INCENTIVES: What about the workers? - Staff incentive schemes can be a vital strand of a company’s marketing plan if morale is boosted and employees are motivated, writes Julie Bird

Encouraging employees to put in that extra 10% can make all the

difference when ensuring monthly sales targets are reached, queues are

kept to a minimum or a deadline is met. All of these can have a crucial

impact upon a company’s general prosperity, so organisations that

neglect employees’ motivation and morale do so at their peril.

Rewarding staff can be a difficult task; what motivates some will turn

off others. The trouble with cash is that it can easily become swallowed

up by the gas bill. A Christmas bonus, for example, will be seen as a

treat at first, later it will be expected, and as the years go by, it

will become relied upon.

By this time, it has failed to act as an incentive and is even liable to

create resentment if reduced or withheld completely. Vouchers are widely

regarded as being good staff motivational tools because they offer

choice, enabling a company to avoid the ghastly prospect of giving

whisky to non-drinkers or free gym membership to couch potatoes.

Whitbread Leisure Vouchers, for example, can be handed out to employees

and exchanged for beer and alcohol at Threshers, meals or a night out at

participating pubs, restaurants and hotels, or health and beauty

treatments from the David Lloyd Leisure Group.

Whitbread gives out its vouchers to all its associated partners, which

Bill Brown, general manager at Whitbread, admits could be seen as taking

coals to Newcastle, devaluing the reward. ’But because recipients are

not restricted too much - our vouchers can be used at 3000 leisure and

lifestyle pursuit outlets across the UK - hopefully, this is not the

case,’ he says.

Giving something like low-value Argos vouchers is not so successful,

according to Brown: ’After all, who wants half a toaster? Having to save

up vouchers to obtain something worthwhile will take the motivational

quality out of the reward.’

What a voucher should offer, according to Alan Uren, retail operations

director at Dixons Stores Group, is a truly aspirational product, which

will thrill its recipient: ’Frankly, an electric blanket won’t go the

distance.’ Dixons vouchers, which can be redeemed at Dixons, Currys, PC

World and The Link, combine the excitement factor with flexibility, he

says.

Glittering prizes

A company can buy a Dixons voucher to the value of, say, a digital

camcorder from Currys, with all the latest gadgets, to present to the

most successful employee.

Buying a voucher means the company doesn’t have to provide or stock the

prize but can use it as the hook to incentivise its staff. If a recently

married salesperson wins, they may prefer to receive a fridge/freezer,

which they can claim, without the hassle of exchanging the

camcorder.

’However, if the fridge/freezer had been offered as the prize in the

first place, it certainly wouldn’t have appealed to the thrusting young

bucks in the sales team,’ says Uren.

Vouchers, scratch cards and prize draws can be used to denote different

levels of reward within a total strategy - a plan telemarketing giant,

Sitel Stratford, recently adopted at its three UK plants.

Its aims over the short, medium and long term were two-fold: to address

Monday attendance levels (a peak day within a call centre) and to extend

the ’life-span’ of operators.

Short-term Monday staff attrition was tackled by rewarding operators

arriving promptly at the beginning of the week with a scratch card,

giving them a one-in-ten chance of winning a prize, such as the latest

CD, video or cinema tickets. Since April when the scheme was launched,

the 20% Monday non-attendance level has halved.

For the medium term, vouchers are used to motivate staff. Each quarter

all operators, who have worked the hours to which they have committed

are put forward into a prize draw where vouchers of pounds 600, pounds

250 and pounds 150 can be won. Another draw is conducted later which

takes into account operators’ performance throughout the whole year, and

this time the prize is a VW Polo.

To keep the momentum going, Sitel Stratford also awards points to its

staff for general good practice, which can be accumulated and exchanged

for gifts at any time. Each operator is given a regular statement to see

how many points have been awarded.

’Within a call centre, it’s hard to design an incentive scheme to deal

with all the different applications,’ says Helen Hickin, teleservices

manager at Sitel Stratford. ’This one gives a commonality to suit

us.

By putting up posters of individuals who have won, it gives operators

something for which to aim and creates a healthy level of friendly

competition, which is good for the company, the operators and our

customers. It is an excellent base, and since its introduction, staff

morale and productivity have improved tremendously.

’In fact, we’ve been so impressed with the results that we are now

considering a bolt-on application, which allows managers to write out

’cheques’ awarding 500 bonus points to especially conscientious staff

members.’

Virgin Atlantic’s incentive scheme for its cabin crew could never be

accused of being utilitarian. From April to August 1997, three routes

were selected, and the flight generating the highest passenger spend on

duty free on each during a single month was pinpointed. All crew

members’ names from each of the flights were put into a draw and the

three winners given an all-expenses paid holiday on Necker Island with

Richard Branson.

Thus, during the five-month period, 15 Virgin staff were given a week’s

break (organised over two holidays) with their boss on his own private

island.

Reaping the rewards

Reward and recognition have a vital part to play within any internal

marketing strategy, but it is only one element. Viewing incentives as

the main thrust of internal marketing is akin to regarding point-of-sale

promotions as the focus of brand strategy.

’The common misconception is that internal marketing is about selling

messages to, or dangling a carrot in front of, employees. It is not. It

is about shaping behaviours so that they are aligned to the brand or

external marketing strategy,’ says James Brooke, a director at internal

marketing agency AVICoM, part of the Added Value Group.

In his diagnoses of the effects of incentive schemes for many companies,

including the Automobile Association, Royal Insurance, Mercury Paging

and two major divisions of both Lloyds and Midland Banks, Brooke found

that ’while certain aspects of the schemes worked well, all too often

they gave conflicting signals about the behaviour required of

employees.’

