The Goldilocks question:
what is the right amount to spend on incentives?
Employee Performance Management System

                                Quality
                               Monitoring
...
Snowfly
Dr. Brooks Mitchell            Successful entrepreneur
  CEO & Founder                  Aspen Tree Software
  Univ...
We all can do better
Dr. Aubrey Daniels


                                                            R+
                 ...
Top Question: how much?
   Spending more than necessary
     Not knowing how much is too
     much or too little
     Givi...
Pay for what helps your bottom line

 Incentives only for what’s not happening
   Or not happening enough
 Know the facts
...
What do employees really want?
What do employees really want?

Cross pen/pencil
64 listings
Company logo
  Caterpillar, Apple,
  Domino’s, NeXT, Dodge,
 ...
What employees really want!
Long term goals & commitment
How to earn it

 Keep it positive, fair, fun and exciting
 Everyone who qualifies wins
   “I never win, so why try?”
   “T...
How to earn it

 Play quick games to determine the
 amount
 How much you win is exciting
 Broadcast the names of big winne...
Random Intermittent Reinforcement
                  (playing games)
    Earn Tokens for accomplishing goals
    Use tokens...
Because games are effective
Snowfly games
Why play games for points?
(random intermittent reinforcement)

                                Play at:
  99%+ play games...
Employees love it
      I would like to continue using Snowfly.

                  3%
                       0%
          ...
How to pay it

 Monetary power = choice!
   Branded reloadable debit cards
   Gift cards both tangible and electronic
   M...
Solution

Set up goals so that you can justify paying
more $$ in incentives IF a higher number of
employees qualify.
  Go ...
Solution

 Be realistic with your budget
   Allocate your budget based on what is most
   important to your organization
 ...
Budget Example

$25 per employee per month
Attendance, schedule adherence, sales per
hour, call quality
  Daily attendance...
Budget Example – short contest
or voluntary overtime or weekend
      Short Contest
       Top goal = 30 tokens
       Mid...
Budget Example for new-hires
 Tenure Incentives for the first 90 days
   Decrease in frequency
   Increase in $ value
 1st...
Snowfly is much easier

 You no longer need to:
   Shop for prizes
   Offer overpriced merchandise from a catalog
   Decid...
Snowfly improves KPI’s 20%
for 2 hours of labor cost per month
     Absenteeism
     Schedule adherence/availability
     ...
Justification for Snowfly

  Examine & replace present incentives/rewards
    Does it work?
    Is it cost effective?
  Ge...
Why Snowfly gets better results
(especially with Generation Y & Generation X employees)


   Rewards behaviors as they hap...
Let’s get started

• Three reasons to conduct a 90 day test:
    Improvement of KPI’s
    Eliminates a huge administrative...
Questions?
Bob Cowen
248-324-1161
rcowen@snowfly.com   Thank you
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
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How Much You Should Spend On Incentives

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How much should you spend on incentives?

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Transcript of "How Much You Should Spend On Incentives"

