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IncentIntel
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I love the approach taken here but I am a bit baffled by why anyone would have a problem with the concept and implementation. I think it shows a real thoughtfulness and awareness of what happens inside an employee's mind and how to align company needs and wants with employee needs and wants. To me you hit on the perfect solution. The only thing I can see where someone might have and issue is if they see this an "engagement program" versus a mindset that allows the company to solve a problem AND foster more engagement. That is the real win here. A lot of companies who do "forced team activities" and fake recognition events so they can check the box could learn a lot from this post. Think about engagement as a series of mundane solutions - not a single "event." More baseball games are won with multiple singles than with single (or even multiple) home runs. (Okay - that just become a blog post for me - don't steal it.)
Thanks Dev Dugal - got it. You can stop yelling at me now.
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Sorry I couldn’t get to the comments yesterday. Thanks for weighing in. @Chris – the key in my mind is there is a difference between maximizing and optimizing your financials. Too many companies focus on maximizing – which means something/someone has to lose in order for the company to win. Maximizing connotes a “single” right answer. If there is just ONE nickel left on the ground – you haven’t maximized. Optimization has a nuance of judgment – and that’s what I’m referring to. In this case – just because you have the right to raise prices – doesn’t make it the right thing to do. I think you misread my post to say that HR should ignore the financial equation. I’m not. I’m saying there are a variety of ways to allocate expenses/resources – not all of them maximize return – but they may optimize across a wider variety of variables. @kolz – It’s not socialism. It’s just smart business. I give now to get later. I’m all for profit – but I’m also all for smart, long-term, intelligent ways of getting it. The “moral” part I’m referring to is making the decision to walk away from the obscene short-term win for the more desirable long-term win. @MicroSourcing – Not really sure what you’re saying there… unless we’re in agreement ethics=morality – then you’re brilliant. @Xyzzy – (if that is your real name) – This isn’t a discussion of government – it’s a discussion about applying the same thought process we would use if our neighbors needed help during a short period of time. I’ll leave the political discourse to another blogger and another blog. But to your point in the second paragraph of your comment - If I ran the hotel – would do the same as you indicated. I’d lower my prices and then ask each hotel guest to help my business by tweeting, facebooking, recommending us in the future and give them some discount for their next stay as well. Thanks all for reading and commenting. Cheers.
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Good point - that's why you have to be careful of these "academic" studies - so many variables to consider. But, if it isn't too dysfunctional an organization - the team should have a collective knowledge of who really helped and would understand the share logic - or ... you could figure out how to make the prosocial award something that the team would experience/share - that way you can include them all. Then you've got the free-rider problem - crap - why isn't this stuff easy!
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Not that I'm gonna get all huffy that you're treading on my turf - but this is fabulous. And not just a millenial thing. To give you another perspective - think about wives/husbands/sig. others... I routinely send emails and notes to family members conveying the same thoughts as your post - especially during and after times where long hours were the norm. Those little things paid off big time over the years in loyalty and engagement. People have a social world outside of work - that's the third wall (or fourth wall) of recognition needs to go. Some companies are getting it and letting rewards and recognition communications be shared via twitter, facebook and linkedin. Expand the circle of recognition! Good job Tim... but I'm watching you.
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Two issues in my mind here... 1. Stop getting feedback as you rise up the ladder - that's a management issue at the top. Too often we substitute stock price for performance review. Not good. 2. Feedback on the "way" you do things... that can only come from rank & file (IMHO) - and with a power position you don't get frank feedback. In my post I did put the challenge out there that there needs to be a vetting process so we know that folks are employees - so it isn't wide open - however, no one in a power position will ever get real feedback without the anonymity factor. That's just human nature. I'd rather get feedback that is 70% reliable allowing for the haters and just plain weirdos than no feedback at all.
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Matt - you're right the ROI is the cost or investment and the dollar return. So you are in fact influencing behaviors that influence sales. Therefore, you can, as you say - reward behaviors and measure outcomes. The difference is that I'm not rewarding the outcomes. The ROI is management's issue - not the sales person (using the example.) In most companies there are specific and trainable elements/behaviors that lead to a sale. Those are the first things to look at. As you mention there are other variables that influence sales - market conditions, competitive pricing, etc. However, those things don't affect behaviors - just outcomes. Because a competitor has a different pricing structure shouldn't penalize the sales person if they are following the process. Pricing isn't the sales person's control - usually and within reason - some have autonomy to set pricing. But in any event - if the person is doing what you want they should get rewarded - not penalized because the pricing department screwed up. Sales people are variable and some sell differently than others. However, there are usually some very specific behaviors that drive more sales than others. The beauty of incentive programs is that everyone has a choice to play or not. If a sales person is successful doing it one way - they don't have to play the game. They can keep on doing what they are doing. No penalty. However, if they are that successful then the company should mirror those behaviors in the incentive program to get all the sales people to do it that way.
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I got this comment via email on this post and asked that the person put the question here in the comments for me to address. I haven’t seen them post here – and the email was from a mobile phone so I’m going to make the assumption he would if he could and go ahead and post it anyway without waiting. The questions asked... So, if we should be measuring behaviors over results, as you state in your 7/21 post, how does one conduct an ROI with behaviors as an outcome? Moreover, how does one define the behaviors you want to incent, and measure if they are occurring? I would think that would be just as riddled with unintended consequences. I’m going to address the second question first... Every outcome is the result of someone doing something. Key to designing the best program is a pretty good dive into the behaviors that lead to the outcome. Start at the outcome and back up. An abbreviated example would be... Sales = awareness+contact+discovery of problem to solve+discussion of options+presentation of options+discussion of solution presented+equating solution value to problem cost/issue+discussion of cost/value+signed deal. In this case I’d probably also start weighting the different behaviors – which are more important – which less – and then have way to track those behaviors. If it is discussions – then meeting notes logged into a CRM system can be a good proxy for that behavior – so maybe the sales person get’s 10,000 points for each document put into the system (bonus points as you move through the behavior chaing.) That’s how you connect an incentive to a behavior. Is there a possibility for unintended consequences? Absolutely – people could clog up the CRM system with garbage notes to get the points. But have you ever heard of “managers” or “supervisors” or even peer review (how ‘bout a rating system by the account team?) to help manage quality. ROI- simple enough – did more sales result in influencing people to follow the process? Yes – then whoo hoo – you win. If no... then have you identified the behaviors correctly? Did you miss something in the process? Are you people not trained well in each of the steps? These are questions that need to be answered – and truthfully – the only way to really identify what needs to be addressed is through a program that identifies behaviors. If you ran the incentive solely on results – and didn’t hit your goal the natural reaction is to say either the incentive wasn’t enough or ... you have lazy people. Neither of which is the right answer in most cases. Wow... this turned into a post in itself didn’t it...
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Jul 21, 2011