Many incentive schemes focus on individual rewards when the aim is to

espouse the value of teamwork, or install a reward programme emphasising

the short-term calculative relationship when the objective is to

engender a longer-term sense of belonging. One professional from a large

retail bank told Brooke that his voucher-based scheme made him ’feel

like a used-car salesman’.

A scheme must be seen to be fair. Any hint of favouritism nearly always

leads to disaster, which the AA found out to its cost. ’The strategic

requirement was to foster teamwork,’ explains Brooke, ’but the scheme

made people feel hard done by, compared with others in different, but

mutually dependent, functions,’ says Brooke. ’So much ill-feeling was

generated by the scheme that in the end Union officials co-ordinated an

employee petition threatening industrial action.’

To redress the situation, the AA redesigned its scheme from scratch.

Its first step was to identify the three or four priority measurement

criteria which most directly affected customer service - and over which

they had the most direct influence. This formed the basis of the new

strategy and the result was an incentive scheme in which each function

was measured on a team basis according to its role in the customer value

chain.

Team performance

In Summer 1992, Teamwork Pays was launched, the industrial relations

climate measurably improved and - most critically of all - performance

of those aspects of service that matter most to customers improved, such

as time taken to arrive at a breakdown and repair the vehicle.

The case of the AA illustrates that designing the right measurement

criteria is a crucial factor in the overall success of an incentive

scheme. If they reflect the customer’s priorities then the scheme will

help deliver the brand promise, if not, then it’s likely to fail.

One major high street bank got this very badly wrong when it

incentivised staff to pick up additional charges on customer accounts.

News of the scheme leaked back to the bank’s customers, resulting in a

PR debacle.

’Motivating staff for customer service would have paid greater dividends

in the long run,’ adds Brooke.

Traditionally, the automotive industry was the main user of incentive

schemes - which makes sense as the sector is all about making

third-party salespeople perform on its behalf. In the 80s large banks

began to put their staff on voucher-based schemes, but the trend is now

to focus on more sophisticated internal marketing tools, such as culture

mapping, involvement programmes and interactive events, where instead of

passively listening to the chairman’s presentation, staff are taken

off-site for a day to participate in games and processes which work as

metaphors to convey the company’s strategy.

Adventure groups

IPC Magazines’ two-night excursion for its advertising sales departments

is an unusual example of such an off-site, highly participative

team-building exercise. To encourage greater communication and social

integration among sales teams from Marie Claire, Options and Women’s

Journal, IPC Magazines called upon the help of marketing incentives

specialist, The Travel Organisation.

It came up with an adventure trip set in Jersey including a series of

challenging tasks, designed by ESIC, a company run by an ex-officer of

the British Army, to stretch each of the 70 participants. These

included: abseiling down an old German concrete tower facing the sea;

traversing a crossing of 160 feet over a drop of 350 feet; navigating

rubber inflatable boats with a non-English speaking skipper; speaking

impromptu on air with a Jersey radio station and coping with being

marooned overnight on an island off St Helier.

’Sales teams from each magazine have recently moved on to the same

floor,’ explains Claire Portis, advertising manager at Marie Claire.

’Historically, we all worked independently, but as we share agencies and

information, it seemed logical to work more closely together. The point

of this exercise, therefore, was to build a stronger team spirit. The

trip encouraged us to exceed limits beyond our normal boundaries and to

recognise in ourselves qualities we never knew existed. This has

engendered greater trust and openness among us. I would say it was a

100% success.’

IPC Magazines was so impressed with the results that another incentive

trip is planned for next year.

This type of annual incentive trip tends to produce better results than

the classic incentive company trick of selling programmes with a large

number of rewards - which generate more profit for them, as they depend

on mark-up charged to clients and a margin negotiated from

suppliers.

If incentive companies work on a straight fee basis, they are able to be

more objective about solutions needed.

Incentives are only truly effective when combined with involvement and

trust, which form the basis of Air Miles’ incentive scheme. Air Miles

allows all its employees - from post-boy to director - to reward

outstanding effort by issuing everyone with a cheque book of ’thank you’

vouchers, each representing ten air miles, to present to any other staff

member when they feel it is merited.

Cynics would presume this just gives specially friendly colleagues the

chance to swap valuable vouchers, but, according to Wanda Goldwag, Air

Miles’ director of sales and relationship marketing, ’this genuinely

doesn’t happen’.

Sign of recognition

’We realise that senior management can’t be everywhere to see good

working habits, and this system effectively gives Air Miles 600 managing

directors,’ she says. The vouchers offer an opportunity, say, for sales

executives, who spend a lot of their time on the road, to reward admin

staff for taking the trouble to pass on vital messages; or for

colleagues who offer to stay late or work through their lunch hour to

finish a project before a deadline to have their efforts recognised.

Simplicity is also key. There is still a place in today’s corporate

culture for the suggestion box, for example - something which Marks &

Spencer has found. After a break of several years, the retail giant

reintroduced this tradition - now called Ideas Count - to allow its

employees to put forward any ideas to benefit the company. Those whose

schemes are subsequently put into action are rewarded with gifts ranging

from leather goods and clocks to a day at a health farm, depending on

the nature of concept and whether it is taken up nationally.

The best internal offers

- Avoid gifts of money or anything too utilitarian.

- Offer flexibility.

- Reinforce the brand or external marketing strategy.

- Use measurement criteria which reflect customers’ priorities.

- Combine rewards with involvement and trust.

This article was first published on Marketing