loyalty

In my last post I wrote about the different kind of cultures that can arise in an organization.

So, what kind of culture works best? That depends on your goal. If all you care about is cranking out widgets and aren’t particularly concerned about the high-turnover of employees who perhaps are not passionate about widgets, need some challenge in their work, or can’t abide another day of “meaningless” work, then worrying about your corporate culture is probably not high on your priority list.

But if you’re concerned about employee loyalty – keeping those employees who are committed to the success of your organization and that of your customers – then your best cultural option is recognition. In fact, recent research by Monster (as reported in WorldatWork) found that “being recognized for good work” consistently ranked high as a reason why employees would remain loyal to an employer.

"Globally, having a great boss and co-workers, challenging/interesting work and gaining recognition all recorded results at 20% or above, demonstrating that, for many workers, there is more to their loyalty than financial rewards.

"Respondents in India (31%), Italy (27%) and Ireland (24%) rated gaining recognition as the foremost reason for them being loyal to their employers."

Clearly, employees need and want recognition for their efforts. It’s easy and cheap to give and can save you millions in turnover expense.

I would also like to take this opportunity, in honor of tomorrow’s American Thanksgiving holiday, to give thanks and express gratitude to my colleagues and team members who make my work more fun, more interesting, and certainly more exciting every day of the year. And to you, the readers of this blog, thank you for your insights that have continued to educate me and contributed to my growth as an employee, a manager, and most importantly, a person.

The Benefits of Global Consolidation & Consistency

How disjointed are your HRIS systems? We’ve found the larger and more global an organization, the more likely multiple, unconnected systems are in place, whether they are full-blown HRIS systems or employee recognition programs. That doesn’t means smaller organizations are immune. Any company with more than office likely has disjointed systems, if not incongruent customs within offices or even between teams.

TowersWatson and WorldatWork recently issued research showing:

“As economic and business conditions improve, employers are restoring some of the losses in reward programs and addressing their EVP. They are also rethinking their long-term business, talent and reward strategies, developing greater integration and consistency within and between programs, prioritizing their investments.”

Focused on talent management and total rewards, the study focuses on the benefits of “introducing organization-wide consistency in reward and talent management programs” that offer a cohesive, easily comprehensible employee value proposition to all employees, regardless of where they are based.

“Today’s increasingly global organizations are balancing the need for local variation in reward and talent management practices with the benefits of global consistency.”

According to the research, key business drivers for global consistency in reward and talent management programs are:
• Alignment
• Cost management
• Efficiency
• Quality

Those are precisely the reasons for (and benefits of) our global customers pursing globally consolidated strategic employee recognition programs. Some companies found they had opened themselves to great risk by not fully knowing or tracking where recognition was taking place, largely by well-meaning managers who would give an employee a “recognition gift” and then put the cost through an expense report – untracked and untaxed according to proper country requirements. This doesn’t even bring into consideration the dramatic savings possible (up to 50% at our clients) through efficiencies gained through consolidation. As the research cited above says:

“Organizations with globally consistent programs are more effective. There is a strong relationship between global consistency and effectiveness.”

If you’re considering expanding, adopting, or consolidating your employee recognition practices across multiple countries, or even multiple offices, be sure your provider can deliver the results you want on such a scale.

Stop Creating Second-Class Corporate Citizens

On Monday this week, I wrote about Symantec’s incredible success with peer-to-peer recognition programs that span departments and teams. But the only reason Symantec is able to allow employees from any department to recognize each other is because they launched their employee recognition program globally – to all employees – on the same day. They didn’t do a “staged roll-out” to the employees in the US first, as so many solutions usually are – which leaves employees outside the US feeling like second-class citizens.

But the benefits of going global don’t stop at peer-to-peer recognition capabilities. The cost savings and program governance abilities are greatly enhanced, too, as Bill McCullough, senior compensation analyst at Symantec explained in this recent Workforce Management article:

Companies with operations scattered around the world believe centralized reward plans reach more people and their value can be assessed more easily. Multinationals also reap financial benefits from a global approach.

“Our employees love it,” says Bill McCullough, senior compensation analyst. “Now, approximately 65 percent of employees are touched by the program, and it has impacted our employee satisfaction scores.”

Now, with its centralized program, Symantec says it can track the return on investment in employee recognition, as well as use job performance metrics to ensure that outstanding workers receive the appropriate kudos.

As discussed in more depth in our upcoming book, Winning with a Culture of Recognition, these results strongly reflect Symantec’s ambition for their recognition program, including: “One global strategic recognition solution” and “Local impact and relevance for all employees globally.”

What’s your employee recognition strategy say about your company and what you really think of your employees?

