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.

You’ve already heard the generational stereotypes: rigid “traditionalists,” spendthrift Boomers, conservative Gen X-ers (maybe a backlash against the Boomers?), and the ever-questioning Generation Y whose need for reasons has given them the nickname “generation ‘why’.” But when we dig a little deeper, we find that beneath these easy labels there’s a lot of information that can help us to engage, motivate and reward every employee in ways that resonate with them. In our work with clients, we see again and again big differences in the ways the generations communicate. Take meetings, which used to be considered the best way to get a message across to a wide audience—and they still are, in some cases. We’ve seen that Baby Boomers love meetings. They love the dialogue, making sure everyone is on the same page, and verifying everything. But meetings can be torture for Generation Y employees, those 29 and younger. They just want quick, concrete, succinct communications: “Tell me what you want and I’ll get the job done. I’ll exceed your expectation. Just don’t hover and don’t tell me how.”

And this brings us to the platform for those communications. Different generations respond positively to different platforms. Here’s an example: One of the panelists at the Summit said he repeatedly called his Generation Y son on the son’s cell phone. The son wasn’t responding. So the father sent an email. Still no response. Finally, he sent a text message. Instant response. Why? The son didn’t want a long phone conversation or to take the time to draft a reply email. “Text me and I’ll give you a quick answer” is what he told his dad. In fact, according to Pew Research Center’s Internet & American Life Project, 31 percent of all cell phone users prefer texting over phone calls.

So what does this mean for your programs? It means digging deep into the demographics of your workforce to understand the generational make-up. It means re-thinking your program’s communications campaign and feedback loops, and re-crafting them in ways that ensure they resonate with each generation. This will probably mean multiple platforms for the same message: Tweets and Facebook for Gen Y, meetings and maybe webinars for Boomers, memos for Traditionalists. It means revamping your awards. Generally, Boomers have had the privilege of riding a strong economy and have spent accordingly. When we reward a high-performing Boomer with a luxury gift, we’re telling them that we know they enjoy and appreciate the nice things in life. When we reward the achievements of Generation Y employees with generous access to downloadable music, we tell them we understand them. And the Traditionalists in your workforce are most likely to appreciate a more formal, tangible, and probably public, form of recognition.

This sounds complicated, so you might wonder, Is it worth it? Yes it is. When your employees can access your program’s communications in a way that is most comfortable for them, you’ve engaged those employees. It’s important to remember that offering the various means of communication to everyone and letting them choose how they want to be engaged will allow for individuality across and within each generational group. When they receive performance updates through a medium that is integral to their lives outside of work, you’ve engaged and motivated them. And when you recognized their performance with rewards and the kinds of recognition that are meaningful to them, you’ve reinforced that performance and engagement, and probably increased their sense of loyalty as well. Most external marketing campaigns take into consideration audience segmentation and one-to-one messaging. It is time that programs aimed at engaging and impacting employee performance use similar considerations for reaching internal people, one-to-one.

By communicating with, engaging, motivating and rewarding your employees in ways that are meaningful to them, you’ve strengthened your business’s position. According to Gallup, there’s a direct connection between increased employee engagement and ROI. Gallup reports typical gains at the organizational level of nearly 7 percent in quality and nearly 6 percent in safety, for example. In the Gallup meta analysis of 152 organizations, those with world class engagement had 3.9 times the EPS (Earnings Per Share) growth rate.

Increasingly, we find ourselves counseling clients on cross-generational and multi-generational issues affecting their incentive programs.  It’s a dynamic that will grow in importance as the timeframe for generational distinctions shrinks. Do you have insights to share regarding a multi-generational workforce? Just use the textbox below. We’d like to hear from you.

Link suggestions

For one author’s take on social media’s role in analyzing performance:

http://goo.gl/lhF9q

Tips on easing cross-generational work relationships:

http://goo.gl/CTRzV

Video taking an in-depth (38 minutes long) look at managing generations X and Y:

http://goo.gl/JFr5Q

These days, few businesses are self-contained entities and the competition exists not between companies but between networks.  Businesses today sit at the heart of an extended set of connections where the quality of relationships—those networks of suppliers, employees, and customers—determines the organization’s success.

To that end, many organizations are tapping into the internal collective by leveraging social media to build communities of practice (CoPs) supported by a variety of tools (Blogs, Discussion Forums, Bookmarks, File Sharing, Wiki). We can think of an organization’s communities of practice as the business equivalent of social media’s “communities of interest.” In communities of practice, cross-generational perspectives and subject matter expert input are applied to organizational goals, best practices are shared, and organizational knowledge is transmitted. (Source: astd.org)

It really is all about a new way of sharing, getting feedback on ideas or approaches, brainstorming and a new way of learning. Because these social systems can reside behind a corporate firewall, employees get connected and feel free to discuss internal business topics. Residual benefits, above and beyond quick access to knowledge, include expansion of company connections and the establishment of personal digital identity and reputation. This in turn, can lend itself to social acknowledgement, validation and recognition. By focusing the tools of social media on the power that lies in the diversity of the workforce and the value-adding communities its members create, organizations now have a confluence of varying perspectives and expertise enhances collaboration and sparks innovation, purpose and passion—all of which can be incentivized, rewarded and recognized with formal and informal incentive and recognition programs.

In order to successfully sense and respond to today’s marketplace, organizations must be agile, adaptive, and able to bring their best talent to bear as challenges emerge. The connections formed by communities of practice, and driven by the tools of social media, lead to creative thinking, which leads to innovation, which leads to transformation in business—in other words, a formulary required for success in today’s rapidly changing marketplace.

Everything is changing…everything has changed. Social media tools are already commonplace, and if you don’t have plans to incorporate these tools into your organization then you are already behind the times.

Is your organization using social media in its motivation and recognition programs? In yes, how? If not, why not? Let us know by posting your thoughts below.