RNN is about the art and science of rewards in the new world of engagement. Back in the process-oriented business climate of the 20th century, rewards & recognition were used by companies as carrots to motivate people. With almost no science – and often with little or no ROI measurement – companies would spend millions of dollars on different types of incentive and reward schemes. Today we know so much more, not only about what engages people to sustained action, but also about the proper role of rewards & recognition in the overall context of engagement.
At the latest Rewards & Recognition Expo, held in Denver April 14-16, almost 100% of the attendees and exhibitors we surveyed said they believed that engagement is emerging info a formal field that will have a positive impact on the use of rewards. And we believe they’re right. Change creates opportunities, but it also creates challenges for those who can’t embrace it. Here’s how we believe the engagement field will affect the use of rewards & recognition over the next few years.
Science. Most corporate practitioners still have little or no knowledge of the extensive research now available on the use of non-cash rewards, and many (if not most) continue to harbor nothing more than vague notions about the science of rewards. Among the most prevalent of these: People prefer cash to non-cash rewards. The point is irrelevant. What matters is what the organization is trying to accomplish with its use of rewards: compensate or recognize people? Obviously, cash is the best form of compensation in most cases, but it’s a terrible way to recognize people because it’s easily forgotten and creates little emotional value. Another common fallacy: Incentive and recognition rewards cause unproductive competition. This is often true, but only because most companies don’t know how to properly structure programs so that they foster teamwork…which leads to the next point.
Program Design. While at Motivation Europe Live recently, I heard many rewards suppliers say that Great Britain’s engagement movement, which appears more advanced than ours, has increased the use of rewards & recognition. But as one exhibitor noted: “Engagement is creating opportunities for rewards, but only after the overall issue of engagement has been addressed.” This is another way of saying that program design is critical to success – that is, specifically identifying the levers of engagement that will be needed to generate the performance required to hit the goals, and then developing a formal program to address them in a measurable way. I can’t tell you how many times I’ve heard planners from leading companies tell me something to the effect of, “We don’t have time to create a program. We just need a carrot to get people to hit our third-quarter goal.” These same people will then tell you later they don’t use reward programs because they don’t work.
ROI Measurement. Despite all the lip service paid to the concept of ROI measurement, it’s surprising how few incentive and reward programs actually get measured. Those companies that believe in the programs often don’t feel a need to measure them, and those that don’t believe in the efficacy of rewards and recognition aren’t swayed by even the best evidence. Today, there are a variety of tools to study the return on investment of incentive programs that are as least as precise as those used in other areas of marketing and management. Properly structured incentive programs are, in effect, gainsharing strategies whose cost partially hinges on the outcome. There’s simply no excuse to run a program without some form of ROI analysis. The Incentive Research Foundation offers a Master Measurement Model that provides a simple way to better track the return of any engagement investment, and it’s free and easy to use.
Analytics. Today, with the advent of web, email and mobile technology, along with customer relationship management software and engagement surveys, the power to identify trends out of actual behavioral data is unparalleled to those who understand how to analyze data. The concept of Big Data boils down to looking at the data you have to determine how to better correlate it to gain a deeper understanding of your audience. Are your best performers actually engaged with your means of engaging them – and if so, how? Behavioral data (i.e., what people actually do) overlaid with survey data provides unparalleled insights that will help you make better decisions.
Creativity. In the world of engagement, everything is about the award experience – how an award is communicated; how it’s presented and/or delivered; whether an reward is unique and “resonates” with the recipient. Almost all of the research indicates that what moves people over time is a sense of being supported, appreciated and respected, and that’s best accomplished by taking special care in the treatment of each award winner. Today, most companies ship rewards through retailers in a way that makes awards just another box arriving in the home. This lack of creativity and personalization is evidence that the majority of corporate practitioners simply don’t understand the science.
So who’s to blame for the lack of science in the use of rewards & recognition? Our answer is: nobody. The incentive industry has done a yeoman’s job of funding valid research that sheds objective light on best practices, and many solution providers do everything they can to make use of this science. The corporate practitioners are to be forgiven because they’re under tremendous pressure to achieve short-term results from management, who in turn can be forgiven for knowing little about engagement. Where, in fact, does the average businessperson learn about this subject in their education or business learning process? The reward & recognition publications mainly serve the trade and perhaps 10,000 corporate practitioners, a mere fraction of a marketplace that encompasses up to 1 million businesses or more. And the general business media doesn’t help, because it has no more knowledge about the field than their readers, viewers, or listeners.
As George Washington once said: “Perseverance has worked wonders in all times.” Those who continue to advance the science of rewards in the face of skeptical clients will be vindicated in the new era of engagement, in which organizations place a real value on one-to-one relationships and properly used reward programs can make a meaningful contribution in a measurable way.