Without Peer-to-Peer Recognition, You’re Just Swimming Upstream

Do you have some kind of an employee recognition program in your workplace? What level do you offer? The bare minimum of years of service or performance-based annual review recognition? Middle-of-the-road manager-to-employee only schemes? Or do you go top-of-the line with peer-to-peer recognition in which employees are actively encouraged to notice and appreciate the behaviors and actions of their colleagues that contribute to team and company success.

If you consider employee recognition to be a key factor for increasing employee engagement, performance and productivity but are not enabling peer-to-peer recognition, then you are missing out on at least 50% of the tangible benefits you could realize from recognition.This is something we talk about in our soon-to-be-released book, Winning with a Culture of Recognition, in which we make the point: “Peer-to-peer interactions through the recognition program sup¬port the values promoted by recognition. Exceptional employees are recognized by the group, and the group looks to them for informal guidance.”

This article in Human Resource Executive highlights this well:

“Peer-to-peer recognition programs are among an employer's most powerful, low-cost tools for reducing turnover, improving productivity and boosting employee morale. Unlike gifts through traditional recognition-and-rewards programs, peer acknowledgements are often unexpected, selfless and inspirational. Employees are usually so touched that they end up forming strong bonds with co-workers and become more motivated to do a better job.”

What’s this mean in the real world? The article goes on to explain the success our customer, Symantec, has had with peer-to-peer recognition. Jennifer Reimert, senior director of global compensation, explains:

“‘It takes a lot of people to get a product launched from development to marketing to sales. There's such an acknowledgement when somebody outside your department recognizes you. When they know you value and acknowledge what they're doing, they'll work harder for you.’… ‘It's another vehicle that immediately rewards behavior,’ says Reimert, adding that employee engagement jumped 14 percent after the program's first year. ‘It's definitely enhanced the employee experience.’”

So what’s your approach? Do you let employees formally recognize each other (which adds the benefit of employees knowing their peer appreciation will also be seen by the boss)? Or do you think managers alone have the right to say “thanks”?

“The Way We’ve Always Done It”

Last month, Laura Schroeder wrote a great post on Compensation Café on tailored rewards and the realization that one size doesn’t fit all. As Laura points out: “Various research shows that people are motivated by different things at different times, depending on a variety of personal and demographic factors.”

Pop over and read Laura’s full post. She offers five solid tips for moving towards tailored rewards. It’s her last statement of the post that got me laughing, however:

“I also don’t recommend tie pins.”

I laugh because I’ve heard that more than a few times from companies we consult with: “But we’ve ALWAYS given tie/lapel pins. It’s a critical part of our program!” As I’ve written about before, ask just about any employee who ever received one, and they’ll fumble to remember which junk drawer the pin ended up in.

But the important lesson here is that any discussion of total rewards is irrelevant if you don't also discuss the meaningfulness of those rewards. "The way we've always done it" may mean something to the 30-year employee in Marketing, but absolutely nothing to the 1-year GenY rockstar in R&D. And vice versa. BOTH perspectives are equally important, and even that is vastly simplifying -- it's not easy to juggle the "perceived motivators" of a 10 person small business, much less in a 30,000 employee multi-national corporation.

And that's why the discussion must come down to (and thanks to Dan Pink and others is beginning to) true motivators of autonomy, mastery and purpose. Every employee is motivated by managers who remove obstacles from their paths at work, who listen to them, and help them achieve what is meaningful for them in the workplace.

One final thought. When I made similar comments to Laura’s original post, she asked, “What if these three simple criteria were added to or even replaced the manager evaluation form at every company?”

What if, indeed.

Part 5: Catalog Providers Hate Gift Cards because Your Employees Love Them!

In my final look at why employees love gift cards in a reward program, we saw how, with the introduction of gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Employees tell us…

“I love that gift cards are GREEN and SOCIALLY RESPONSIBLE, too.”

Yes, you read that right – employees do play back to us they like that gift cards have an environmental and socially responsible dimension, too. How is that?

Consider this. A merchandise catalog company – Incentive Boulevard, Inc – is based in the heart of the US with another office in the UK. As a rewarded employee in, say, China, I select my reward – let’s say it’s a portable BBQ Grill. What’s the classic journey of that grill?

1. Item Manufactured in China
2. Shipped to the Incentive Boulevard Warehouse in the USA or UK
3. Item Shipped from the USA or UK back to employee in China!

Compare that to gift cards:

1. Item manufactured in China
2. Shipped to local department store close to employee in China. Employee collects locally.

I know there are thousands of permutations of how this could play out, but the basic premise is that a second shipping trip is always required to get the item from Incentive Boulevard warehouses – even sometimes back to the very country where the item was manufactured to begin with. This creates a lot of carbon footprint! Or think of it this way. When the price of oil went through the roof in Summer 2008, the surge in shipping costs was the equivalent of a 9% tariff on trade. If you cut the costs of shipping merchandise around the world, you not only cut your costs, you spend more of your recognition and reward budget where you intended – on your people – and you eliminate the eco-expense as well.

