Good news. Labor productivity continued to increase in America throughout 2011, according to the Bureau of Labor Statistics. Some of this improvement is fueled by innovation and technology. An unidentified portion of this improvement has come from a practice that originated during the Great Recession of 2008: increased expectations placed on the current workforce.

We’ve all seen it. Reduced workforce, longer hours, higher demands, lower or non-existent raises and trimmed benefits. It isn’t a surprise Gallup has found that 71 percent of American workers are “not engaged” or “actively disengaged” in their work.

As the economy improves, smart organizations are shifting their strategy and beginning to actively invest in their people. We see it in renewed commitments to people performance management initiatives, namely incentives, rewards, recognition and loyalty programs.

Measurement Gap

When it comes to large investments in people, conversations frequently turn to return on investment or ROI. It’s a fair question. When organizations invest millions, they typically expect a financial analysis. Unfortunately, little action has been taken in the past to provide an objective answer.

Fear has been a frequent obstacle. What if measurement reveals poor results? Not knowing where to begin has been another challenge. Measuring ROI on traditional capital investments can be rather straightforward. Measuring results of an investment in people is a whole different animal.

ROI Methodology^TM

Getting started isn’t that hard any more. Over the last 25 years, the ROI Institute has developed and refined measurement and created a methodology that provides consistent and credible results. One of the secrets has been a logical approach to categorizing a myriad of possible metrics into five levels. The five levels include the following:

1. Reaction and Planned Action

2. Understanding and Learning

3. Application and Implementation

4. Business Impact

5. Return on Investment

Using this approach to organizing program objectives becomes beneficial when you consider the need to achieve success with Level 1 in order to assure success with Level 2 and so on, right up to Level 5, ROI. In other words, we don’t just measure business impact and ROI without understanding what is going on in the heads and hearts of participants.

Another key to success with this methodology is the philosophy surrounding its use. When used properly, it serves as an effective process improvement tool. During the evaluation of a program, barriers and enablers to success will be identified. The real treasure to be found in identifying barriers, because once gaps are identified solutions can be developed and deployed.

The Process

Another benefit to the ROI Methodology™ is that it prescribes a step-by-step process to complete the evaluation of a program. Specifically, it provides a process to plan the evaluation, collect data, analyze data, calculate ROI and develop a report.

This process takes a seemingly complicated task and makes it doable. In fact, the ROI Methodology™ is used by thousands of organizations, including Marketing Innovators, who guide clients through the process in order to measure ROI for a multitude of programs. The net result is enabling more companies to build the business case for investment in their people.

In my next post, I’ll explore how to get started and make an investment in measurement pay off.

www.roiofengagement.com

What are your thoughts on Todd’s post? Are you measuring the ROI on your engagement efforts? Let us know, using the text box below.

But engaging a workforce that represents diverse cultures and widely divergent economic conditions—especially in today’s scenario where those conditions are in continuous flux—is no easy matter. There are issues of multiple technology platforms and business practices that vary from country to country. From an award perspective, the use of gift cards was triggered in the U.S., but the use of a mobile device as a “virtual gift card” was driven by Europe. Smartphones are central delivery devices for content and award fulfillment in many parts of the world that never fully developed their “hard wired” infrastructure.

Then there’s the length of incentive programs. In the U.S., we’re accustomed to 12-month incentive programs, but markets are so volatile that in other parts of the world they have adapted more quickly to shorter, start-and-stop programs. This is definitely true in Europe and in Chile, for example. We’re seeing that companies need to bifurcate annual goals to be as agile as the world is volatile. The trend is definitely toward programs that are focused on shorter periods of time, and are specific, measurable, attainable and relevant.

A program has to be very sensitive to the profile and economic condition of each participant. For example, in seeking to engage employees, do you offer a way to extend their buying power by rewarding with items that are in reality staples, or do you offer only luxury items they may not have the opportunity to buy if they weren’t in your company’s awards program? Families’ and individuals’ economic well-being has been highly volatile, and their associated needs and wants have ebbed and flowed in parallel.

Given the multiple variables that impinge on engaging a global workforce, we find that program centralization is essential to program and brand continuity. Technology is driving and supporting programmatic centralization. For example, there are incentive-program software packages that can be translated into multiple languages and customized on a regional basis to reflect local customs and practices. Here are some things to look for when building a centralized program:

• The right web technology for execution. This includes a customizable screen interface, one-on-one communications, tracking and translating. 
• Rules structure that is well defined, customizable and trackable 
• Reporting that is accessible to all key management and specific to their region or area of responsibility 
• Communications tools that respect regional customs and languages

The investment in time and resources will pay off. Consistency, cost control, and the generation of valuable business data on a global and regional scale are among the benefits. Certainly, the driving force here is the engagement of your people…your brand ambassadors…the true drivers of your company’s market share.

