Editor's Desk - November/December 2010

Let's Talk Turkey

It seems that no matter where you go these days, you cannot escape the siren song of the CFO's suite. "ROI, ROI ROI," it calls.

It doesn't matter what part of the company you're working in—HR, training and development, sales, etc.—with the Great Recession still a fresh wound, companies are demanding a quick return on any investment—assuming those investments are even allowed. The reasoning goes, if we're going to spend on X, Y or Z, then it had better pay off.

I've had conversations with experts across the board, and 99 percent of them say the same thing about incentives and rewards: "If we can't learn to speak the language of finance, we will not survive."

And there's no doubt that this is true, and that the survival of most programs out there is reliant on your ability to "prove" ROI. To determine proper measures up front and execute a well-planned program that meets your stated goals.

But wait a second. Shouldn't these conversations be a two-way street?

I'm never going to suggest that you should throw in the towel and stop striving for ROI on your incentive and reward programs, but I would submit that you also have something to offer to the discussion with the folks who are demanding it. Because the benefits of these kinds of programs have the potential to go well beyond ROI.

There's probably a reason, you know, for the correlation between a company's appearance on the "Best Companies to Work For" list and its financial performance. Companies that appear on Fortune's list of the top places to work consistently outperform the trends on the stock market, according to the various studies.

One could argue a chicken-vs.-egg theory here. In other words, you might point out that companies that perform well financially have more money to spend on salaries, benefits and special employee programs, which is what leads to their appearance among the best of the best employers.

On the other hand, you could say that companies that offer powerful rewards to their employees—whatever those rewards are—are more able to attract top talent and that their very culture drives the kind of performance that leads to higher returns. As part of their modus operandi, these companies focus on employee engagement, and because their employees are highly engaged, their customers are more engaged.

Of course, many of the factors that go into employee engagement are highly dependent on a company's culture. And, you can't change the company culture all by yourself.

But you can come back to the table again and again to make the argument that ROI, while an important indicator of a program's success, is just one payoff you get when you aim to boost engagement by recognizing and rewarding employees. Whether you offer an incentive to encourage employees to adopt a new way of doing things, or you provide a little recognition to celebrate an employee who went above and beyond the call of duty, you're letting them know that you notice when they get it right. And you will reward them for doing so.

So tell me, how many one-way conversations have you had lately? And, do you feel confident enough to point out the myriad benefits—beyond ROI—that come from recognition, incentives and rewards? If you're not feeling confident that you understand all the ways these programs can benefit your company, please go visit the Web site of the Incentive Research Foundation (IRF) at www.theirf.org. There, you will find a wide array of studies that help demonstrate the many different kinds of positive effects that incentive, reward and recognition programs can deliver.


Emily Tipping,
Editorial Director


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