Employee incentives and rewards for work well done have long been known to be effective motivators. Millions of dollars are spent on annual incentive programs to boost employee engagement and motivation. It is also well known that high levels of engagement are directly related to higher levels of customer service, customer retention and profitability.
However, the slower economy over the past few years has taken its toll on incentive program implementation. Reward programs such as team travel to exotic locations were abandoned and/or scaled down, and bonuses sometimes disappeared. And so, as our economy improves, the question is, will attention to revamping employee incentives return as a key organizational driver?
The answer was found in the June Canadian Incentive Trends Survey, and it's a bold and aggressive yes. The survey, conducted by Toronto-based Berkeley Payment Solutions, sought the opinion of 429 Canadian business leaders. These leaders strongly indicated that building a culture of employee reward and recognition would see a much higher focus for their attention, especially over the next year.
The survey also indicated that a large number of businesses do utilize corporate incentive programs for employees. Survey participants also strongly supported the notion that incentive programs increased employee motivation and their overall competitiveness. Not only that, incentive programs are seen by these executives as excellent attraction and retention tools for potential new employees.
As we all know, as the baby boomer employee group begins to more aggressively move into retirement mode, the issue of attraction and retention of new employees will become much more critical. As a result, organizational executives appear to be developing strategies that not only ensure the stability of assigned budgets for incentive programs, but may also lead to budget increases in the coming year.
At the same time, the survey exposed an interesting dynamic among the various incentive offerings. For instance, the survey participants indicated that the once highly popular retail gift cards or certificates were no longer providing the highest return on investment. Instead, these leaders saw themselves turning to prepaid MasterCard or Visa cards as being most preferred by employees and therefore a better overall investment.
Prepaid MasterCard or Visa cards have been popular in the United States for several years and this trend is finally moving into the Canadian market. However, many Canadian leaders and HR professionals are not fully aware of what prepaid corporate incentive cards are all about or how they work. Reloadable cards, for instance, allow you to continue to add a designated financial reward as needed. Reloadable cards have become popular as customer loyalty programs or for sales staff incentives. They are also being more frequently used for employee incentive programs. One of the reasons for its increased usage is the ease of remote reloading.
A second type of incentive card is the single load card that allows you to load a certain dollar value onto a prepaid card. The single load prepaid cards are similar to gift cards commonly seen at bookstores, but offer more versatility because the cards can be used at any business venue where Visa is accepted. The single load prepaid card creates a one-time reward. It is a low-cost means of offering rebates and refunds and, as well, it is proving to be effective for single event employee incentive programs.
As expected, new ideas create opportunities for new businesses and such is the case with Berkeley Payment Solutions. Behind this fast growing business is a former Winnipegger, Jonathon Hamburg, who pioneered the prepaid employee incentive card concept. Together with his university chum David Eason, these two innovators have built their five-year-old business into a powerhouse that has become a Canadian leader in the field of prepaid incentive cards.
According to CEO Eason, one reason the prepaid employee incentive card business is so successful is that the cards have universal appeal. Prepaid cards are as good as cash and not only that, employees have the freedom to spend the money however they wish. This supports the notion that rewards need to be immediate as well as meaningful to employees.
The prepaid card concept also has significant benefits for organizations. For instance, corporations and organizations can put their own business brand on their Visa prepaid card, which in turn supports their marketing plan. They can also customize their message to the card carrier. The cards are versatile as they can be used for both customer and employee incentive programs.
In addition, whereas the cards effectively utilize an organization's own internal technology, business owners will find that a prepaid card program can streamline administration costs, facilitate more targeted and customized communications with employees, the sales force and/or customers and overall reduce time and costs of the incentive program itself.
While the prepaid incentive card is proving to be a hit with many employees and is enhancing an organization's ability to attract new talent, increase performance and retain employee loyalty, business leaders must carefully plan and effectively implement their program.
Prior to implementing any plan, organizations must be clear about the objectives and ensure that the elements of the program will indeed be motivating. Conduct an employee survey to find out just what interest employees have in the various incentives you are thinking about. At the same time, be sure to communicate to employees how your new incentive program fits into your organizational culture and strategic direction.
You also need to ensure that your program applies to all employees and not just those in a sales role. Employees must be able to see the potential success of attaining the incentives offered and if and when possible, your incentive programs should be fun. Incentive and reward programs should encourage employees to not only enjoy their participation, but also feel good about their own accomplishments as well as those of their employer.
Regardless of the type of employee incentive program, it's critical that strategies be put in place to measure success. For instance, the recent Canadian Incentive Trends Survey, found that while few participants actually measured their success, of those that did measure, approximately 91 per cent were able to confirm that their employee incentive program was indeed moderately to very successful.
Finally, while employee incentive programs such as the prepaid VISA card are proving to be successful, programs must continually be reviewed, revamped and reinvented to ensure success in creating a win/win motivational work environment.
By: Barbara Bowes
Barbara J. Bowes is president of Legacy Bowes Group and vice-president of Waterhouse Executive Search.
Republished from the Winnipeg Free Press print edition July 2, 2011 H1