There are many reasons you may need to end an employee incentive program: lack of budget, company re-organization/buyout, goals met, purpose served…but there are only two ways to end a program without negatively impacting participants. This week, let’s examine the two options you have when you decide it is time to stop giving employee incentives.
Ending an employee incentive program
An Employee Incentive Program ends when an organization decides to no longer give recognition and rewards to participants. Sales contests, employee performance and training awards programs are often started with an end date in mind. Other incentive programs may continue but have a clause for unspent points to expire within a certain amount of time; the same considerations apply to these programs as if you were ending them.
If you have decided to end a program, there are several considerations to make. Mainly, you do not want to abruptly end a program without giving participants a chance to spend all or part of the points earned. If you do not give notice, not only will employee engagement be negatively impacted, but if you ever decide to start an incentive program in the future, some people may not be interested in participating for fear of losing all their points earned at a moment’s notice. In order to avoid these situations, I recommend giving employees at least a 30 day notice to spend any points earned or lose them.
Another consideration will depend on how your company is billed for your incentive program. Although participants may stop ordering by a certain date, sometimes points are not paid for up front and you could continue to receive invoices for orders as the items ship out. These incentive program invoices could continue for a couple of weeks after the program has ended. Don’t forget to allot extra time and maybe even budget after orders are placed.
If your incentive program is ending because it fulfilled its purpose and helped you meet your goals, be sure to communicate this as well. Incentives are often used to help get a business where it wants to be by providing an extra reward for desired behaviors. When these goals are met, the end of a program can be more of a celebration of life than a funeral.
Pausing an employee incentive program
The difference between pausing and ending an incentive program is that unlike ending it, if you put a program on hold, it will resume in the near future. Often companies do this if they don’t want people to earn points anymore but do want people to still have access to the program and points earned in the past. If you decide to put a program on hold, make sure you communicate this with participants and tell them when the program should resume. If you put a program on hold without a date of resumption, it can be just as upsetting to employees as ending the program.
Not all companies allow participants to place orders while the incentive program is paused. This makes putting a program on hold ideal for organizations going through structural changes or budget restrictions. If you decide not to allow people to place orders, be sure to communicate the reason why this is being done so that your ramp up time is decreased when the program resumes.
Starting an employee incentive program to end it well
When a program is started and management knows that points are going to expire at the end of the year or that the incentive program is going to come to a close by a certain date, be sure this is communicated from the start to participants. Sometimes clients of mine will have a certain budget already worked out for the program and one of the easiest ways to ensure the program budget is spent (and adhered to) within an allotted time is to prepay for points as they are awarded instead of as points are spent. Clients of mine who have prepaid point incentive programs receive credits if a participant is no longer eligible so that the unused amounts can be put back into the budget.
If employees have accrued points for several years, they have more than likely been saving up for a highly desired item. Abruptly ending an incentive program without communication or letting people redeem what has already been earned can severely impact employee engagement and trust. Instead of losing this trust, be sure to follow these two options to end your incentive program.
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