  1. 1. The Goldilocks question: what is the right amount to spend on incentives?
  2. 2. Employee Performance Management System Quality Monitoring Employee CRM Selection Application Application Snowfly’s Incentive Management Agent Workforce Program Scorecard Management & Analytics Dialer ACD
  3. 3. Snowfly Dr. Brooks Mitchell Successful entrepreneur CEO & Founder Aspen Tree Software University of Wyoming Nationally recognized speaker Professor of Management Aspect, Avaya, Noble, Pipkins Author Games, Work, and Human Motivation: An Applied Behavioral Approach to Employee Achievement and Recognition. Bet on Cowboys, Not Horses. Director of HR at PepsiCo Kipling’s Error III. Director of HR at Texas Instruments
  4. 4. We all can do better Dr. Aubrey Daniels R+ Incentive $ “Want-to-do” curve Performance Level 20% - 40% Discretionary Effort R- Base $ MINIMUM REQUIREMENTS “Have-to-do” curve Over Time…
  5. 5. Top Question: how much? Spending more than necessary Not knowing how much is too much or too little Giving out incentives for what is already occurring Spreading budget to thin Trying to get a lot of change for a little money will cause employees to lose focus
  6. 6. Pay for what helps your bottom line Incentives only for what’s not happening Or not happening enough Know the facts More than 3% of base pay for incentives is wasted money Usually <2%, per FTE Two hour’s wages Separate from regular payroll
  7. 7. What do employees really want?
  8. 8. What do employees really want? Cross pen/pencil 64 listings Company logo Caterpillar, Apple, Domino’s, NeXT, Dodge, Ford, Nabisco, Royal Caribbean, Xerox, Unisys, Footjoy, Lucent, Exxon, Nabisco, VW, Microsoft, Audi, NBC, Bayer, Harvard, Nextel, Pepsi, Gateway, Canon, Penske, Visa, Amtrak, Texas A&M, TWA
  9. 9. What employees really want!
  10. 10. Long term goals & commitment
  11. 11. How to earn it Keep it positive, fair, fun and exciting Everyone who qualifies wins “I never win, so why try?” “The boss plays favorites” “The game is rigged”
  12. 12. How to earn it Play quick games to determine the amount How much you win is exciting Broadcast the names of big winners
  13. 13. Random Intermittent Reinforcement (playing games) Earn Tokens for accomplishing goals Use tokens to play a game to earn points Use points to “buy” desired stuff Goal/Behavior = = Redeemable Points = Prizes
  14. 14. Because games are effective
  15. 15. Snowfly games
  16. 16. Why play games for points? (random intermittent reinforcement) Play at: 99%+ play games Kiosk, break or lunch room All based on chance Workstation (limited) Every game wins every Home (40% +) time Less than 10 5-20 seconds minutes/week Token = 10¢ 90 seconds/day at work Point = 1¢ No “Mulligans” Token Average = 10 No tokens = can’t play points Max = 5,000 points ($50) Min = 2 points ($.02)
  17. 17. Employees love it I would like to continue using Snowfly. 3% 0% 7% 12% Strongly Agree Agree Neutral Disagree Strongly Disagree 78%
  18. 18. How to pay it Monetary power = choice! Branded reloadable debit cards Gift cards both tangible and electronic Management isn’t clairvoyant Resolves an impossible task No minimum charge to convert points to $ Encourages frequent refills thus reinforces the activities
  19. 19. Solution Set up goals so that you can justify paying more $$ in incentives IF a higher number of employees qualify. Go over budget……GREAT! That means employee performance exceeded expectations.
  20. 20. Solution Be realistic with your budget Allocate your budget based on what is most important to your organization Significant improvement in one area is usually better than very little improvement in several areas
  21. 21. Budget Example $25 per employee per month Attendance, schedule adherence, sales per hour, call quality Daily attendance = 2 tokens Weekly attendance = 10 tokens Weekly schedule adherence = 15 tokens Daily sales goal = 5 tokens Meeting quality score is required to qualify
  22. 22. Budget Example – short contest or voluntary overtime or weekend Short Contest Top goal = 30 tokens Mid-goal = 15 tokens Lower goal = 5 tokens Voluntary overtime or weekend 1 hour = 5 tokens 2 hours = 15 tokens 3 hours = 30 tokens Paid immediately
  23. 23. Budget Example for new-hires Tenure Incentives for the first 90 days Decrease in frequency Increase in $ value 1st day = 100 tokens Training completion = 200 tokens End of 1st month = 250 tokens End of 2nd month = 500 tokens End of 3rd month = 1000 tokens
  24. 24. Snowfly is much easier You no longer need to: Shop for prizes Offer overpriced merchandise from a catalog Decide upon theme or games Create spreadsheets and data-bases Frequent & manually update results Build lots of reports
  25. 25. Snowfly improves KPI’s 20% for 2 hours of labor cost per month Absenteeism Schedule adherence/availability Up-selling/conversion rate Fewer/shorter meetings Quality scores Dollars collected Attrition/turn over
  26. 26. Justification for Snowfly Examine & replace present incentives/rewards Does it work? Is it cost effective? Get participation from vendors, clients, suppliers & local merchants Conduct side-by-side 90 day test
  27. 27. Why Snowfly gets better results (especially with Generation Y & Generation X employees) Rewards behaviors as they happen Provides fun and excitement Immediate and separate from regular payroll Gives choice of rewards
  28. 28. Let’s get started • Three reasons to conduct a 90 day test: Improvement of KPI’s Eliminates a huge administrative workload Snowfly fee is less than doing it on your own
  29. 29. Questions? Bob Cowen 248-324-1161 rcowen@snowfly.com Thank you

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