Points Programs

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Employee Incentive Program Traps lead to Employee Disengagement

While in a conference call last week, I encountered a potential client who was looking to establish an incentive program to engage employees with an incentive award program. However the design of the incentive program they were looking to implement contained some classic incentive traps that I wanted to discuss this week. Even though organizations approach incentive award programs with greatest of intentions, the following incentive traps will doom a program to not engage an audience or achieve company objectives.

Trap #1: Stand-Alone Raffles/Sweepstakes/Contests

Raffles, sweepstakes or the like fail to award all employees who have reached incentive program goals and can consequently create employee disengagement and resentment. In order to make an incentive program relevant and worth participating in for workers, managers need to take the WIITFM (What Is In It For Me) approach to design the award program. I recommend that employees who reach incentive program goals be recognized and rewarded regularly. A great way to incorporate a contest in an overall incentive program is to take the incentive points that were awarded to employees who no longer work for the company and redeem them for one incentive gift that can be raffled off at the end of the year.

Trap #2: Too few incentive gifts or too many incentive gifts offered

Often clients will ask me if they can limit the number of items in our incentive award catalog from about 70 gifts per collection to just a handful. The problem with limiting employees to a one size fits all incentive gift is that many times the person who does the limiting is picking out the items that he or she would prefer to select whereas individual tastes vary in an organization. Our lifestyle incentive merchandise collections offer options suitable for different demographics and tastes without overwhelming participants.

Alternatively, a few clients of mine have asked to combine incentive gift collections so employees select one award from over 210 items. Research from Columbia University shows people have a much harder time selecting an incentive gift when given too many choices. When employees are overwhelmed with options, the incentive program will have lower redemption rates and participation can suffer.

Trap #3: Offering participants cash or their choice of a merchandise incentive

The recession has many companies considering a cash option for employees who reach incentive program goals instead of rewarding them with merchandise incentives. When employees are awarded with cash it is common for the reward to be spent on necessities such as household goods, car payments or the employee may simply save the money. A company that awards employees with their choice of tangible merchandise awards ensures that the gift selected will be something that is wanted and appreciated rather than simply needed. Since employees don't have the option to spend their incentive on everyday needs they do not have to feel guilty about selecting something special for themselves that they might not otherwise be able to justify purchasing due to the recession. There are many other reasons why cash is not the best option for incentive gifts and these can be found in the blog Merchandise Motivates - Cash and Gift Cards Can't Compete with Tangible Awards in the Employee Recognition Arena.

Trap #4: Rewarding end results instead of the efforts people make to achieve the desired results

Many companies make the mistake of rewarding employees who reach 1,000,000 accident-free hours instead of consistently rewarding workers who practice safe behavior or report safety hazards that lead to a great safety record. Especially in the example of safety incentive programs, it is vital for organizations to encourage the reporting of accidents or safety hazards in the workplace in order to truly create a safety culture in the workplace. When a company rewards employees only after a certain amount of time has passed with no incidents reported, they may be unintentionally encouraging employees to underreport accidents and safety hazards. Safety milestones should be celebrated and rewarded but the behaviors that create the safety record also need to be recognized and rewarded.

Organizations should be cognizant of the perverse incentives that exist in the recognition and incentive industry. All of these incentive traps can be replaced with better incentive practices that will both entice participation and engage employees.

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