Points Programs

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D’Oh! Incentive Program Unintended Consequences You Can Correct

I am very happy to meet the New Year with a warm smile and cleansing breath. The changing of the year is much more than trying to remember to write 2013 instead of 2012, it is the perfect time to take a quick look back and then move forward. It is also the perfect time to right past wrongs and put mistakes behind you, especially when it comes to work. While catching up on Compensation Café today, I came across a great article by Jacque Vilet titled “The Law of Unintended Consequences”. Vilet focuses on “the things we don’t know we don’t know” and shares two mistakes made completely unintentionally. I’d like to discuss these mistakes, how they relate to incentive programs, and what you can do to correct them this year.

Mistake One – HMO Administrative Mistake

Situation: Administrators wanted to keep the cost of unnecessary tests down and incentivized doctors who prescribed less than fifty tests a year.

What Happened: All doctors met the goal of less than fifty tests a year. Patients got sick with preventable illnesses that could have been detected by tests.

This sounds a lot to me like what can happen in a safety incentive program if administrators are not careful. Many reward programs are structured to give incentives to employees if they complete a quarter or year with no OSHA recordable incidents. Unfortunately, if this is the only goal of the incentive program, employees may underreport recordable accidents and put peer pressure on others to do so as well. The solution is to not just reward employees for having no accidents but teaching them about safe behaviors and testing their safety knowledge. Modern safety incentive programs encompass a range of goals including completing weekly or monthly safety trainings, passing safety quizzes, preventing accidents, identifying hazardous situations, and much more. This approach to safety incentive programs can result in employees participating in a safety culture at work, a much different situation than what could occur if you only reward employees for having no recordable accidents.

Mistake Two – Engineer Mistake

Situation: An engineer is given goals to not only complete all designs but also to implement them within one business quarter.

What Happened: The engineer worked hard to meet his goals, and put pressure on all of his co-workers to help him meet his goals. Although the program was set up to reward one person, the efforts of many were needed to complete the work.

A mistake like this can happen in any incentive program designed to reward individuals when it takes more than one person to get the job done. I work a lot with departmental managers and supervisors who can help to develop goals for the individuals they oversee. I think Vilet gives great advice in his article, “One way to try to prevent these "gotchas" from happening is to have your plan, proposal, etc. reviewed by several people in your group.“ Although an incentive program is usually conceptualized by human resource managers, goals for individuals should be managed and maintained by both HR and departmental heads. If you haven’t looked at your company’s goals since last year, why not take a look at them with fresh eyes?

Mistake Three – Customer Service Representative Mistake

Situation: CSRs were paid for keeping calls under a certain time limit.

What Happened: CSRs hung up on callers who were close to their time limit.

This mistake was actually left in one of the comments and is another great example of unintended consequences. I have a few call center incentive programs that include goals similar to this, but always with the condition the call is resolved within a desired time frame, thus eliminating the hang ups. Another common problem for a call center incentive program is that the company is so focused on improving only one metric, that they don’t realize this could ultimately take away from areas where current performance is at an acceptable level. A possible resolution for this is to include five to ten goals in your incentive program such as reducing active hold times, keeping contact resolutions above a desired limit, managing contact volume at different levels per month, selling more than one add-on or service and improving customer service.

Robert Bence, who left the comment about CSRs hanging up on callers, sums all of this up well when he states, “All goals can be described in terms of quality, quantity, time or costs, but those measures might not be numeric and are rarely well communicated.” With the ringing in of the 2013, why not take a look at your incentive program goals and make sure they are understandable. While you’re at it, speak with managers and supervisors about possible incentive program unintended consequences.

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