Feature Article - January/February 2012

Problem-Solving

What to Do When Your Incentive Program Isn't Working

By Rick Dandes


Developing reward and recognition programs to engage a diverse and talented global workforce—even during challenging economic times—can deliver excellent, measurable results and return on investment.

But sometimes other factors come into play. Problems arise, and even the best-designed program may not deliver the desired results. This could be due to several outside factors, such as changes in the competitive landscape, unforeseen price changes for key product components, or mergers and acquisitions; or internal changes that can impact a corporate culture, such as key management changes and budget cuts.

Identifying the various problems incentive and reward programs can have is the key to solving and fixing those problems and getting the program back on track, said several human relations experts.

"Incentive programs will fail, frequently because there is not a clear understanding at the beginning about the structure and the goals," suggested Pete Mitchell, director, B-to-B Sales, Samsonite LLC.

"Incentive programs are all about generating buy-ins," Mitchell continued. "Not only for the senior managers, who put it all together, but also by the people who are trying to be incentivized. If that individual doesn't buy into the program, doesn't perceive that their efforts are being recognized, or if they don't have a sense of where they are in attaining their goal, sooner or later they are going to tune out. If you don't find a way to keep the participants engaged, that can kill a program, because it is all about generating excitement and generating performance. Both of those elements are important; you can't have one without the other in a successful program."

A couple of key things come to mind when you're talking about problems, added Kate Henehan, relationship manager, Hinda Incentives, based in Chicago. "One of the most important is lack of management support."

Often programs are launched with a lot of promotion and enthusiasm, and then lose steam due to lack of ongoing support from management. If an incentive program is truly designed and aligned with company goals and objectives in mind, it is crucial for management to visibly and consistently talk about it.

"Executives need to be promoting and reminding their participant base about the importance of the program, how it aligns to the company goals, and ultimately to individual rewards and recognition," Henehan said. "When executed correctly, incentive programs and rewards have repeatedly proven that they work, whether the goal is reducing company costs, improving employee performance, driving sales or driving engagement."