What is your experience with engaging your international workforce? What challenges have you encountered and how have you met those? Please share your thoughts, using the “comment” box below.

Useful links:

Motivating People Getting Beyond Money

Cass Business School and Cranfield Management School Identify Four Types of Employee Engagement

Employee Engagement – A Leading Indicator of Financial Performance

It appears many do not. And if you are measuring ROI, are you confident that your measurement process is producing the most accurate data, data that can be directly linked to a specific objective? Gone are the days when a program’s return could be reported in ethereal terms. For example, how do you get an accurate measure of the impact of your sales incentive program? Sure, you might say, we had a spike in sales soon after rollout. But are you sure it was the sales incentive program or was it something your marketing team did? Or was it a mix of both, and can you tease out the ROI and confidently identify the contributions of each? How do you measure the bottom line impact of your loyalty programs or softer-side of recognition in a way that is valid, credible and actionable? Are your key findings good enough to convince the C-suite or are you merely talking ROI speak? Instead of talking about ROI can you actually show it?

The Incentive Research Foundation has taken a step in that direction with the launch of a free online tool. The tool takes incentive program planners through a process that shows how to estimate ROI for a program, think through cost aspects, assess potential adverse effects and create budgets.

Another approach, the ROI Methodology™, designed by the ROI Institute, is a continuous improvement process that measures program results in a way that accurately captures both hard and soft measures, along with their respective attribution, impact and return.

Given the current business environment, assessing the full spectrum of a program’s impact and return is the new norm, and it requires everyone to roll up their sleeves. How are you approaching it in your organization? What issues do you encounter that make measurement difficult? What do your successes look like? We’ll be exploring ROI measurement in depth in upcoming blogs and we’d appreciate your thoughts.

Please send them along, using the textbox below.

A total awards system, one including cash, travel, merchandise and cards, offers the flexibility needed to fine tune awards for greatest effectiveness. Cash is interesting: Intuitively, and especially in times of economic downturn, it seems the most effective of awards, and an Incentive Research Foundation (IRF)  and Incentive Federation, Inc. (IFI) study of cash versus noncash awards found that 37 percent of respondents used cash to motivate employees. However, the study revealed that non-cash awards were much more powerful. One reason could be that tangibles—such as cards, travel or merchandise—grab and hold employees’ attention.

We are finding that prepaid cards are increasingly valued by employees and employers alike. They are handy for the recipient, easy to administer and offer the employer a range of options—closed loop, open loop, or virtual/digital–each with unique advantages. Closed loop cards are just that: they can be used only at a specified merchant and are often called “store” or merchant gift cards. A variation are closed loop promo cards, which can be redeemed only within a specific time frame and usually have a lower cost to the buyer. Open loop, or network branded, prepaid cards can be for one-time use or reloadable and offer the option of a custom design. A variation is the restricted authorization network card, which may be used only with select merchants but has the advantage of better pricing than many purely open loop products. Finally, there are virtual/digital cards that can be delivered via email or mobile devices.  While increasingly popular, they do carry additional costs because of the technology required to deliver and not all merchants have the means of accepting them any not all merchants offer them yet. On the other hand, the virtual card delivered by email offers immediacy, which is of great value to an increasingly younger workforce that wants their rewards “now.” Mobile coupons are experiencing explosive growth and are changing the awards landscape.

At MI, we find that prepaid cards are very popular for both employee and channel incentives. Even when part of a mix that includes merchandise and travel, cards often come out ahead. Participants want them. Why? It gives them choice. When gas prices were rising, we saw open loop and closed loop cards used to buy gas; these days they are going for home improvement and casual dining. An added value is realized if the recipient is in a store loyalty program, they just use the card there and get an even better deal. Basically, cards supplement a lifestyle.

Travel and merchandise still have a strong role to play. Travel awards offer a unique experience and create an emotional bond, while merchandise has high trophy value. Not surprisingly, travel awards most often are part of a sales incentive program, where merchandise has a home as well as in customer service areas.

But here’s the kicker: A significant number of organizations in the IRF/IFI study had no good measure of the results of any award. To help, the IRF has developed a free Master Measurement Calculator tool that is easy to use and is designed to show the impact and ROI of incentive, reward and recognition programs.  What the tool does not do is take a deep dive into the softer aspects of ROI, an area that will be explored in a future MI blog.

