Missing: Sales – Reward Offered

The case for non-cash rewards just keeps getting stronger. A new study called “Sales Performance Management 2012: How Best in Class Optimize the Front Line and Grow the Bottom Line” conducted by the Aberdeen Group and distributed by the Incentive Research Foundation (IRF) sheds some more light on the importance of recognition and rewards as part of the total compensation package. The top 20 percent of companies signify the “best in class.”

The key finding of this study is that organizations that provide non-cash recognition perform better, and best in class companies (21 percent) are more than twice as likely to provide this type of recognition as other companies (10 percent). Furthermore, organizations that provide non-cash rewards or recognition had an average year over year annual corporate revenue increase of 9.6 percent versus three percent for all others. Best in class companies also saw increases in revenue per sales FTE and team attainment of quote versus other companies that saw deceases in these areas.

“This study definitively shows organizations that implement non-cash reward and recognition programs outperform all other organizations in several major business indicators,” noted IRF Chief Research Officer Rodger Stotz in Premium Incentive Products magazine. “Perhaps the lesson to be learned from this analysis is that professional sales staffs respond to measureable rewards and recognition much like other employees, so it’s not surprising to find that companies using such programs post better results.”

IMA Responds to GSA's "Hats Off" Program

This week, the Incentive Marketing Association (IMA) released a video in response to the negative press surrounding the General Services Administrations' "Hats Off" incentive program scandal. In the video, Hinda Incentives and IMA president Dave Peer explains that the actions of the GSA are not representative of the incentive industry as a whole, and this was an isolated incident that is being handled accordingly.

In the video, Peer explains that IMA-supported incentive programs have clear goals and measures and when run properly, can boost employee engagement by as much as 27 percent. In addition, companies that offer incentive programs report higher productivity, better sales and higher profits.

View the video and read the corresponding article by Incentive Magazine writer Alex Palmer here.

Continuing the Continuing Case for Non-Cash Rewards

It’s been a great week for news singing the praises of offering non-cash rewards to your employees and in your incentive programs. Today, Incentive Magazine posted an article titled “IRF: Companies Using Rewards Post Higher Revenue Growth,” by Alex Palmer. The article gives the reader a rundown of the Incentive Research Foundation (IRF) and Aberdeen Research paper, titled “Rewards and Recognition as a Vital Compensation Component.”

According Palmer’s article, the IRF research concludes that, “Companies using non-cash rewards boast annual revenue growth more than three times those without non-cash rewards… While organizations offering non-cash rewards enjoyed a 9.6 percent revenue increase, those that did not only had an increase of three percent.”

The data contained in the IRF and Aberdeen report is the resulting outcome of an extensive survey of 291 companies released in late 2011. According to Palmer, “The survey categorized the companies into ‘best in class,’ ‘average’ and ‘laggard,’ looking at company performance and sales results, with 83 percent of best in class companies achieving annual quotas for the year compared with just 51 percent for average and 22 percent for laggard companies.”

As it turns out, the companies categorized as “best in class” were also more than twice as likely as other companies to provide non-cash incentives. In addition, “The research found that organizations that provide non-cash rewards enjoyed a 2.1-percent increase in revenue from one year to the next, while all others saw an 0.7 percent decrease,” as quoted in Palmer’s article. “Additionally, organizations that provide non-cash rewards enjoyed 34 percent shorter sales rep time-to-productivity and 10 percent shorter sales rep time-to-hire than those that do not use rewards.”

Read more from Incentive Mag here and check out the full IRF/Aberdeen report here.

Incentive Mag Continues the Case for Non-Cash

The latest cover story in Incentive Magazine discusses the benefits of offering non-cash rewards as the bulk of your incentive program, which has become an increasingly popular topic within our industry. “The Continuing Case for Non-Cash Rewards” was written by Leo Jakobson and features insight by Hinda and Incentive Marketing Association (IMA) president Dave Peer. According to Peer, one of the biggest factors driving non-cash is, well, cost.

“Cash is too expensive—it costs a lot more to deliver cash awards than non-cash awards,” Peer says. Another is that companies are “having a hard time relating the financial rewards [they have been paying out] to the results they want to achieve,” he adds. “They’re seeing that cash is not the panacea they thought.”

Building on this idea, cash does not provide any “trophy value” to the recipient, which has been a point of contention within the incentive industry as far as what motivates our clients and customers.

“In every single study and every single focus group that anyone’s ever held to get a bunch of people together and ask them what they want [for an incentive award], 80 percent said cash,” Peer says. “But at the end of the day, that has nothing to do with trophy value, it has nothing to do with shared memory, it has nothing to do with engagement. Why are you asking people what they want when you know what their answer is? Why don’t you design something that achieves the objectives you’re starting out with for the program?”

The problem, Peer suggests, is that “cash is not a motivator. It’s a compensator. I think that, more and more, the pendulum is swinging [toward that way of thinking].”

We’ve discussed this before on HindaBlog: cash is not memorable. Do you remember what you spent your last cash bonus on? I do. It was bills, and I can’t even remember exactly which bills. Whether this is your intention or not, chances are your extra cash is going to disappear into the mix of your regular compensation and be forgotten.

Non-cash and the trophy value that comes with it fosters employee engagement and creates a memorable experience for the recipient, his or her coworkers and the friends and family who may also benefit or witness how the recipient benefits from receiving the reward.

