Sales Incentives - Online Recognition

ONLINE RECOGNITION

Online recognition lets you reward people anywhere in the world, and do it promptly and fairly. Communication is so fast and easy that recipients of travel awards often swap tales on the company Web site when they return from a trip.

OVERVIEW

Now that so many people work from home or in far-flung facilities, recognition of their efforts can effectively be reinforced and implemented online. A number of online services provide flexible tools and strategies that assure immediate recognition coverage through e-mail and the Internet, with significant savings over traditional programs as they bypass paper, postage, and even phone bills.

Online recognition programs offer the ability to change motivational messages and rewards easily and inexpensively, keeping them different and exciting. And they provide a cost-effective way to track the progress of a program, collect data, and analyze it. Thanks to such efficiencies, even small companies can afford a recognition program.

It's another instance of high-tech solutions emerging to deal with problems that come with rapid economic change. Employee turnover reportedly costs U.S. companies more than $1 trillion annually in recruiting, training, and administrative expenses, so it's not surprising that companies are looking for creative ways to inspire workers. Plus, in this period of economic uncertainty, efforts to retain productive employees is more important than ever, so recognizing their hard work becomes crucial.

RESEARCH

In a July 2001 joint survey by the National Association for Employee Recognition (NAER) and WorldatWork, a not-for-profit association of compensation, benefits, and human resources professionals, 86 percent of the 539 companies surveyed said they have an employee recognition program and 62 percent of those that don't said they are considering creating one. Of those with programs, 91 percent report that their main objective is to improve employee morale; 73 percent are trying to make employees feel part of the company, and 70 percent are attempting to influence employee retention.

A December 2001 survey of U.S. workers by American Express Incentive Services found that 83 percent were not counting on the stability of their existing jobs, reports Darryl Hutson, CEO of the Fenton, MO, company. Hutson cites the economic downturn, the September 11, 2001, terrorist attacks, and the Enron scandal as factors contributing to workers' misgivings about corporate America.

"There's always a need for people to be recognized and rewarded for their efforts, even in good times," says Hutson, assessing what the study means in terms of recognition programs. "Employees were valuable when you hired them, and they should be equally valuable now that you have them. In our view, there needs to be ongoing employee recognition in the context of what corporations are trying to achieve. And what better vehicle than an online program, which not only allows management to instantly recognize individuals, but their peers to do it too."

Karen Renk, executive director of NAER , says that after an initial flurry of activity to learn about online recognition programs, "companies are now in a discernment process to determine if they can make their budgets accommodate such applications." Many companies have been quick to adopt online communications features for their existing programs as well as reporting and tracking functions, adds Renk, but "we're not seeing as much application of the fulfillment end online."

Renk concludes: "There is still a great deal of interest in moving traditional recognition programs online. Online programs are going to have an important and lasting place in the marketplace. But at this moment in time, companies are testing the waters to see which vendors are most conducive to their cultures."

AN ENVIRONMENT OF INSTANT RECOGNITION

Companies that don't teach their supervisors the importance of systematically acknowledging the worth of the individuals working for them are destined to face continual turnover problems that are frustrating and expensive. Money alone is not sufficient to keep the best people: they can get it elsewhere. Job advancement won't do it either: with mergers and downsizing, there aren't enough steps left to advance to.

Even fringe benefits, although valued by employees, can't provide the stimulation of instant recognition online. Motivation expert Bob Nelson bets you don't find a lot of people saying, "I'm really gonna rock today: I have dental insurance!" What will do it is what Nelson, president of Nelson Motivation Inc., calls "an environment of recognition" that includes appreciation and reward, preferably on-the-spot, from the boss or a fellow worker. Lay the foundation with such appreciative phrases as, "Thank you," "You did a good job," or "I really appreciate the work you did on that assignment."

Recognition can make a major contribution to corporate morale and is often an important ingredient in a company's appeal to prospective employees at any level. In contrast to incentives, which usually are geared to achieving objectives over a specified period and are confined to the sales force or another select group, recognition programs are designed to reach a broader population.

HOW ONLINE RECOGNITION WORKS

Online recognition lets you reward individuals or groups of people anywhere in the world, and do it promptly and fairly. Some key points:

Achievements that you want recognized should each be assigned a point value based on your goals and your budget. If recruiting is high on your list, for example, give high points to employees who recruit a new hire and bonus points if the person takes the job.
Reward service employees for performing a specific task well. Customer service reps, for example, might be recognized for being patient with cranky callers.
Reward safety efforts or suggestions.
Recognize anniversaries and promotions.
Make it easy for employees to be informed and reminded of the program online. Quick access will avoid lengthy online visits, which waste time for both employer and employee. By simply entering their password, participants should be able to access their personal accounts on the designated Web site so they can check their balances or order rewards.
Promote the program and praise awardees liberally in public. For online programs, this obviously works best on a Web site, but don't forget company newsletters and magazines and meetings and corporate events.
Offer a variety of reward options. An online program enables you to offer rewards through catalogs, both online and in print, through links to online retailers, or by issuing gift certificates or debit cards that can be used online or at stores.
In 2001, Chicago-based Hinda Incentives developed innergE, an online solution geared to the employee recognition market. This system offers all the key features of an online incentive system, including login/password protection, individual account information, detailed transaction history, an awards catalog, and shopping-cart functionality. In addition, innergE will automatically award points for years of service on an employee's anniversary date (an e-mail reminder is sent to the supervisor one week prior). Also, a discretionary-point feature allows supervisors to award points to their employees for exceptional performance, or peers to award points to one another.

CRITICAL ISSUES

Encouraging peers to nominate awardees. Although most programs bear the stamp of management, human resources professionals have come to realize that employees often are in the best position to recognize the achievements of fellow workers. Thus many programs provide for nomination by peers—usually with final approval by a manager.

What do winners want? People put a lot of value on trophy items that they will keep around forever in their home or office. There is also demand for electronics and "special gifts they wouldn't ordinarily buy for themselves." Others point out that many employees want to designate their own reward. American Express Incentive Services' Virtual Rewards program, for example, issues stored-value cards that allow recipients to shop online wherever American Express cards are honored.

Internet vs. intranet. Online programs can be delivered by Internet, which works best for a large, widely dispersed organization. But a company's own intranet often can do the job with the help of customized software that sets up the program and tracks its progress. That's usually less expensive, too.

WEIGH YOUR CHOICES

In choosing an online recognition company, consider such factors as:

Costs. Estimate what it will cost to design your site, service fees, prices of the awards chosen, shipping, and the cost of administering the program. Then compare that with what it would cost to do the job in-house, taking into account your own time and the number of people that would be required.
Amount of research and monitoring required from your human resources department to set up and maintain the program.
Demands likely to be placed on your information technology (IT) department to facilitate the program.
Attractiveness of the Web site. How well it works. Is it easy to access; do accounts and awards come up promptly?
Do catalogs and other merchants offer a broad selection of the kind of awards your employees want?
Professionalism. Does the supplier help with the program theme, rules, and messages? Does it handle the administration, online ordering, and point balances?
Special features. Does the supplier have any special advantage over the competition in creativity or in executing the program? Two examples: Hinda's years-of-service function on its innergE application and the American Express Incentive Services Web site that features ebility, an application that helps clients manage their reward programs online (see Online Recognition Providers).
Fulfillment time. Does the supplier ship awards within a few days of order or a few months? Some firms now offer two-day fulfillment.
Experience. Has the supplier performed for businesses of your size and type? (It pays to check references.) Does the company have people who know the sales-tax rates and rules of every state and can guide you on other tax issues? Is it capable of awarding and deducting employees' points automatically?