Guest Column - July/August 2013

Create Your Measurement Strategy

By Paul Gordon

Many companies invest significant dollars in employee engagement and recognition, yet fail to measure the effectiveness of these programs, leaving everyone in the dark on how recognition efforts are affecting the organization's ROI and employee behavior. Clearly, measuring employee rewards programs—which can lead to significant improvement and increased efficiencies—is a major challenge and an area of opportunity.

Two common questions when it comes to measuring program effectiveness are what do you measure and when do you measure it. Yet, before program analytics can be considered, program benchmarks must be in place prior to a program's launch to establish baseline evaluation metrics. Best practices dictate that measuring engagement is rarely effective when an organization neglects this important step. Each program's behaviors and objectives are unique, and benchmarks must be specific to the organization's goals, strategy and culture. To create an effective and measureable program, organizations need to consider productivity, performance gains, company values, program reach, redemption trends and costs. Measurement also provides a view into the status of employee morale, senior leadership buy-in and program performance, and provides a baseline against which future program goals and success can be compared.

Program metrics need to be analyzed continually, regardless of whether the program is continuity- or calendar-based. Quarterly reviews allow program managers to gain a true understanding of which program components are successful and which are lagging. By employing an online redemption platform that generates a variety of reports, leaders can quickly react to outstanding issues and implement necessary changes. Best practices for program reporting must include ongoing employee feedback, assessing participation levels, comparing seasonal trends and year-over-year or quarterly merchandise redemption data in order to identify trends and apply this expert analysis to keep your recognition program front of mind with employees.

A points report is an important starting point to get a clear understanding of who is using the program and how. With an overview of all points awarded, their denomination and recipients, you'll know which managers are rewarding which employees. It is also a way to determine if someone is not being equitable and only awarding points to the same few employees.

For organizations that run multiple sales incentive or dealer incentive programs simultaneously, a program report is necessary to keep track of each campaign's budget and ensure the programs are effective. This report should break down points awards by program and categorize top sales representatives along with top-selling products and reward redemptions. By reviewing this data, you'll see which programs are more successful and which are lacking momentum. It provides an opportunity to correct course in real-time and determine if this is the time to revisit program goals or launch new campaign communications to ensure participants are maximizing company sales goals.

A program budget report is an effective analytical tool for organizations and senior leadership to review when rewarding their team members. This budget snapshot tool aids managers in ensuring points are being distributed on an ongoing basis and highlights which mangers still have large point balances and which have exhausted their budget too early in the year. This report also shows which employees are meeting their goals and which are not.