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Why saying ‘thank you’ means so much

It doesn’t matter what size your company is – from small food producers serving a strictly local client list to multinational conglomerates spanning the globe – in-house employee incentive schemes are still the most effective way for you to show your appreciation to the people who really ‘make it happen’. But why should you bother – wouldn’t a simple pay rise or a ‘bonus’ at the end of the month be just as effective?

The answer is a categorical ‘no’. While extra money sounds like a tempting prospect it is, when analysed, anything but. What starts off as an added extra for your employee is, in reality, often swallowed up by bills and other day-to-day expenses and any favourable impact that this ‘gift’ was meant to have had is lost.

In complete contrast, a well-targeted incentive scheme sends out all the right messages to your staff, providing them with a range of desirable treats to strive for. From big brand name products to designer goods, cutting edge technological items, holidays – even vouchers for a parachute jump, a pampering day at a health spa or a rally driving event – these are all rewards that your staff will aspire to, and that will inspire them to go that extra mile for your firm.

Traditionally used by companies to boost sales, the bottom line employee incentive schemes are now much more flexible, adapting to fit your particular company and the aims you want to achieve. Want to improve customer service standards, inspire staff loyalty, instil company values or increase productivity? An employee incentive scheme can help you do all this, and more.

Such schemes provide a real opportunity for the management of any firm to reach out and involve everyone – from the shop floor to the boardroom – in an initiative that truly creates a win-win situation. The employees get the chance to ‘earn’ some fantastic added extras and have some fun injected into their day-to-day working lives, while the company benefits from increased employee retention and higher working standards.

Essential tips for your scheme’s success

Staff incentive schemes are a great idea – but how can you ensure that yours will work? A good starting point is a comprehensive brief which should set out what you hope to achieve from the project. This should also include a profile of the employees who will be participating in the scheme, in as much detail as possible, as this will help you to select the right sort of incentives to inspire them. This is crucial to the success of your initiative – it’s no use offering rap CDs and snowboarding weekends to a mainly family-orientated, older workforce! When selecting the mix of incentives it is also important to ensure that all participating employee layers are catered for, which in some cases can mean from cleaner to chairman – both invaluable in their individual ways for the different roles they play.

Well-known branded goods – from sunglasses to TVs and microwaves to watches – are the best bet for any incentive scheme because they already have a high perceived value in the eyes of your employees. Talk to a selection of staff members for feedback as to what would motivate them and, where merchandise is involved, they are bound to cite famous, aspirational brands. Without doubt, the better the brand the harder people will work to acquire them and this is exactly what incentive schemes are designed to do.

Other issues that must be considered are the tax implications of giving these gifts, how the scheme will be run (in-house or out-sourced to a company that specialises in implementing such programmes) and how it will be communicated to your staff. This is another extremely important issue – to keep staff interested and make them feel included you need to keep them informed about the progress of the scheme, the introduction of new products and who has achieved which reward so far.

And, of course, it is essential that you pick the right supplier to deliver the rewards to your staff. Always obtain client references before employing a company as a reliable supplier will pay dividends – not only will they supply the top quality products which your employees have worked so hard for, they will make sure they are delivered on time and intact – every time – as well as giving you the benefit of their experience, knowledge and advice.

What are the options?

Incentive schemes all run along the same lines – staff members receive their rewards when they have reached a certain set level of achievement. This could mean earning points which are saved and redeemed for the reward of your employee’s choice or simply receiving a reward each time they achieve a certain goal. The difference comes in the route you take to communicate the scheme to the participants – the ‘traditional’ paper-based way or the ‘hi-tech’ Internet method.

In my experience, points-based schemes are the most popular, with companies still valuing the ‘touch and feel’ that a printed paper catalogue, detailing all the rewards on offer and the points required to ‘buy’ them, can bring. However, there is a noticeable trend, particularly from companies in the IT sector, perhaps understandably, towards using websites as the presentation media for their schemes. This enables participants to log on and check how many points they have ‘in the bank’ and the company to add news about the scheme – who has achieved which level of reward – on a daily basis. This route also makes it easier to keep the scheme fresh by adding new products and rewards as they become available during the life of the initiative. Some of the more sophisticated web-based incentive programmes even allow the participants to order their chosen reward on-line and have it delivered to their door the very next day, enter additional competitions and give feedback to the company on what they think about the scheme, all at the click of a mouse!

Whichever way you run your own particular employee incentive scheme, make no mistake, you should definitely be running one. Incentive schemes are a fantastic way to focus the workforce towards your objectives and motivating staff is essential to encourage employee retention, productivity and job satisfaction.

The main tips to keep in mind are:

• Start with a good brief – this is essential to establish your objectives.
• Identify your target audience – profile your staff, what rewards will really motivate them?
• Make the rewards achieveable – it’s no use offering desirable incentives if there is no way that the participants can reach the standards required to ‘earn’ them.
• Try to stick with well-known brands – there’s no question, the bigger the name the harder people will work to get their products.
• Choose your supplier carefully and always obtain references before employing them.

Employee incentive schemes can work for any size company in any industry because they are so flexible and aspirational – who wouldn’t work harder, faster or better to own a desirable branded product? In fact, any company that means business – and means to stay in business – should be running one!

(This article was originally published in Director of Finance 2004 edition)