The motivation of recognition and incentive program participants is at the core of any HR or sales & marketing solution. After all, the goal of recognition and incentive programs is to reinforce existing attitudes/behaviors and bring about new levels of engagement and performance.
Obtaining desired outcomes (and being able to model ROI) is determined by how well your program is designed, and there are several aspects of the design phase which should be included. In general, the concepts of program design and execution are common – but because every organization is unique – program specifics will be custom.
What are the common aspects of program design?
- Establish Program Focus (e.g., comprehensive recognition, safety, channel sales incentive, etc.)
- Clearly specify Program Objective(s) – what should the program achieve? (How are we going to define success?)
- Identify Program Behaviors/Activities that drive achievement of objectives (Key Performance Indicators – KPIs)
- Establish Program Budget per Participant
- Allocate Program Budget by KPI (the Award Rules)
- Model Program ROI under varying assumptions of objective achievement and Award Rule values
The Motivation Equation and Points-based Programs
When establishing budget per participant, follow the principle of the Motivation Equation, which is: The value of the reward must be greater than or equal to the effort required to earn it.” Keeping this in mind will help with assigning value to KPIs and establishing a proper balance between them and rewards offered. This principle is seen in varying degrees of complexity and utilized in many different spheres of life – which is why it is a foundational component in formal recognition and incentive programs.
Following the motivation equation is often straightforward with sales incentive programs, which are designed around specific targets – whether units sold, or margin achieved. With HR solutions – employee recognition, safety, years of service – employing a comprehensive points-based program allows for including a wide range of KPIs. This provides a cumulative earning potential for participants and flexibility when assigning KPI values. Desired attitudes and behaviors with lesser value can be included with greater frequency to sustain program momentum.
The motivation equation principle has been at work throughout the ages and immediately resonates with program participants. They will consider whether the rewards offered are worth the effort, and if not – will not be motivated to engage.
You may remember this principle at work from your youth. Perhaps it was allowance received for assigned tasks around the house, or work performed for friends, family, or neighbors. I recall the ads that ran in the back of comic books and kid’s publications that offered “Famous Name Prizes” and cash for selling greeting cards. The ads appear a bit humorous today, but as a young kid I enjoyed looking at the available rewards and thinking about prospects.
Ultimately, parental decision prevented me from returning the prepaid reply card, so I had to rely on mowing yards, but the catalog of “prizes” still provided the goal – and the motivation for my action. The motivation equation was alive and at work.
Great stuff, Jeff! Enjoyed reading it – I enjoyed working for Loyaltyworks 😁
Thanks Marty! Hope you are doing well! We enjoyed working with you back in the day!