What are you finding to be your most successful rewards programs? What did that success look like? We’d like to hear from you and share your successes with our readers.

First, let’s look at what a mobile gift card (also called an “ecard”) is and where stands today. A mobile gift card (or ecard) can be purchased and delivered to the recipient through their mobile device as an email link, a text message, or social media (such as Facebook). The “card” might be a bar code on the recipient’s smartphone that the merchant would scan directly from the phone, it might be coupon that would need to printed out before use (since many merchants don’t have the technology for scanning those bar codes yet), or it might be a code that is input at the point of sale or on a website. (Source: Fox Business)

Starbucks is an early leader in the use of mobile gift cards. Users simply scan the Starbucks’ ecard bar code from their smartphone into a scanner at the counter. The app has been an immediate hit and Starbucks reported that within the first nine weeks of launch, the mobile “cards” were used more than three million times.  Overall, 84 percent of the U.S. population owns mobile devices, according to SNL Kagan Research. As for the people owning smartphones, Nielsen reports that they are generally young: more than two-thirds of smartphone owners are 25-34 years old, and among the next age cohort (35-54) 54 percent own smartphones. Android is the top operating system overall. (Source: Nielsen Wire)

What does this mean for your incentives and rewards programs? Looking at the use of noncash awards, an Incentive Research Foundation (IRF) and Incentive Federation, Inc. (IFI) study of cash versus noncash awards found that 67 percent of companies in the study used gift cards in their noncash awards mix for both channel and employee programs. The Society for Human Resource Management (SHRM) published a story in HR Magazine (September 2010) that places mobile gift cards squarely in the mix of incentive and recognition programs. Delivering incentives via mobile is efficient (no more mailing plastic cards), cost-effective (reduced labor costs for fulfilling and shipping), and immediate (recipients don’t have to wait for their awards and, according to the Mobile Marketing Association, 91 percent of people with mobiles have them within reach 24/7). And there’s a strong reinforce factor: mobile incentives deliver a positive user experience and they tie the reward closer to the act they’re rewarding. Whether the reward is points, funds or certificates, delivering them electronically “means the participant has a virtual wallet on their smartphone,” says First Date VP Jim Contardi in the SHRM article.  Contardi sees mobile rewards as ideal for spot or micro awards.

Another possibility explored by the article, and already in the making, is integrating mobile rewards with social media. For example, companies could send awards from their company Facebook page and incorporate a high degree of personalization with video or text messaging. (Source: Incentive Marketing)

Despite obvious advantages and potential, including mobile gift cards into the incentive mix does have some drawbacks. First of all, you need to consider your recipients’ demographics. A younger age mix is far more likely to welcome mobile gift cards. And, don’t forget: employees will need to “opt in” to receive any rewards on their mobile device. Also consider that many people prefer the tangibility of a plastic card; it’s more “real” to them. Externally, consider the retailer. If the award is for use at a retailer, you may be limited simply because many retailers don’t have the technology in place to accept mobile. On the other hand, the Mobile Marketing Association (MMA) reports that 59 percent of “top retailers” want to enable mobile bar codes within the next year. There are also privacy issues. Be sure that you are operating within rules and regulations around use of employees’ mobile numbers.  The MMA has a complete set of best practices and you will want to work closely with legal counsel before launching a some types of mobile programs or make sure your outside provider is well versed in best practices. Finally, there may be technology issues. Different devices have different technologies and that could affect the execution of your program.

In an increasingly virtual world, and one that places high value on immediacy, mobile gift cards are experiencing explosive growth in the consumer world and are making their way into incentive programs, where they can add real value. As with any new program, think through your use of mobile awards before jumping on the bandwagon: Are they a good fit for recipients? How do they fit into your total program? Where do they fit in terms or who you are as a company and how you want to be perceived by your internal audiences? Do you have the resources—your own or an outside provider—to see that the technology is seamless? How will you measure success?

The possibilities for integrating mobile technology into rewards/recognition/incentives programs extend far beyond egift cards. Contest announcements, progress toward goals, awards notification and training tips can be delivered by mobile. Audio can carry inspiring messages and mobile video can deliver tutorials or product information. Texting is ideal for quick, personalized messages, pop quizzes, or even best practices reminders. Mobile has opened the door to a myriad of People Performance Management (PPM) opportunities. Are you ready to go there?

Are you using mobile gift cards? What have you learned from them that you’d like to share? Let us know, using the text box below.