We spend a great deal of time emphasizing the positive aspects – and expected benefits – of properly designed and executed recognition or incentive programs. There’s good reason for this, as we know firsthand how effective the right program can be – drawing from our own Rally Rewards program as well as creating and managing successful programs for our clients. In general, planning consists of several basic components – some of which are:
- Identifying program participants
- Determining program parameters and performance criteria
- Assigning value to indicators to establish budget
- Establishing issuance frequency
- Developing program branding and collateral
But what happens when things go wrong? Programs launched with the best of intentions can result in catastrophe if poorly designed and executed. Imagine replacing your culture of recognition or safety with a culture of chaos!
Two such examples are cited by Chloie Brandrick from the UK – one being a bank’s sales incentive program that effectively encouraged unlawful conduct on the part of program participants. The UK’s Financial Conduct Authority found that a “culture of misselling” was established by the program, which rewarded cash rewards and promotion to advisers for hitting sales targets, while those falling short faced pay cuts and automatic demotion.
The resulting chaos is summarized by Brandrick:
“Badly-managed and left unchecked, this bank’s incentive schemes went seriously off-track – instead of supporting business objectives, they focused on unsustainable short-term financial goals. This meant the scheme was not just ineffective but counterproductive – eroding employee motivation, damaging public perception and ultimately undermining performance.”
The second example involves a hospital. After winning a prestigious award, the hospital awarded each of its 4,000 employees with a Kit Kat – a gesture that was decidedly insulting. Tangible rewards can be highly effective, but only when appropriate to the amount of effort and participation required earning them. In this case, management was treated to a fine meal while rank and file employees received a single Kit Kat.
It doesn’t have to be this way! With thoughtful planning, communication and consistency you can avoid incentive program chaos! Find out how you can get the most from your incentive program by contacting us today.