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.”

The Incentive Research Foundation Talks Top Trends for 2012

The Incentive Research Foundation (IRF) recently released a new white paper titled “2012 Trends in Rewards & Recognition,” which highlights 12 key areas of focus in the incentives marketing arena for this year and what changes we as an industry can expect. The folks at IRF make several great points with regard to noncash incentives that we’d like to summarize here on Hinda Blog, and feel free to peruse the research for more information.

The report opens by explaining that change is in the air, and companies are starting to re-evaluate how they do business and utilize their human capital. “Fast HR” is a movement that the IRF points to that “encourages throwing out standard tools in favor of more expeditious methods to direct, focus, and energize employees.” The report goes on to add that non-cash is aligned with the Fast HR model and is becoming increasingly attractive to the C-suite, which it views as being one of the biggest trends to watch this year.

“Today,” reports the IRF, “a new wave of respected thought leaders that include McKinsey, Harvard Business Review, PricewaterhouseCoopers and Aberdeen acknowledge the effectiveness and/or strategic business value of noncash components.” In one example, the IRF points Aberdeen’s annual “Sales Performance Management Study,” in which it was uncovered that 21 percent of best in class companies – those that out-performed rivals across all major financial categories – utilized reward and recognition programs, while only 10 percent of non-best in class did.

Studies conducted by the other thought leaders named in IRF’s report realized similar outcomes. Noncash is on the rise, though it doesn’t come without its share of challenges, specifically that “noncash programs must complement other strategies and initiatives, the nomination/winning process must be clear and the evaluation/selection processes must be transparent” in order for noncash recognition to be effective, according to IRF’s research.

Incorporating another hot trend but staying within the realm of noncash, IRF explains that wellness programs are high on the list, and goes on to say that, if your company does not utilize a reward and recognition program currently, wellness is a great place to start. In 2009, the US spent about 17 percent of its GDP on healthcare, and yet America as a whole is not a healthy country, according to World Health Organization statistics.

Wellness programs can and should be worked into an organization’s current incentives bundle, according to the IRF. “Noncash incentive additions to wellness programs have been shown (Johnson & Johnson, for example) to increase voluntary participation by up to 90 [percent], a finding from ‘Big Fat Truth about Use of Incentives for Wellness Programs,’ published by the Incentive Federation.” Not only does this make for healthier people overall, but as we all know, fewer sick days makes for more productivity and lower health insurance premiums for companies – a winning situation all-around.

One final trend of note with regard to noncash – or any type of incentive, really – is retention and culture, which acknowledges, among other things, that “a lack of consistent recognition has impacted the ‘cooperative’ nature of some work environments,” according to the IRF report. “Recent research… show[s] that employees at ‘rewarder organizations’ generate ideas 250 [percent] more frequently than employees of organizations that are not rewarders.”

Whether your company has a stellar rewards and recognition program in place, a less-than-stellar one or none at all, the IRF has provided plenty for you and your employees to consider as we move along in 2012. Again, check out the full report and feel free to let us know your thoughts in the “Comments” section below.

Motivation Across the Nations

Hinda’s own Marlene Johnson was interviewed recently for the article “Motivation Overseas” in the January/February issue of Premiere Incentive Products (PIP). Writer Deborah L. Vence talks with Johnson and two other industry experts about the implications of offering your company’s recognition programs at its non-US-based branches. The most important factors to consider here are technology and cultural awareness.

“The most efficient way to operate a global incentive program with a technology platform that translates globally, but is personalized at the local level,” Johnson explains. “By that I mean the platform is offered in the local language, supported by local currencies [and] awards are locally relevant and distributed at the local level.”

The article states that some of the best practices to use when establishing a global incentive program include developing a clearly defined, concise strategy for global recognition, offering opportunities for employees at all levels to be able to participate, and listening to what your employees need and want, perhaps inviting them to join in on the strategizing discussion.

With regard to the reward itself, the article states that one of the biggest challenges includes consideration of language, geography and cultural differences. Also, be sure that the reward is structured into your company’s long-term program of recognition and isn’t just a one-time opportunity.

One of the most important things to remember during the process of developing your global program is the cultural and/or ethnic implications that will surely come into play. “There are considerations to be taken in every corner of the world,” Johnson says. “Some award choices may not be appropriate for certain marketplaces, etc. Understanding those nuances is critical for the successful deployment and continued success of a global incentive program.”

Additionally, different cultures respond to recognition differently, according to the article. Language can be an issue, as most employees would want to receive recognition in their own language. Making sure that each employee understands the parameters of the program and choosing the most appropriate award choices are two important considerations that need to be taken within your global recognition program.

The bottom line is that global recognition should be fun and engaging for employees at every level of your company, and should be integrated into your company’s overall culture of recognition. Being aware and sensitive to technological differences and cultural/ethnic values and protocol is essential and should not be a roadblock for your successful program implementation. Your strategizing sessions are also a great opportunity to learn a bit more about the important people in your company and their values and lifestyles!