How To Run A Successful Service Reward Incentive Program

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Service with a smile.

It didn't take long for the consultant to recognize that his client's new slogan would have little impact on the employees' level of customer service. Why? Because management failed to practice what it preached.

Employees were rarely treated with any appreciation, and management only seemed to notice when call center employees made a mistake or received a complaint, never when they showed initiative. It's no wonder workers were just going through the motions and looking for the first opportunity to leave the company. How could management expect its employees to be committed to their jobs, when the company had no commitment to its workers?

You probably have a number of people on staff right now who have served the company well in good times and in bad. That's just the kind of commitment a company needs to thrive in today's hectic business climate.

Service reward programs recognize this loyalty and reward employees publicly. These programs are designed to affect the overall attitude and behavior of a company's employees. The ultimate goal is to enhance commitment to excellence in every aspect of the job.

If you want your veteran workers, as well as new employees, to remain committed to the organization, it's wise to show them how much their service means to you. Simply saying, "Thank you for your hard work. You make a difference to this company;' can go a long way.

Employees are the driving force behind any successful organization and are a company's most important asset. In many respects, a service reward program reflects the company's values and mission. It is a great opportunity to express the character of the organization. For instance, if you want to be known for your excellent customer service record, you should reward employees who show remarkable initiative with customers.

A successful service reward program enjoys great respect among employees. It symbolizes something beyond the immediate award. Workers who earn such a distinction are seen as people to be emulated and admired.

This how-to booklet will answer your questions about service reward programs. You will discover why these incentives have worked for years and get tips on how to get started on your own corporate incentive. Also, you will gain valuable insight on how to improve existing employee incentive programs.

Benefits of a Service Award

Management should reward its employees in a multitude of ways on a regular basis. Without consistency, a service award program will wield little influence with workers. In effect, such an incentive program must become part of the corporate culture.

When a company recognizes and rewards employees for their dedication and performance, it generates goodwill toward the company and management. This emotional connection to the organization enhances employees' work performance.

Even if people respond in small ways, it all adds up.

In fact, an employee's positive attitude can affect a company's bottom line. According to a recent Gallup Poll, organizations with employees who are pleased with their work life reported customer satisfaction scores 38% higher than those with less satisfied workers. These companies also enjoyed 22% higher productivity ratings and 27% higher profits.

It makes sense that satisfied workers improve a company's performance, but can dissatisfied employees have the opposite effect? Absolutely. Workers who feel unappreciated and ignored by management lose their sense of pride in their work. Gallup estimates these disengaged workers cost employers $292 billion to $355 billion a year. Plus these workers are absent more often and are far less loyal to employers.

Keeping your loyal, talented employees around also insures a high level of customer service, according to a poll by Unifi Network and Roper Starch Worldwide. Of the more than 3,000 consumers surveyed, one in three cited employee turnover as a significant factor in quality of service. Considering more than 60% of respondents were consistently less than satisfied with customer service, keeping your best people is of paramount importance.

Choose the Right Program Incentive

The most common type of service award is the traditional length of service program. These awards recognize people for their commitment to the company and can help establish an almost forgotten feeling in today's workplace . . . a sense of belonging. It's no longer realistic to wait until an employee's 25th anniversary to honor his dedication and high performance. Workers who stay with you through the ups and downs deserve to be recognized and thanked for their loyalty and excellent work more often than every couple of decades.

The attendance incentive award program is another well-known service incentive. Calling in on short notice to take the day off-whether legitimate or not-creates gaps in staffing, which can lead to costly mistakes and reductions in productivity and quality. It also builds resentment among employees who show up for work every day and have to cover for the person who is often absent.

In recent years, the peer-to-peer service award program has gained popularity. These incentive solutions allow managers and co-workers to identify and reward colleagues who have made the extra effort. Sometimes personalized awards are given on the spot, so there's no delay in recognition-one of the most important aspects of a service award program. Other peer-to-peer incentive plans are set up on a monthly or quarterly schedule, but rarely longer.

A good number of organizations have found success with a citizenship quality award. These incentive programs recognize employees who exemplify certain values that are important to the organization. Quite often they are special customer service incentive program awards.

For instance, a large collection agency used such a service award to help motivate and reward its account executives. These employees spent all day interacting with people who were on the verge of bankruptcy and were being hounded by creditors. Frequently the customers were angry, upset and abusive, but not always.

