In 1979, interviewers asked new graduates from the Harvard’s MBA Program and found that : 84% had no specific goals at all, 13% had goals but they were not committed to paper, 3% had clear, written goals and plans to accomplish them
In 1989, the interviewers again interviewed the graduates of that class. You can guess the results: The 13% of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all. Even more staggering – the three percent who had clear, written goals were earning, on average, ten times as much as the other 97 percent put together.
Lack of a strategic plan: Organizations often make the mistake of viewing incentive programs as a simple do-this, get-that offering, without understanding that incentive programs actually are fully integrated one-to-one marketing programs designed to change behavior in a positive way. Incentive programs require no less a focus than any other marketing plan, with a written document spelling out the objectives; the ways to achieve them; the strategies to be deployed, and all the other details of the plan, including budget and anticipated results.
Impossible Objectives: Programs often fail because goals are designed based on what the organization requires, rather than on what is actually feasible. People simply tune out when they know the gain is unattainable. It pays to benchmark any goal against what the organization has achieved in the past and what it can realistically be expected to achieve based on the economic conditions in the industry, the competition, and any other issues that could materially affect a desired outcome.
Program is based on cloud-ended formula: In order to control the budget, many organizations (without knowing the name) use what’s known as a closed-ended approach to planning the program, which means that they pre-determine how many people will win. This approach almost automatically guarantees that your top performers will be the only ones to engage, since everybody else will figure they don’t have a chance. The best programs include an open-ended component, meaning that anyone can win based on improving their own performance against some benchmark.
Lack of communication or understanding: Many organizations figure it’s enough to select exciting rewards and announce the program and results will follow. In fact, successful programs include a dedicated multi-touch communication effort that touches people through every medium possible or feasible, based on the potential return-on-investment.
Inability of people to do what is required: It’s not enough to want to do something; one has to be able to do it. Many programs overlook the training component that should work alongside your incentive program to make sure that you’ve identified the key skill sets required to achieve an objective, and that your people have received the chance to address any personal deficits. Incorporating online information and quizzes into your communications program can help.
Inappropriate rewards: Ideally, your program addresses intrinsic needs for success and satisfaction by placing the value on accomplishment, and not solely on the reward. That said, the rewards send a message to the organization about how much accomplishment is worth. Reward people who have worked a full year to accomplish the goal with a T-shirt, and it’s unlikely you will see a repeat of the same effort in the following year. Rewards should be commensurate with what is asked of people. They should be memorable and involve significant others and/or the family, if possible, so that your key people get regular positive reminders of their accomplishment and of your organization.
Lack of measurement and feedback systems. A surprising number of incentive programs lack formal systems for measuring results, return on investment, the reasons behind specific outcomes, so that the organization can use that information to make future efforts better. Many organizations feel it’s enough to identify whether or not the goals were achieved, rather than to understand why. This fails to take advantage of one of the key benefits of incentive programs; i.e., the ability to specifically target an audience and determine how the effort positively or negatively affected performance. This provides invaluable information for developing future strategies.
Incentives are serious business: sales incentives alone now represent a $127 billion industry. The past five years have seen a groundswell of academic research that not only quantitatively proves incentives are a legitimate tool but also drills down further to define which incentives are most powerful for the demographics involved and the specific behaviors desired.
Not giving programs enough time to flourish, engage and produce. Make sure the incentive program is sufficiently long enough. The most successful programs average two years; programs extending beyond one year produce an average 44 percent gain. Give participants enough time to earn points, accrue a decent amount, and revel in their achievements.
Rewards are not sustained. According to Andrew Sykes, a well-respected wellness actuary, the reward must be delivered on a sustained basis to promote the behavior long term. Reward programs that give a 1x/year premium reduction or a 1x/year incentive for completing a form will not drive any sustained behavior change.
Your rewards don’t motivate. Daniel Pink, author of Drive, asserts that motivation is the combination of mastery, autonomy and purpose. If you want to motivate desired behavior, is your rewards program triggering mastery, autonomy or purpose? Consider rewards that get out of the financial realm and get into the social EveryMove, Inc. | 411 Fairview Ave. North, Suite 200 Seattle, WA 98109 realm by creating rewards that employees will feel connected to and remember the “why” when it comes to driving new behaviors.
The effort to change behavior is simply not worth the money you are spending. Dan Arielly, author ofPredictably Irrational, acknowledges that money might be the most efficient reward, but it forces people to calculate in economic terms whether the behavior change is worth it – and in health care it’s usually not.
Check out our slide share on Building Incentive Programs that Drive Results: