Points Programs

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How to Decide on a Point Scale for your Employee Incentive Program

Whether you call them credits, bucks, tokens, medals, stars, chips or currency, the psychological benefits behind using points as part of an ongoing employee incentive program is well founded. Researchers have identified four reasons that points should be utilized instead of assigning a monetary value to tangible awards in an incentive program: evaluability, separability, justifiability and social reinforcement. Since most companies understand the benefits of using a point scale for an incentive program, the question becomes, “what point scale should we use?”

The incentive industry’s standard point scale is 1/2 cent (.005) per point and if you are using a paper-based employee incentive program, chances are you will need to adhere to this standard scale. However, if you have an online incentive program, your company should be able to develop your own point scale.

The incentive industry standard exists because it accomplishes a number of points. For one, the standard point scale makes figuring out the dollar value of an item hard for employee incentive program participants. A few common incentive program point scales I have encountered include: dollar per point, nickel per point and penny per point.

Employee Incentive Program Point ChartAdditionally, a point scale should clearly separate points from monetary values. I would strongly recommend that employee incentive programs do not use a $1 = 1 point scale as this is too easy for participants to assign a monetary value to the items they earn. When participants reach goals, it is difficult for a person to assign a dollar value to this achievement. In fact some incentive program goals that are reached could be considered priceless to the organization. The 1/2 cent per point standard allows participants to disassociate the points from a dollar value. In other words, would you prefer to earn $35 or 7,000 points to spend on tangible incentive awards? The incentive program point scale should allow participants to feel they are earning and achieving much more than just a dollar amount.

Lastly, the standard point scale works well because it exaggerates the number of points being rewarded, which in turn inflates the value of the item. When I was a few years old, my older brother could trick me with the line, “I’ll trade you 3 quarters for your 1 dollar!” I would accept his offer as swapping 1 thing for 3 things seemed like a good deal. The same is true for a point scale in an employee incentive program, the higher amount of points an award is worth, the more value we mentally assign to the tangible item.

The incentive industry’s standard point scale is the most common scale I have seen clients use in employee incentive programs because it accomplishes all of the above. However, don’t be afraid to develop your own point scale as long as it accomplishes these points.

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