Now let’s consider the social impact too. I am that employee in China – yes by picking an item of merchandise made in China – I support local manufacturers, but I am also supporting employees in Incentive Boulevard warehouse thousands of miles away in the US or UK. What would I prefer? How about spending my reward, yes, on a locally manufactured item, but also purchased from a local merchant, with local employees who understand my specific needs.

Or how about spending my reward at a local spa, or in a local restaurant or cinema chain, or giving my reward to a local charity. All of these are possible when local gift cards are used – I get to enjoy and use my reward while also making an economically progressive decision to support my local economy and the local employees who are my neighbors. Don’t get me wrong – I am 100% for international trade; however, the gift card route allows many thousands of local economies to benefit from your program, not just the one of two where Incentive Boulevard has their warehouse.

More food for thought – do you think your employees care that your reward options are Green and Socially Responsible?

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

Part 3: “I love that they are LOCAL to where I live, not one size fits all."

Part 4: “I love BEST VALUE for my money, not being price cheated.”

Part 4: Catalog Providers Hate Gift Cards because Your Employees Love Them!

Continuing my look at why employees love gift cards in a reward program, we saw how, with the introduction of gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Employees tell us…

“I love BEST VALUE for my money, not being price cheated.”

Let’s face it. We’ve all had this experience of selecting an item from an “Incentive Boulevard” catalog. I spotted a portable BBQ last summer in my bank card’s loyalty program catalog. Great! At least it was something I liked and needed, a portable gas grill, for 30,000 points or, as I calculated, $300 in real value. I took it! Only later that night, a simple price search online revealed at least 10 major stores that retail the exact same BBQ from $199 to a maximum of $260. What’s up? Am I a sucker? I felt cheated –exactly the opposite feeling to what the designers of the bank’s loyalty program were trying to encourage.

Is this how you want your employees to feel when they get your company recognition award? Of course it’s not! Yet this is exactly what continues to perpetuate today through the old school practice of using points interlinked with hyper marked up items that is rampant among catalog providers.

Why is this the case?

Here’s how it goes. You want an employee recognition program with a rewards budget of about $100 per head. The catalog companies say great, we’ll do that for exactly your $100 budget. Perfect … but then the games begin! You need to know how to play the shell game now. Before you know it, between operating fees, fulfillment fees, shipping costs, communications, customer service costs, technology support fees and “a little margin” are built in, your employee is only going to end up with $69 of that $100 you had in mind.

Not a problem the catalog companies will tell you, because it’s all about “perceived value pricing” to the employee – so long as the employee thinks the item is worth $100, everyone is happy and your employee essentially pays for your program costs. We’re both winners! Right?

Wrong! This approach worked pretty well for decades, from about 1901 to 2001. But now “perceived value pricing” has a real, substantial problem that is not going away soon – the internet – and the possibility for the “perfect information” it brings to your employees. Your employees are savvy shoppers, and they will check the price of every item they select from any catalog. If, like me, they feel cheated and over-charged, you will create exactly the opposite motivational effect to what you were hoping for.

But you might say, our catalog company offers a price guarantee! We are assured we get all the items at MRSP or less. This is the shell game again my friends! Ask the wrong question, and you shall get the wrong answer. Perhaps you asked the cost to your company of certain items – yes, it’s $69 cost, same as Amazon sells the item for. This sounds good. But hold on. You should have asked: what’s the cost to my employee, after all of the fees and charges have been factored in? Ah, well that’s 10,000 points or $100 of cost to your employee, for an item that they soon know is only worth $69. That’s why employees tell us using catalogs leaves them feeling price cheated. More especially, they feel your company is being cheated too. That’s also exactly why they love gift cards – a $100 value is clear and transparent, I go shopping myself, and I get exactly my $100 in value.

Beware my friends, the old tried and tested techniques from 1901 to 2001 need a rethink, unless you plan on training your HR support team in taking employee price complaints.

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

Part 3: “I love that they are LOCAL to where I live, not one size fits all."

Part 3: Catalog Providers Hate Gift Cards Because Your Employees Love Them!

Continuing my look at why employees love gift cards in a reward program where we saw how if you introduce gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Customer employees tell us…

“I love that they are LOCAL to where I live, not one size fits all”.

I know it’s hard for program managers to evaluate which are the best rewards to offer employees, so I shall try and keep the comparison on this employee reason as straightforward as I can.

