Incentives: The rewards of work

Randle Stonier, chairman of marketing communications agency Euro RSCG Skybridge, believes incentives are more important than ever as brands interact with consumers in more complex ways, and staff must be fully committed to maintaining the brand's values. 'With customer relationship management, brand diversification and new retail models, there are more audience touch-points that are crucial to brand perception and loyalty.'

Stonier adds that enlightened organisations are taking a more marketing-oriented approach to their internal programmes. 'Some businesses are now realising you should be researching from the end-user perspective.'

With this greater emphasis on frontline staff delivering customer service and a greater reliance on outsourcing, incentivisation no longer applies solely to the sales force. 'Companies have had years of successfully using incentives for sales forces and third parties,' says John Sylvester, director of motivation for performance management agency P&MM. 'They are now realising that they can get the same results within their own organisations.'

This has meant bringing the same level of professionalism to internal campaigns that brands expect from their outward-facing communications programmes. There is no reason why properly themed incentives cannot provide a platform that is inspiring enough to target an entire organisation, according to Richard Kirk, chief executive of Projectlink Motivation.

His agency ran a campaign for MFI last year that targeted staff in 225 stores and aimed to motivate workers from cleaners through to store managers. The 'Countdown to a million' scheme offered the victorious team the chance to win £1m by smashing MFI-branded piggy banks at a special event. It resulted in a sizable uplift in fourth-quarter sales at the retailer.

This kind of cross-company activity is becoming more common. UK agency Capital Incentives was bought last year by benefits firm Accor in a move that shows the increasing integration of benefits and incentives. 'Flexible benefits and incentives used to be thought of separately,' says managing director Graham Povey. 'Now companies such as Capital, Grass Roots and P&MM are introducing lifestyle packages.

We are working with more HR mana-gers on reward and recognition programmes where a manager is given £1000 a month to give staff rewards of £25-£50.'

Andrew Sellers, corporate business manager at John Lewis Direct, agrees that companies are using incentives in a broader way. 'In the call centre environment, where call-handlers are employed at roughly the same salary across the industry, it's the small things that make a difference to the workforce.'

Fast turnaround

Vodafone used John Lewis Direct to send a bottle of champagne to a team that had achieved a project ahead of time and on budget. Such a discretionary approach allows employers to target incentives more widely to reward attendance, productivity, customer service and good ideas.

The key to reward and recognition in this environment is to make awards as instant as possible. This spontaneity is hampered when rewards have to be ratified and paperwork completed, risking resentment rather than good will.

John Lewis relaunched its vouchers last year with an online redemption element. The innovation addresses two issues, says Sellers. 'We want to grow our online business and when people are in front of a screen all day, the PC is their interface with the world, so they can spend their reward there and then.'

Successful schemes are not prescriptive, so despite a sometimes dull reputation, vouchers are the most popular choice of reward after cash.

'The problem with cash is that no one ever remembers what they did with it, so its motivation effect is lost,' says Sellers. 'With vouchers, people will treat themselves and tell their colleagues about it.'

While vouchers have long reigned supreme as an employee reward currency, recent years have seen the growth of more leisure-oriented corporate incentives, blurring the boundaries between life at work and outside. 'Experiential rewards are ideal in this situation, especially if they offer something unique that the recipient would not normally do or have access to,' says Andrew Johnson, sales and marketing director at Virgin Incentives, which offers such diverse days out as working with sheepdogs, falconry, or the ever-popular motorsport days.

Stonier believes that the emergence of the work-life balance issue and corporate social responsibility have helped organisations produce more imaginative motivation programmes. He points to schemes run by Vodafone that see staff give something back to the community rather than going off on expensive jollies. 'You can offer staff the chance to undertake worthwhile experiences in a way that is synergistic with corporate objectives.'

Others are not so sure of such schemes. 'They are not as popular as marketing directors might think,' says Sellers. 'For one thing, they are not cheap and booking can be a problem.'

Of course, the reward is only one element in the success of a campaign.

P&MM's Sylvester says that although everyone focuses on the reward, peer recognition is the more important factor.

'The real value is that everyone stops work and cheers the person who is being recognised.'

Leisure Vouchers sales director Murray Leslie adds that presentation is often overlooked. 'So often a presentation involves handing over a piece of paper for the award, which can be an anticlimax. Packaging can capture the excitement of the event.'

What makes a good reward depends on the organisation. P&MM runs its own recognition programme where the top prize is a dedicated car parking space directly outside the office. 'It is the only nominated parking space for the company so it conveys exclusivity. It's a badge of success,' says Sylvester.

Projectlink's Kirk adds that the appropriateness of a reward is vital.

'We conducted a safety campaign for Shell in the North Sea where the recognition for achieving targets was a Swiss Army knife. You can't bribe people to be safer.'

Online benefits

Although the nature of rewards has changed little, campaign communication has been radically altered by the internet. Because corporate incentive programmes typically target smaller groups, the cost per head is high, but the internet allows companies to cut the cost of marketing materials as well as refresh and update communications.

Paul Hunter, business development manager for High Street Vouchers, believes the future of corporate incentive schemes lies with online reward management systems. 'Corporate customers have not yet realised the benefits off-ered by online incentive schemes,' he says. 'They are hassle-free for the client, and markedly reduce administration time and costs.' The company's Love2Reward system issues virtual incentive points, allowing employees to feel empowered and receive instant rewards, says Hunter. Staff can control their own rewards and be notified of the receipt of points.

When it comes to incentive options, companies often opt for the old favourites, according to Andrea Born, head of business incentives at House of Fraser. 'While vouchers are often accused of being dull, sales totalled £1.38bn in 2004, and our sales rose 20%,' she reveals. 'They remain popular because of the choice they provide.'

Indeed, such flexibility will remain key - as Thomas Cook business-to-business marketing manager Katy Lefevre says, the requirements of corporate customers will always change. 'People today have different lifestyles and corporate incentives must complement this.'

CASE STUDY - ROYAL MAIL

Royal Mail is one of the UK's biggest employers, with 170,000 staff spread across the country. However, high levels of absenteeism were affecting its ability to meet stringent targets set by Postcomm, the postal regulator.

On any given day 10,000 staff can be absent from work for a variety of reasons. The knock-on effect to the organisation is huge and costs run into the millions. Efficiency is also compromised, as agency staff have to be brought in to plug the gaps.

Workforce-management relationships have been adversarial in the past, but the company decided to take a new approach to motivating staff. This has included its first incentive programme.

'We have introduced a range of initiatives including an incentive programme. We are trying to create a more adult relationship with staff,' says Jonathan Allen, head of employee relations at Royal Mail Group. In a bid to improve attendance, Royal Mail has overhauled the relationship that managers have with their staff. With every absence, a conversation is now held between the absent staff member and their line manager, which is maintained for the duration of the absence.

It has also outsourced its occupational health service to provide more support for absentees, and linked the contractor's reward to absence rates.

As an incentive to cut absenteeism, Royal Mail ran a company-wide programme offering staff the chance to win prizes if they had a 100% attendance record for six months. Employees who reached this milestone were entered into a draw offering 37 Ford Focus cars as prizes, along with 75 lots of Thomas Cook holiday vouchers worth £2000 and 90,000 money-off holiday vouchers.

Allen said the incentive programme allowed Royal Mail to raise the issue of attendance in a positive way. Results were positive, with attendance rising by 11%, equating to an extra 1000 people a day at work.

Royal Mail is running the campaign again, and has raised the bar on expectations.

This time, employees who manage 12 months without absence are given extra chances to win one of 39 cars and smaller prizes such as high-street vouchers.