Rewards

Setting it up

Getting employees motivated is what managing people is about. So why don’t they respond to your "dinner at the best restaurant in town" proposition?

	One of the most common complaint about incentive programs has to do with the type of reward offered. Too often rewards are designated by executives without regard for what the employees really want. They pick reward that motivate executives, not staff. To say that different people are motivated by different things is no more than common sense.
	The dinner in town may motivate your F&B Manager but probably not your busboys or waiters, who may feel they do not have the proper education, upbringing, manners or clothing to be relaxed in the posh Four Seasons Grillroom.

A colleague who specializes in setting up incentive systems for large companies in Australia, told me once: " Many basic staff in Australian factories are new immigrants, and for them, basic home equipment and appliances such as cookers, refrigerators, TV's and lawn mowers are more important (bigger motivators) than for the older Australian stock whose home is already well set and who may prefer trips or other leisure activities". Different strokes for different folks!

Ask your staff, they know best. Or have a point system with several types of rewards available for the same number of points. Let' say for 500 points I may have the choice between trip to Singapore and a kitchen appliance. An additional option is to give the opportunity for people to top it up.

Let's say, I only reach 480 points but I really want the Singapore trip, I may have the option to pay $20.00 to purchase the extra points I am missing. Of course, I can only top up, not buy the entire award!

When you want to implement any new policy, all your staff are tuned in to :

WIIFM Radio (What's-in-It-For-Me Radio).

Do employees rate your program as unfair?

Your goals may be unrealistic. If for example, nobody gets the incentive unless they double the wine sales, most waiters will rate your program as unfair. Unfair also is the system where too few employees, or the same employees, always get the rewards. Imagine you offer a week for two in Bali to the sales person who sells the most rooms. Most of your sales staff will probably agree that only one or two of them will have the ability to have a realistic shot at it. It is easy to imagine what happens to the spirit of those who know they are not in the running.

I personally favor a system of tiered reward structure, in which employees earn rewards based on their levels of performance. That way, top performers may be able to earn the big prize, but adequate performers - the largest percentage of employees in your organization - will be able to earn some kind of reward as well. What works very well is a point system where employees accumulate points for various actions, behavior or sales, and can redeem those points against various prizes. In doing so you ensure the maid can compete as well as your waiter or the clerk in the accounts office.

Recognition of an employee's contribution is essential and it is important from time to time to reward an exceptional contribution. Although there is nothing intrinsically wrong with giving monetary rewards, it has the danger of corrupting the pay system and demotivate the very people you want to motivate. Just as well, the annual merit increase does not really serve as a major tool in a performance improvement system, because it is too easily confused with salary. Trying to convince your maids that they should consider their paycheck a "reward" is very hard to sell, particularly in a country where unemployment is low such as Indonesia or the Phillipines.

Maintain a great reservoir of rewards, mainly non-financial. A bunch of flowers, bicycle for the kids, special pen, trips, seminars, home equipment such as TVs, VCR, rice cookers, oven, etc. Rewards that also reward the family go a long way. Imagine the recognition your maintenance officer gets when his eight year old tells his little friends: "My new bicycle? My dad got it because he was the best at work!" or your waitress who shows all the housewives in the kampong the new microwave she received because she sold the highest number of special dishes. Money cannot buy that : it is called Pride.

Rewards can be for positive or negative achievement. By example, you can reward the worst performer with an old shoe, or a rotten cheese. The idea is to make it fun for everyone, while enticing all not to have this award the following time around. I know of one company who gives a wooden spoon to the manager who does the worse business plan. You bet it is never the same guy!

Do not only reward the best. Reward improvements too. It is important that staff feel they can achieve something. Not everyone can be a top performer easily. You must reward along the way.

other recognition and forms of reward may include:

	Promotion to jobs of higher authority or responsibility
	Certain pre-requisites such as club membership, executive dining room privileges, reserved parking spaces and others
	Praise - both oral and written
	Interesting jobs that have challenging and satisfying tasks built into them
	Status symbols like job titles, service award pins, office, namecards, and so on
	Opportunities for time off with pay, such as additional vacation, holidays, sabbaticals or personal leave time
	Company paid vacation trips for employee and family
	Opportunities for learning (paid seminars, courses, foreign education, scholarship)

Pure recognition is a reward that costs less than an incentive. Its motivational power stems from the employee's desire to be publicly recognized as a good performer rather than focusing on material desires such as cash or merchandise. This form of reward should be linked to any improvement and motivation system. The typical example is the Employee of the Month award, with ad-hoc picture. There again, most employers do only half the job, as either the employees view the picking system as unfair - they often don't know or are not told the rules - or the award does not motivate them because it is only "one of those things" there is no ummmph! no celebration!

As you can well see, it is easy to design a reward system that doesn't work. By avoiding some of the above problems you may be able to design one that does work. Most managers take the easy way out, designing a reward strategy that takes virtually no effort. Recent studies show that more than half the companies surveyed designed their rewards system through trial and error. One of the better ways is to hire an outside consultant to set it up for you. His expertise will make you avoid the pitfalls and ensure the rewards and incentive system is fair to all.

A STEP BY STEP

for in-house sales

# I. Set a definable aim. For example, increase in-house sales revenue from XXX per month to YYY per month over the next six months (providing of course that this is a realistic aim and time frame).

# 2. Establish a base. What is achieved now so you can check that the targets are realistic and achievable.

# 3. Look at how many people have the opportunity to make this type of sale and if they all have equal opportunities. This then lets you set individual targets for them.

# 4. Their rewards should be based on achieving their targets with a special reward going to the person with the greatest over goal result.

# 5. The total cost of the rewards can be established as 10 per cent to 50 per cent of the profit generated by the increased business. (note that we are talking about profit there, not sales!) This total is divided by the number of participants to get a per person reward value.

# 6. A reward to this value, appropriate for the participants is then selected.

# 7.All these details should be worked out with management first, then announced to the participants. They should be shown an example of the rewards they can earn and given the details of the program in writing, including their goals.

#8. To really move it along you can offer an additional "Bonus reward to the person first to reach 50 per cent of goal"

#9. Celebrate !!