Want to improve recognition and incentive programs? Your best move is to leverage technology. The advantages of online programs can be your magnet to success

HR Magazine, Sept, 2005 by Michelle M. Smith

In today's market, organizations are trying to do more with less and achieve maximum return on investment (ROI) in their people--all part of a concerted, strategic effort to boost corporate performance. Most employers focus on improving productivity and service levels with their own employees first. Wise employers know they must also include the other stakeholders in their corporate success--dealers, distributors, vendors and customers.

Great Service = Happy Customers

The average business loses between 10 percent and 30 percent of its customers annually. As such, it is imperative that organizations focus on improving customer service because it can have a dramatic impact on the bottom line. For example, according to a Harvard Business Review article, "Zero Defections: Quality Comes To Service," organizations that retain just five percent more of their customers will increase profits by 100 percent.

Additionally, on average, satisfied customers tell five people about their experience compared with the nine people who hear about a negative experience. Accordingly, satisfied customers help build brand integrity and corporate trust. The most effective way to satisfy customers is to make certain that they are served by satisfied and engaged employees.

Regardless of profession or title, work history or aspirations, the most satisfied employees are those who feel their unique skills and talents are recognized, valued and utilized. Those companies that encourage, enable and reward high performance tend to get more of it. It's a virtuous circle, and increasingly, it's a compelling corporate differentiator.

A New Generation of Solutions

A new generation of incentive and recognition solutions is leading the charge toward improved employee and corporate performance. These complete, enterprise solutions offer a myriad of advantages and capabilities compared with traditional incentive and recognition programs. They are designed to consistently reward behaviors that are aligned to corporate goals. And, they are rooted in technology and can, accordingly, change at "Internet Speed" to keep up with the fast-paced changes of today's organizations and economy.

These next-generation reward programs are becoming an industry standard among companies consistently ranked as the most financially successful and most admired. It's no wonder, since companies placing employees at the core of their plans produce higher long-term returns to shareholders than do their industry peers. In fact, a Gallup survey found that organizations, where employees have above average attitudes toward their work (that is, high employee satisfaction), have: 38% higher customer satisfaction scores, 22% higher productivity and 27% higher profits.

The most critical aspect of these next-generation recognition and incentive programs involves their ability to align strategic business objectives with the people who will execute on that strategy. A successful recognition and incentive program is designed specifically to support organizational alignment--driving both performance and productivity. They do this by creating a link between the overall goal and individual contribution. People want to be successful and want to be players on a successful team. Accordingly, they need to clearly understand their role in achieving the success. Thus, organizations can build and sustain an organizational culture that rewards top performance by consistently measuring desired behaviors and reinforcing performance that achieves desired results. The new generation of online recognition and incentive programs not only support organizational alignment, but also provide seven critical enterprise advantages.

Advantage #1: Spur Ongoing, Enterprise-Wide Communication

By leveraging the universal accessibility of online communications technologies--e-mail, Web sites and more--today's best incentive and recognition solutions communicate with all program constituents in a voice they will not only hear, but also listen to. Program communication costs drop substantially in an online program, allowing companies to build better relationships with more frequent, more robust and more effectively targeted messages. Communicating becomes more flexible, enabling program administrators to quickly convey evolving program information or change programs to adapt to a changing business climate.

Ongoing communication of program objectives, successes and milestones are critical to overall program effectiveness. Online recognition and incentive solutions communicate with participants throughout the cycle--from program launch all the way to award selection and delivery--ensuring tight correlation between behaviors and incentives. The speed at which 'participants receive information also gives the program a sense of immediacy and helps to keep it fresh.

Advantage #2: Measure, Track and Analyze

What is the yardstick for program success? Reduced turnover? Improved service? Lower accounts receivables? Increased sales? Reduced costs? What is the minimum acceptable goal level? What is the expected goal level? What is the best-case goal level?