Basically, I recommend you think about recognition program providers as behavior consultants, technology solution providers and reward vendors. That’s as true of us as it is of our competitors. A good way to look at classic merchandise catalog reward vendors is to think of them as a store, with a storefront called, say, “Incentive Boulevard.” Behind this storefront they are offering their merchandise items that they have purchased, sourced, and stocked in their warehouse facility, fork lift drivers and all! They are in effect merchants, and some have even got manufacturing facilities where they make some of the items they sell (e.g., jewelry). This model has certain built-in characteristics:

• Stock of items available is limited to their warehouse capacity.
• Stock rotates about 3-4 times a year.
• Their buyer team of 2-3 people is selecting what items to stock.
• Cultural sensitivity is covered by merchandise groupings for like-minded regions.
• Merchandise items are shipped by courier around the globe.

The most common descriptor I hear from employees for this approach is the “One Size Fits All Catalog”. Much like that T-shirt we’ve all picked up at trade shows that is just not meant to fit you!

Now, compare this traditional catalog approach to our gift card experience delivery model. Yes we are reward vendors too, but the key difference is that we are not selling our merchandise – rather we are opening the way for your employees to go select their reward from an enormous portfolio of famous-name merchants that are respected brands in every country -- famous department stores, restaurant and cinema chains, sports stores, travel providers, local online retailers, and local charities among other all-local choices, too. So employees choose LOCALLY an aspirational reward – at what I call street level - from the millions of items suited to their local culture. Let’s compare this model to the points bulleted earlier:

• Stock of items available also limited to the items in stock. But how limited in stock is Macy’s or Kohl’s, Marriott or Travelocity, Pottery Barn or Amazon.com – just to name a few. Globally, stock exceeds 20 million possible reward experience choices.
• Stock rotates every week.
• The buyers are professionals catering to the needs of real consumer populations locally. These local buyers know what an employee in Beijing wants, because they are LOCAL citizens in China, and not based in Cincinnati!
• Cultural sensitivity is built-in and ensured in ALL countries, as merchants are LOCAL.
• Bulky items are NOT shipped, but locally selected, locally collected, and locally consumed.

My advice – THINK GLOBAL, BUT THANK LOCAL. By adopting a local-level reward approach you show respect for the local employee, respect for their local culture and respect for their ability to choose a reward that is truly motivating to them – locally.

Now what is more motivating than respect?

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

Part 2: Catalog Providers Hate Gift Cards Because Your Employees Love them!

Continuing my look at why employees love gift cards in a reward where we saw how if you introduce gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

We’ve 1.7 million employees worldwide using our solution today, a sizeable population, and one that we survey frequently and hear many comments from. When it comes to gift cards what do we hear from employees? Well, employees tell us they love gift cards because:

• I love REAL CHOICE, not pretend choice.
• I love they are LOCAL to where I live, not one size fits all.
• I love BEST VALUE for my money, not being price cheated.
• I love that gift cards are GREEN and SOCIALLY RESPONSIBLE too.

Using the verbatim survey comments from employees, let’s look further at each of these, as employees explain their reasoning, often better than I will.

I love REAL CHOICE, not pretend choice:

“In our previous catalog program, we’d a pretend choice of probably a thousand items. I always felt like I had to pick something that I didn’t really want, just to get something, anything really!”

“Now, I actually enjoy my reward! I can shop at my local department store in Paris, or take the family to a local restaurant. Much more choice – everyone is catered to.”

“Now I get rewards I love!”

“I really want the latest versions of electronics items, I was nearly always disappointed not to find them in the old catalog, now I can shop online at Amazon, or go to my local electronics store."

In a global population of employees representing all generations from Y, X, baby boomers, close retirees, across many different geographies and different cultures too – what catalog of a thousand items, or even twenty thousand items could possibly cater to this wide, diverse group of consumers and their varied needs? For that matter what global retailer has ever done this? Is there a global retailer that succeeds in catering to all consumers worldwide? Not even close! There is no single global retailer like this. Oh, except one – your local merchandise catalog company – that claims to be able to cater to a worldwide employee base, when no single world retailer has yet done this. Really think about that one, can their claim be true?

Some employees are conservatives, some are hedonists, for some a great reward is a watch, but for others it’s a Def Leppard music collection, or a fishing rod; for some of our Chinese factory employee users it’s a chance to visit high end bakery store Ganzo for special cake treats.

REAL CHOICE is about providing your employees the opportunity to get a reward that is personal, meaningful to them, and meets their view of what is inspiring to get, and not – with all due respects – your view! That’s exactly why we have built over the past decade the world’s largest portfolio of gift cards from thousands of local famous-name merchants, respected brands in every country, famous department stores, restaurant and cinema chains, sports stores, travel providers, local online retailers, and local charities among other choices too, so that your employees have REAL CHOICE from the millions of items suited to their local needs.

I’ll be returning to this topic next week…more soon.