Organizations are looking at new ways to understand and measure the effectiveness of incentive programs on non-sales employees.
Sell this, get that.
In its most basic form, the effectiveness of an incentive program has traditionally come down to this benchmark for success. Employees reach a specific level of sales and receive a promised incentive.
In many organizations that’s where return on investment (ROI) has stopped – with little formal analysis of program effectiveness. Instead, the recent SITE Index found that “the success of a program is assumed to reflect in the overall success of the organization.” In other words, if the company is doing well, the incentive program must be working.
The SITE Index also explored why organizations operate incentive programs in the first place – and by that count, the reasons were interesting. “Improved employee engagement,” “strengthened employee loyalty” and “emotional commitment” sat at the top of the list of reasons.
Incentive providers have long sought ways to express the effectiveness in areas like these – proving that incentives are contributing to the success of the organization or achieving the intended objectives of the program. The goal is to use this data as a way to prove the business case for incentives, to maximize scope when companies are doing well, and to guard against budget reductions in leaner times.
To that end, incentive providers are developing tools to quantify non-sales metrics to tell a more complete ROI story.
Specific ROI models are emerging from providers. “ROI is comparing the cost of a program to the net monetary benefits resulting from the program,” explains Suzanne Schell, CEO of the ROI Institute Canada. “The ROI Methodology is a formalized 10-step process enabling organizations to evaluate programs to ROI.” The first step is critical – connect the program to business impact measures. “It’s becoming very common for executives and funders of programs to ask Can you show me the money? Will this be a good return on our investment? With a formalized process embedded in the program to evaluate to the level of ROI you are able to credibly answer those questions.”
Organizations increasingly understand that success comes from a broad spectrum of employees. Sales generate new leads. Operations create long-term client loyalty. IT enhances the customer experience. This understanding leads to organizations including a broader range of employee positions within incentive campaigns – and can often mean the need for unique objectives and measurement.
Moving beyond sales results.
There is a shift towards understanding how incentives affect benchmarks beyond straight forward sales results. Some organizations are finding ways to correlate everything from customer loyalty scores to employee engagement metrics. Tools like Maritz’s CultureNext, Aimia’s ECHO Scoring and ITA Group’s Insights provide information on benchmarks such as employee engagement.
Thinking about generational needs.
Three separate generations now populate the employee workforce – Baby Boomers, Generation X and Millennials. The most savvy organizations understand that each generational group is driven by a different set of factors. Millennials for example, look for a strong component of personal recognition within incentive programs. The Clarity Survey employed by USMotivation draws on qualitative data in an organization to measure employee emotions and deliver statistical conclusions based on that information. This has included an understanding of different generational subsets.
These days, the most advanced programs have become so much more than “Sell this, get that.” There continues to be an opportunity to make the case for ROI in ways that help organizations grow, compete and succeed.