Incentive Intelligence

RSS Feed Homepage

Articles: 1, 2

Unintended Consequences
2007-07-02 11:47:00
I just finished reading an article in the Sunday paper highlighting the success of a safety program for a small city nearby.  The article said the program saved over $180,000.  Half of the savings will go back to the city and the other half will go to the employees in their paychecks - averaging about $400 per employee.  The employees shared approximately $50,000 last year. Here's my prediction for this type of program.  Next year the safety record will go down - in other words the city will show either an increase in safety related costs - or no increase at all.  But in the following year there will be a huge decrease in costs resulting in a huge savings.  That savings will be split with the employees as specified in the plan. Why do I think this will happen? First of all the program now has connected safety to income (not culture) and therefore the employees will seek to maximize their income.  The only way they can do that is to have conti...
More About: Consequence , Sequences , Consequences , Cons

What's More Important - Mean or Median?
2007-06-28 17:54:00
Sometimes it is nice to be reminded of stuff you've long forgotten or thought unimportant.  This happened with a client a while back. First off, for 20 years I've been working with companies to help them drive performance with their employees, channels and consumers.  I design programs that influence behavior in order to hit business objectives.  One of the standard questions asked during the discovery process is, "What is the average (insert performance metric here) of your target audience?"  The idea is that my recommendation will move the average (mean) performance of the target audience in the appropriate direction.  Sounds good.  But it is flawed. I was reminded of this when the client said after I asked the question - "I don't care about averages." Averages can be misleading.  Case in point... if you have 100 people in the room and they all make $50,000 per year - the average is $50,000.  But if one leaves...
More About: Import , Median

Now What?
2007-06-26 11:43:00
Quote found on 800-CEO-Read blog... Take my assets--but leave me my organization and in five years I'll have it all back. Alfred M. Sloan In the new economy when the assets of a company is the organization (the people) does this still apply?

Compensation Plus Incentives
2007-06-25 11:34:00
Ann Bares at Compensation Force interviewed David Cichelli - a sales compensation design guru.  While I don't disagree with anything he says I do think there are a couple of points that can be made relating to the use of non-cash rewards within the larger scope of compensation.  Read the entire post here - but below is a recap of his some of his points along with MHO following... When asked about tweaking comp plans versus letting them lie - Mr. Cichelli offers a once a year review to ensure the plan is keeping sales and the company goals in alignment.MHO:  Non-cash programs and promotions allow the company to tweak the alignment without changing an established plan.  It won't interrupt the overarching strategy behind the compensation plan but it will allow for short-term adjustments.  Simple to start and stop - think of non-cash programs as the minor adjustments we all use to keep the car straight on the road.  Compensation is a much more overt acti...
More About: Incentives

We are what we play...
2007-06-22 11:41:00
The blog New Persuasion took a look at participation levels in a variety of sports.  They summarized the shrinking/growth sports and offered some quick commentary on what was growing and what was shrinking.  The net-net is that team sports that require space and coordination of schedules are decreasing while individual sports with minimal equipment requirements and time constraints are growing in participation. Couple of thoughts on this... One... the data seems to reflect the world of work (see chart at end of post.)  I think we're seeing a reflection of how we raise children - what they participate in - and the expectations they will have when they enter the workforce. Second... the decrease in team sports has me scratching my head a bit.  I remember when I was a kid one of the big things I heard over and over is that team sports teach you how to work together for a common goal.  Is the drift away from team sports foreshadowing a future problem for b...
More About: Play

Decide Today - Perform Tomorrow
2007-06-18 10:58:00
A couple of things have crossed my path recently that could have implications in the design of performance programs.  The first I picked up from the Freakonomics blog called:  If I ask you about doing something will you do it?  Part of the post highlights the results of a study researchers at Duke, USC, and Penn conducted on the effect of questioning people on their intentions has on their actual behavior.  What they found was a statistically significant increase in the behavior if questioned on that behavior beforehand.  They used skipping class as their measure.  They asked one group if they intended to skip class and another group they didn't.  Those that were asked about skipping class skipped more classes. The other article (pdf download available) was on the Harvard Business School Working Knowledge site that discusses the fact that how soon after we make a choice we feel the effect of that choice will impact our decision.  In other ...
More About: Today , Tomorrow , Form , Cide , Perform

Personal Hygiene?
2007-06-15 10:54:00
A link in The Daily Perk blog took me to this story on employee retention efforts called "Workers Want More than a Gold Watch.  I read the article and some of the ideas included flexible spending accounts to be used for more vacation, dry-cleaning service at the office, children's birthday parties and getting the car serviced. As I read this article Herzberg's Two-Factor Theory came to mind.  I know, weird huh?  To pick up from Wikipedia... The theory was based around interviews with 203 American accountants and engineers in Pittsburgh, chosen because of their professions' growing importance in the business world. The subjects were asked to relate times when they felt exceptionally good or bad about their present job or any previous job, and to provide reasons, and a description of the sequence of events giving rise to that positive or negative feeling. Two Factor Theory distinguishes between: Motivators; (e.g. challenging work, recognition, responsibilit...
More About: Personal , Hygiene , Person , Persona , Sona

But Timmy's Mom said it was okay...
2007-06-13 14:30:00
Your kid probably has said in the past --- "But Timmy's Mom said it was okay."  Little did you know your child was using a very powerful influence principle - the fact that we look to others to see what is acceptable behavior.  I've posted on the principles of influence before and believe in applying as many as possible when developing a performance program. Remember, a program to influence behavior within an organization or with consumers and distribution channels is not always about the award.    Here's a post in another unlikely place that just reinforces the fact that good program design is more than having a great catalog or putting a lot of dollars on a debit card.  People are influence by people.  A very powerful motivator (or more accurately - influencer) of behavior is the fact that most people look to other people to assess how to respond to some stimulus.  As the post on Writing Whitepapers highlights - people will line ...
More About: Said

It's a "Sprint" not a "Marathon"
2007-06-12 17:09:00
It use to be that you'd go to college - pick a major (hopefully in your first year) - work toward that goal - graduate - get a job - have that job forever and then retire.  More like a marathon. That has all changed.  It is increasingly more likely that a new graduate will choose two or three directions in college - take any job that interests them - or one that has nothing to do with their major - switch jobs frequently - and then - who knows?  More like a series of sprints - sometimes in different directions. I was reading a post from systematicHR on how the cost of keeping yourself educated within your field is such a huge expense.  They referenced some numbers I found interesting... Life expectancy of a graduating college student: 90 years+  Expected work life starting at the age 20 = 60 years  Half-life of a career due to obsolescence = 7 years (and decreasing)  Number of educational “major model upgrades” over a career = 8 W...
More About: Sprint , Marathon , Mara

I wish I had...
2007-06-08 13:07:00
Companies must have a non-cash performance strategy in place in order to retain employees, react to market changes within their distribution channel and engage customers outside the normal "transactional relationship."  Here is a great post that should convince anyone who ever thought about having a non-cash program to call their nearest performance improvement/incentive company and start putting an initiative together.  It comes from a fairly unlikely source - a blog on "multi-channel forensics, database, catalog and online marketing" called MineThatData written by Kevin Hillstrom.  The post centers around the fact that there are times when employees demonstrate greatness in their work.  Greatness that should be rewarded, reinforced, heralded to the masses.  But the "system" won't allow it.  Specific raise guidelines, only so many manager slots available, etc., etc., etc. Having a non-cash system in place allows mana...