Ten costly misconceptions about incentive programmes

Most contact centres can achieve an even greater improvement in KPIs by avoiding some common incentive programme pitfalls.  Robert Cowen of Snowfly shares his guidance to offset the most common misconceptions….

1. Incentive programmes should be used primarily to solve short-term problems

Incentive programmes are often set up to be a “shot in the arm” to improve sales, introduce new products, collect more money, etc.  Unfortunately, these have almost no residual effect so performance levels revert to pre-programme levels at the conclusion.  From my experience, incentive programmes which are designed to run continuously can sustain KPI performance improvements of at least 20%, and only require about two hours’ worth of labour cost per employee per month.  Management should be elated with an ROI like this and question why an incentive programme should not be permanent.

2. In order for an incentive programme to be effective, a lot of money must be spent

Studies have shown that incremental incentive-related improvements stop at around 3% of payroll.  With a few exceptions, spending two hours of labour cost per employee/month should be enough; anything more will decrease your ROI.  The keys to success are how the programme is administered and how rewards are distributed: reward the daily homework, make work fun, pay immediately and offer a choice of valued rewards.

3. It takes substantial time and resources to create and administer an incentive programme

I take my hat off to those who create, implement and manage an incentive programme, especially the short-duration ones.  That’s the problem; a short-term programme receives little or no help from outside the department.  KPI data is often manually extracted from various applications and manually input into spreadsheets and databases.  If some degree of automation is created, it must be updated with each new programme.  A permanently operating incentive programme (with an excellent ROI) will have strong management support; thus resources will be extended to create a flexible support infrastructure.

4. Incentives should be rewarded only for achieving long-duration goals (monthly, quarterly & yearly)

Rewarding employees for achieving “big picture” objectives is a good practice.  However, it does not address the needs of Gen X and Y employees who need constant reinforcement and praise.  More success will be achieved by breaking down large activities into their smallest measurable components and rewarding them as they occur, i.e. “rewarding the daily homework”.

5. Incentive games are silly and counterproductive

In my experience with Snowfly, I have found that nine times out ten, when given a choice, employees would rather play a random point-yielding game as opposed to being rewarded a finite, consistent amount of points.  Whether it’s spin-the-wheel, draw a ticket from the fish bowl, select an envelope, or something else, random intermittent reinforcement is one of the most powerful motivators for task continuation.  Unfortunately, the proven motivational power of randomised reinforcement is not utilised in the large majority of employee incentive programmes.

6. Incentive programmes should reward only the top performers

You may have heard of the superstar effect.  People stop trying when they realise their chances of winning are slim.  Incentive programmes should be set up to reward anyone and everyone that performs at the desired level. That being said, be sure to put the proper amount of thought and research into setting the thresholds for reward.

7. Incentive programmes should only reward team-based achievements

Teams are great for creating employee bonds, thus very helpful in reducing early-stage employee turnover.  However, team rewards may lead to social loafing, e.g. “I don’t have to work that hard, my team has got me covered.”   To prevent this, team-based rewards should only be used in combination with individual rewards.

8. Refillable debit cards, retail and restaurant gift cards are not as effective as tangible incentive rewards

The fact that debit cards and gift cards to stores and restaurants do not have the tangibility of merchandise is outweighed by the choice and value they provide.  Incentive catalogues offer a limited selection of items and the cost of the merchandise is more expensive.

9. There should be a few large prizes with a high value

Expensive, trophy-value prizes are another “nice to have” but they postpone the reinforcement of being rewarded frequently.  Finite incentive budgets will generate more positive behaviours if the employees can enjoy the benefits of their actions often.

10. You have to do it all yourself

Many are unaware that there are companies that specialise in the creation, implementation, and management of employee incentive programmes.  They have in-depth knowledge and expertise in the field of contact centre motivation and incentives.  Consider outside assistance, test their familiarity with challenges like yours and evaluate their recommendations.  Be sure to question how they make their money and what type and duration of service agreement is required.

www.snowfly.com

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