12th April 2009 - Incentive & Motivation

With the country in the grip of a recession, staff recognition programmes are under review Smart Derrick finds out there are some new rules for loyalty. It would not be entirely surprising if staff recognition was an area that many businesses were having to revisit at present. In a downturn, marketing and HR are two disciplines that are soon dubbed discretionary spend and can seem an opportunity for quick and easy cost savings. Similarly, the good-times mantra about staff being your most important asset can appear an expensive conceit when fortunes wane. Crudely put, with unemployment nudging two million and predicted to rise further, surely it’s an employer’s market, where staff should be glad just to have a job.

That said, players in the staff motivation and incentives arena are keen to reiterate the value of their products, even in a downturn. They counter that although the recession is tough for all, it is not the time to dispense with techniques that will ultimately help businesses emerge from the slough stronger. Catherine Forrest, business incentives manager-at House of Fraser, says that cutbacks in recognition and loyalty programmes can have a negative effect on morale at a sensitive time. “Employees will be in fear of losing their jobs; they may feel stressed and, will perhaps be working too hard to prove their worth, or even having to do the job of two people it’s now more important than ever to maintain performance by motivating and -retaining key staff. Companies still need quality people.” - Francis Goss, head of commercial operations, - international recognition and incentives, at Grass Roots agrees that motivation-is essential to keep businesses fighting fit. “For many employers, it is not just -about having Staff, they want to be employers of choice in their sector,” he says.

“We do a lot of work with British Gas, and they are still investing. They are looking to make a good employer even better.” When the inevitable upturn does come businesses need to bear in mind that staff loyalty will again become an issue, says Kevin Harrington, research and development director of Sodexho Pass. “People remember how they are treated when times are tough, and they may not be that loyal in the long-term to companies that have not treated them well”. Although experts insist that the need for 1oyait and motivation procedures remains, the current environment means that tried and tested techniques need to be tweaked.

So what ate the new rules for, keeping staff on board during a downturn? We picked the brains of motivation gurus to find, out.

1. ENSURE THAT THE PROGRAMME ALIGNS WITH BUSINESS OBJECTIVES
Managers need to take a look at corporate objectives for the next year and devise a programme that reflects the new business reality. Sales targets may have to he reined in to a more realistic level than in fat times for instance, Also, there may be other objectives that are judged to be of growing importance, such as retaining existing clients, improving service levels and embodying brand values.

Michael A Fina vice president, at Michael C Fina, sáys: “An important challenge lies in creating a programme that is bespoke to the organisation and aligned with its, core company values and corporate image. After all, a motivation strategy should aim to create brand advocates, among staff and encourage pride in the workplace.”

2. KEEP COMMUNICATION CONSISTENT AND CLEAR
The organisation needs to develop a framework that is clearly communicated to all personnel; against which they can be recognized by peers and managers when they exceed expectations. Transparency is key Everyone must be able to see what has been recognised and why. ”There is a real role for HR and marketing to work together more closely on this” says Andy Philpott, marketang director of Accor Services “Companies should apply the same principles they use for customers on their own people, including segmentation and review.”

3. BE SENSITIVE
Especially if there have been redundancies elsewhere in the organization. The last thing that you want to come across is that efficiencies have been made in one area simply to reward staff in another part of the business. The organisation still has targets to hit and has to plan for the future but no may not be the right time to launch a Viva Las Vegas promotion for the sales team, especially if you are handing out the P45s on another floor.

4. BE SMART WITH YOUR BUDGET
It will come as no surprise that clients are expecting more bang for their motivational buck, and suppliers are having to respond. KuIjit Kaur, head of business development at The Voucher Shop Suggests spreading the scope of the programme to take in other areas of the business that are some as recognised as the big hitters. “Avoid at all costs having categories that only reward certain areas of the business or that will result in the same people being rewarded for the same thing month after month. Consider a most improved, or best performance by a new employee, to make sure everyonehas an opportunity to shine”. Grass Roots’ Francis Goss suggests using broader metrics to measure success. Rather than simply looking at bottom line sales; a large insurance client has introduced a programme that also factors in service delivery and customer satisfaction.

5. BE FLEXIBLE
If the past few months have demonstrated anything, it is how quickly a seemingly robust business can get into trouble. Make sure that your programme can adapt to a changing business environment, and ensure it focuses on the short-term and the long term. Empowering managers to give on-the-spot rewards allows them to recognize good practice and embed it in other workers’ behaviour without having to wait for the end of the month or quarter. Immediacy ensures that the right behaviours are recognized at the right time. Impact is lost if there is a long gap between earning and receiving.

6. GET THE REWARDS RIGHT
It can be easy to leave the choice of rewards to last, or togo with what was successful last year, but in the current environment, last ear is another country. The best way to find out what gets staff buzzing is to ask them. Companies don’t think twice about testing different marketing propositions with customers, and it is the same with internal customers. In fact the process is even easier as they are within easy reach. Andy Philpott says that businesses should segment their internal audiences in the same way they do with customers. “Not everybody has the same levers. Depending on your age and life stage, very different things are important to you. The ability to provide flexible benefits is really important to staff. He also points out that staff are increasingly interested in features such as shopping discounts that help ease the financial burden in tough times.

7. ENGAGEMENT IS THE NEW BUZZWORD

Enlightened businesses are now highlighting employee engagement as their holly Grail. The term encompasses a broader appreciation of what employee’s want from their working life and how they relate to their employer. One thing that’s clear is that organisations with high levels of staff engagement perform better. According to research by employee survey company ISR, businesses with a high degree of engagement saw operating income increase by 19.2%. Those with low levels saw a 32.7% decline. In practical terms, during a recession, engaged businesses Put the emphasis on long-term performance, two-way communication between staff and management and being prepared to go the extra mile, making them better prepared for the upturn when it comes.

8. MEASURE AND ACT ON THE RESULTS
There need to be measures of ROl in place, and these should be agreed at the start of the programme. The scores against specific questions in the annual staff attitude survey are a good place to start. Efforts should also be made to isolate the impact of the programme on metrics such as staff retention, customer satisfaction and sales performance.

9. DON’T SEE RECOGNITION AS AN EASY EFFICIENCY

Staff who are used to having a reward and recognition programme will resent it being taken away, and any short-term savings could quickly be outweighed by the costs of disloyalty at the time when the business can least afford them – when the upturn comes.

10. NEVER UNDERESTIMATE THE VALUE OF PEER RECOGNITION

The best programmes work not because they have the biggest budgets or the most mind-blowing prizes. They work because of the care that has gone into making stiff feel valued, and the most important element is doing so in front of their colleagues A pat on the back and a word of praise from the boss in a public forum can have a higher value than the reward associated with it.