In fact, the company regularly received letters from thankful customers who commended their account executives for treating them with a respect and dignity they hadn't experienced in years. From these letters, management would choose one employee to honor publicly. Recipients would select an award from a merchandise catalog.

Done on a quarterly basis, these customer service awards were highly regarded by employees. They felt as if they were really helping people.

The best way to figure out which kind of service award program makes sense for your group is to know your participants. Ask questions such as:

What are the demographics, including age, gender and single/married?

What is the average tenure with the company?

Does average length of service vary by department?

Once you know a few specifics about your target audience, you'll be able to determine whether they would respond best to a peer-to-peer incentive program or an annual incentive award determined by management.

It's common to have a mixture of these programs when designing a service award incentive. You may even want to tie a number of incentive programs under one umbrella.

For example, a large manufacturing plant enjoyed success with this mixed approach. Management started off targeting perfect attendance and on-time records. Then the program expanded to include a peer-to-peer component. As the result of an employee suggestion, management added one of our a merchandise catalog for greater achievements as an option to the regular gift certificates. Eventually, management developed a program that reviewed peer-to-peer honors awarded during a three-month period and selected one for a more significant award.
One of the most interesting characteristics of this program is how willing management was to let employees influence it. The workers developed a true sense of ownership and connection to their Employee Reward and Recognition Program.

When you're deciding which kind of service award program to use, keep in mind specific business objectives that tie in with the award recognition program. This connection with corporate goals helps justify and protect the award program's budget. Also, poorly conceived objectives can sink a program, no matter how well intentioned. Brainstorm with colleagues for a cohesive set of goals.

Last but not least, determine your budget, which encompasses all administrative costs, as well as the awards. The largest portion of your budget, about 70-75%, should go toward the awards themselves, as well as the celebratory banquet or special event.

Next is promotion, claiming about 15-20% of your budget. If employees don't know about a program, they can't participate. Also, if they think it's not a big deal, they won't attribute much significance to it. Any money left over goes toward administration.

When planning your budget, give careful thought to the demographics of your target audience. For example, if your service program is targeting a group that makes six figure salaries, the award must have substantial symbolic value or be a fairly nice award in order to get their attention.

Promote the Recognition and Incentive Program

The manufacturers or distributors you select for your service awards can usually provide catalog sheets of the merchandise you select at a nominal cost. Or they can supply the artwork for your own communications materials. Whether you choose to use a variety of catalog sheets or other collateral for your own service award booklet, each employee should have a copy.

Consider placing award catalogs in break rooms and other areas where employees congregate. A food manufacturer had little to no budget for promotion so it tried this approach to get people's attention. Sure enough, employees would leaf through the catalog and set their sights on certain merchandise awards. Also consider creating your own in-house communications strategy. At the very least, this packet should include these basic components:

An announcement piece that clearly explains management's philosophy regarding employee recognition incentive programs and service awards. It should also include the program's objectives, length, measurement system and the merchandise awards.

Distribute information via email or in-house mail updating participants' progress, particularly if you're using an attendance program or an incentive with a group of nominees.

At the end of the program, send a congratulatory mailer celebrating the milestone. This should be an impressive notice that can be kept as a memento. Follow up the official notification with an email containing specifics regarding the ceremony and award.

Presentation Is Everything

Service award winners deserve their moment in the spotlight. Show them immediately and in style that the company appreciates their hard work and dedication. Here are some ideas:

Create excitement in the office with an announcement as soon as the award recipients have been determined. If possible, send out a companywide email, including all satellite offices and subsidiaries. Write a short article on each winner and what he or she did to earn the award. Include it in the organization's newsletter and web site.

Clarify exactly what the recipient did to earn the award. Furthermore, during the ceremony explain the importance of the recognition award in terms of its value to the company. Include information on how the winner's behavior supports the program's objectives as well as the well-being of the company overall.

Notify industry publications. For instance, if the award is an annual honor given to an employee who exemplifies behavior important to the company's image, such as excellent customer service, distributing this information helps the entire organization.

Schedule an Awards Ceremony

Even if your budget will barely cover soft drinks and cookies for a small group, you must present the recognition award to the recipient in front of his or her peers. Ideally someone in upper management should be involved, to reinforce the importance of the award.

If your budget is larger, go all out with an impressive awards ceremony. In addition to company employees, include recipients' families and important members of the community. In this situation, the company president should present the awards.
If your budget is more along the lines of a nice luncheon, it may be tough to attract a member of upper management due to tight schedules. One approach is to plan the award ceremony for the beginning of the event so the VIP can distribute the awards and then be free to leave if he doesn't have time for the full meal.