PIP Mag Talks to Dave Peer about the Benefits of Traditional Incentive Distributors

The recently released March/April 2012 edition of Premium Incentive Products (PIP) magazine features an article by guest columnist Ira Ozer, CPIM, titled, “10 Compelling Benefits of Traditional Incentive Distributors.” The article focuses on the reasons why many incentive companies are turning away from big retailers, such as Amazon, for their award fulfillment needs and coming back to incentive distribution houses.

Ozer states that the primary reasons for going with the big retailers in the first place were to be able to offer a broader selection of merchandise, and second, that the pricing seemed more attractive. As it turns out, this does not seem to be the case.

In the article, Ozer speaks to Hinda president Dave Peer about a couple of the benefits of using traditional incentive distributors. For one, incentive distributors tend to have longstanding industry experience in designing, administering and fulfilling programs for their clients. Peer says that these companies aren’t just interested in filling merchandise orders – they are committed to delivering a fully orchestrated system of recognition for program participants.

Additionally, Peer notes that incentive distribution companies are able to offer special events to their clients that retailers are not. Hinda offers the “Warehouse Dash” event in which program participants are given a specific amount of time to run up and down the aisles and grab as much merch as they can. Several other distributors offer similar events, and excitement is built around this premise, with food, music and cheering. Since distributors control their own warehouse space, this type of event is much more plausible than it would be with a big retailer.

Find out more reasons why companies are choosing traditional incentive distributors by clicking here.

PIP also showed some love this month to Hinda’s corporate social responsibility partner Helping Hand Rewards (HHR). The magazine features HHR product L.I.F.E. Jackets in its latest issue. Check out the blurb here and visit Helping Hand Rewards to browse more socially responsible merchandise options.

A Message from Michael Arkes, CEO of Hinda

It’s no secret that some manufacturers in Asia and other parts of the world have come under scrutiny due to workplace conditions and the questionable treatment of their employees. Most of us who hear these types of stories assume that the exploitation of workers is an unacceptable business practice that is only occurring in under-developed or developing economies. Unfortunately, many will be surprised to learn that the same kinds of conditions and treatment can be found right here in the United States.

Just a couple of weeks ago, I came across the Mother Jones article “I Was a Warehouse Wage Slave” – an expose by reporter Mac McClelland, who worked at fulfillment warehouses last holiday season in order to report on the conditions there. It is a 14-page article, but like any gripping story, you will not want to put it down.

But why is this on a blog focused on the incentive industry? How does this apply to us? While we at Hinda ship about 92 percent of our orders from our own warehouse, this is not the norm. Most of our competitors ship few of their orders from their own facilities, and some don’t ship any at all.

This means that the fine, upstanding corporation with the impeccable reputation might actually be having its award orders fulfilled by a “warehouse wage slave.” I’m suggesting that sometime in the future, corporations will not want their award orders fulfilled by fulfillment companies that blatantly exploit their workers. They will not want to be associated with these companies.

Fortunately, there are award fulfillment companies like Hinda that appreciate how important every team member is to delivering quality service to both our customers and their program participant. This past December, instead of abusing our employees in an effort to get them to perform, we provided them with an incentive for coming in to work every day during this short, busy season. We have created a culture where everyone wins – the program participant, the customer, our employee and our company.

We are a socially responsible award provider for your socially responsible corporate customers. Again, here is the link to the article “I Was a Warehouse Wage Slave.” Let us know your reaction.

Dave Peer Assumes Lead Role at IMA

Newly promoted Hinda president Dave Peer is also taking the helm as president of the Incentive Marketing Association (IMA) this year. As a 14-year industry vet taking the reins of an organization that’s seen a lot of change in its 13-year history, Peer says, “One of the things we are looking at is to determine what is the most effective course for the future so we are relevant for our members and we are able to support our industry,” as quoted in the most recent issue of Premiere Incentive Products (PIP).

Early in November of 2011, Peer and the IMA strategic planning committee met to review the goals of the organization moving into 2012. Four key initiatives are being focused on this year: industry trade shows and conferences; Return on Performance magazine; membership retention and recruitment; and support of IMA’s legislative campaign.

Peer notes the IMA’s longstanding relationship with the Motivation Show and the fact that attendance has dropped recently with the advent of more specialized trade events. “A task force has been formed to more closely evaluate this subject,” says Peer. “As an association we want to support the events which will recognize the greatest benefit to our industry.”

Peer also mentions the need to better utilize Return on Performanceas a corporate outreach tool and that development of relevant, educational content that will benefit readers as well as IMA members is underway. Supporting legislative efforts and the Incentive Legislation Campaign as Tax Provision 274(j) debate in Washington is also a crucial part of the IMA initiatives this year.

“As we celebrate our 13^thyear, the IMA is maturing and evolving as an organization,” Peer says. “We are challenged by a variety of factors facing our industry and it is important that the IMA maintains a leadership role and stays ahead of these changes. We will work together to support the mission of our association as the premier educator and authority in the incentive marketplace.”

Attracting new members and working more closely with other incentive industry organizations are two additional goals Peer cites as being crucial in 2012. “We are looking at our association and relationships throughout the industry with other players, and we are looking to provide a more team-oriented approach to the problems all of our members face,” he tells PIP.

Peer joins five other newly appointed officers to the 2012 IMA board. Congrats to all and good luck as we all embark upon this New Year together.