Feature Article - November/December 2017

The Challenge of Going Global

Incentives & Rewards Around the World

By Rick Dandes

In this highly competitive and expanding global economy, how an organization approaches talent management capabilities, and plans for growth by attracting, motivating and retaining a skilled international workforce, is critical to success.

To that end, organizational growth—and the development of incentive, recognition, human resource, sales and marketing professionals—should include an international component. "We all need to lead the way in championing workforce cultural sensitivity and guiding organizations through complex global reward programs," said Michelle Smith, vice president, marketing, O.C. Tanner.

International programs are exceptionally challenging, complex and fraught with subtleties that can dramatically derail your best laid plans if you're not extremely careful, Smith explained. "No leader wants to take a chance on any recognition or incentive program, but once you cross a country border, the odds of something going wrong increases significantly."

Whether locally or globally, Smith said, incorporating recognition and incentive programs into your corporate strategy has rapidly evolved from a discretionary corporate initiative to a 'must have' business imperative.

Across the globe, corporations are wrestling to improve productivity in their organizations, reduce expenses, increase retention of employees and customers and stem the tide of an increasingly disengaged and restless workforce.

Global corporations now lose up to 30 percent of their customers each year, half of their customers in five years, half of their employees in four years, and half of their investors in less than a year, Smith said. "In some countries and industries, the metrics are much more alarming. Fortunately, incentive and recognition programs have proven to be one of the most effective vehicles for combating challenges like these. Engaging your global workforce through incentive and recognition programs can vastly improve productivity, employee morale, customer loyalty and corporate profitability."

Organizations need to realize that it's easy to recognize employees locally, but it's even more important to recognize global employees, as one incentive strategy simply does not fit all cultures, noted Fintan Connolly, global eCommerce manager, Globoforce.

Take, for example, Thanksgiving, Connolly said. "Employees in the United States might truly value a frozen turkey as a reward from the companies they work for. This same incentive would likely not apply in a region like Canada, which celebrates the holiday at a different time of year. You also need to make sure employees in China and Brazil have specialized incentive options they can redeem locally, which are truly meaningful for them based on their respective cultures."

Consider giving diverse audiences the power of choice—a key tenet of recognition—which contributes to more human cultures in the workplace. This option, Connolly explained, caters to the demographics of a global workforce spanning multiple generations, all with different expectations and driving forces. More important, the power of choice eliminates the costs of failed recognition efforts that do not consider local cultural sensitivities or needs.

Challenges and Solutions

There are many challenges behind the scenes in managing global incentive and reward programs, said Jonathan Grey, CEO of Ovation Incentives.

But before you get to the nuts and bolts of running a campaign, the most important thing is to have a solid agreed specification with the client before you ever kick off. "In my opinion," Grey said, "spending high-quality time with your client in the project 'discovery phase, as we call it, lays the foundation for success later on."

Two of the main challenges in developing and managing global incentive and motivation programs, are dealing with the cultural expectations of the participants and the management expectations of the client.

It really is important, Grey explained, to understand how different cultures engage with the whole process of incentives and motivation. "The human recognition that is inherent in the incentive and reward process often needs to be adapted for different countries based on their cultural values."

For example, in India recognition in physical form, visible by many—such as being called out at a team meeting or having your award poster visible in a communal area—is a massive motivator for employees, Grey said. The very opposite is true in places such as Switzerland and South Korea, where a higher value is placed on individual line management recognition or team recognition.

There are many challenges behind the scenes in managing global incentive and reward programs.

"These factors have to be carefully understood prior to launching a program—conducting small focus groups or qualitative surveys prior to launch can be very helpful in getting this right," Grey said. "Secondly, there is the management expectations of the client. In general, clients underestimate the level of internal support that they will need to put in place to properly manage and grow a large incentive or motivation program over the long term. When dealing with diverse groups over wide geographies significant resources, controls and communication support will need to be put in place to maximize the effectiveness of the program and deliver the desired return."

The biggest challenge, summarized Jordi Prats, vice president, Global Rewards, Maritz Motivation Solutions, is getting enough of an understanding of your participant audience to make meaningful program design decisions.

"What is their demographic profile?" he said. "What challenges do they face in their role which may affect the program? What cultural barriers might need to be overcome? Do the program sponsor and participants speak the same language—literally and figuratively? There's no substitute for doing your homework."

From a reward perspective, Prats believes a company can get mileage by ensuring programs speak to their participants' reality. "A client recently wanted to run a summer promotion, but modified the title to better accommodate participants in South America and Australia, then in the middle of winter. Another found that a spiff using an Advent Calendar was only meaningful in selected markets." (A spiff is a term for the sum paid by a vendor's salesperson to a retailer's salesperson to motivate him or her to push the vendor's goods.)

Another thing to consider, from a logistics standpoint, is having multiple product inventories based on plug sets or on brands that resonate in certain countries.

"That's always a concern," said Paul Gordon, senior vice president of Sales for Rymax. "Partnering with in-country suppliers that understand the nuances of the market is critical. In addition, certain countries set up barriers of entry such as approved countries of origin in manufacturing or high tariffs and duties that make some products less desirable. These are some of the ins and outs that affect the programs."