To save money, some organizations include service award presentations as part of the company day celebration. This arrangement certainly increases the visibility of these distinctions. However, there is always the risk they will be glossed over as just another speech. Set the award presentation apart in some way. Perhaps use a visual element, such as a video, or inject some humor in the proceedings with a brief play about the significance of these awards.

Wrap the awards. If the items are to be personally presented, this is a must do. Also, be sure to include a handwritten note. If the service awards are to be mailed to the recipient, consider arranging for them to be gift wrapped. It is a minor touch, but unwrapping an award is far more enjoyable for people than just cutting open a shipped box.

Evaluate the Results

It's important to analyze the success of the program both from the participants' and administrators' perspectives. Ask the administrators if they encountered any problems and what they thought worked particularly well. Explore all the intangible aspects of the program-all the little things that can really make the difference. In particular, get their input regarding the objectives of the program and any ideas for future service awards or changes to existing incentives. If possible, speak directly with recipients to learn how they felt about the program. If you think they would be more honest responding through an anonymous survey, make one available.

After getting everyone's input, review, on your own, the program's components:

budget,

objectives,

measurement system,

promotion,

awards,

administration

It isn't uncommon to change elements of a recognition program from year to year in order to stay in touch with your workforce. Fine-tuning from time to time will help make the service award program an important part of your overall incentive system.

Does Your Company Need a Service Check-up?

You may have a gut feeling that your organization should establish a service award program, but you need more than that to convince management. Begin a careful assessment by asking yourself the following questions:

Does the company have a systematic way of letting people know their contributions are valued?

Does your organization publicly recognize people for their dedication and high performance?

Has your company established one or two fundamental values (such as dedication to customer needs) to focus on and continually reinforce goals to achieve these behaviors?

Do you offer recognition awards that honor employees who exhibit these corporate values?

Does management give the impression that its people are the most important company asset?

Is management as committed to its workers and their well-being as it wants employees to be toward the company and its goals?

Is top management visibly involved in the recognition of employee achievement at all levels?

Are your reward and recognition programs truly available to all employees?

If you answered "No" to any of these questions, your organization could have some underlying loyalty and motivation problems.

Q. Management has tried various service award programs in the past, but eventually discarded them because they didn't seem to work. Now nobody wants to listen to me. How do I change their minds?

A. First, learn more about the previous programs. Specifically analyze their design, objectives, awards and presentation. It's possible they were poorly conceived or the administrators didn't carefully analyze the incentive program's overall benefits. With this information, you'll be able to explain how your service award incentive will differ from past efforts.

Also, talk about money. Focus on the positive impact service programs can have on a company's bottom line. Cite statistics that support the fact that satisfied employees are more productive and loyal, which leads to higher profits and lower retention costs.

Q. Is it possible to offer service awards on a project basis rather than within a specific time frame?

A. Service awards can be offered whenever you want. A New York-based investment banking firm enjoyed great success with service awards distributed immediately at the end of a project rather than giving them out on a quarterly or yearly basis.

The service awards targeted the support staff. Managers and analysts nominated administrative assistants and other lower-level personnel who really shined during a project. Recipients earned merchandise awards. This service program helped reinforce the fact that while the administrative staff may have been invisible to the clients, their co-workers knew the project could not have been completed without their valued participation.

The service program became a point of pride among the support staff and a valuable motivation tool. Those who earned the distinction were usually included on larger, more high profile projects, which made their work more interesting. Also, it put them on the fast track for raises and promotions.

One unexpected development . . . analysts and upper management began competing for the most dedicated, talented and hard-working staffers from the administrative pool.

Q. What kind of service program works best in a low skill, high turnover industry with lots of part-time employees?

A. An incentive that offers immediate recognition for a job well done suits your demographic. In particular, a peer-to-peer program would probably be most effective.

A chain of movie theaters used this program design to improve its overall customer service ratings. Employees used red cards that resembled movie tickets to thank co-workers for showing initiative and thoughtfulness. Recipients collected a certain number of cards and then exchanged them for gift certificates to local retailers.

Workers earned awards for everything from pitching in during a rush on the concession stand to helping calm an irate customer. This peer-to-peer program helped create a bond among the theater staff. Also, employees became more apt to fix problems with the help of a co-worker, if needed, rather than wait for a manager to point it out to them.