Feature Article - July/August 2019

The International Perspective

Ideas on Managing Global Incentives & Rewards

By Deborah L. Vence

Rewards and incentives often are used to help encourage creativity and resourcefulness among employees, and as a way to show appreciation to customers for their business. And whether U.S.-based or global, organizations can use different methods to design, execute and manage their incentive programs. Experts say that in managing global incentives and rewards across a multicultural audience, being familiar with your audience and having common global programs in place are just a couple of best practices to keep in mind.

Best Practices

As far as some of the best practices in managing incentives and rewards across a multicultural audience, Mike Donnelly, CPIM, president, Hinda Incentives, has a saying: "Know your audience."

"It's something my team hears me reiterate each time we're developing a program for a client or even when we're preparing an industry education session," he said. "If you are even contemplating operating a global incentive or reward program, you need to have someone whispering 'know your audience' in your ear over and over again, every single step of the way."

He also explained that "Anytime you're trying to change people's behavior, you have to engage them, and that's about meeting their needs. Understanding a global, multicultural audience is complex."

Donnelly offered three suggestions for managing a global incentive or reward program.

First, work closely with local management. "As you create your program, work closely with any in-country management you have," Donnelly suggested. "They will understand their participants. They will be able to tell you more about the culture and should be able to offer you input on how to best communicate with their team. Communications will be one of the biggest challenges for you and, although English tends to be the global business language, speaking to your participants in their native language shows a respect for their culture. It also forces you to be very careful about exactly what you're saying and how it translates."

Second, remember that pay is important. "Using rewards to influence performance means understanding how much your participants earn," Donnelly said. "Companies pay attention to local markets and PPP, or purchasing power parity, in determining pay for global employees. One of [the] most common mistakes companies make is trying to reward people around the globe with the same award value. And that value is most often what their U.S.-based employees would think is a fair and equitable award for what they're being asked to do. But, an employee in Chile may earn about half of what a person in the United States does in terms of PPP. Consider an employee in India with about 10 percent of the earnings of a U.S. employee. While an award [of] $500 in [the] United States might be less than 1 percent of an American worker's annual income, it could be 10 percent of an Indian employee's annual wages. What message are you sending when you award someone over a month's salary for an incentive award?"

Third, source your rewards as close to "home" as possible. "Use in-country or, at the very least, in-region awards," Donnelly said. "That will get you the brands your audience is familiar with and values. It also makes sure you're taking into account country-specific things like electricity and plugs. Plus, it helps ensure you get the awards to them with the least number of problems."

Gary Beckstrand, vice president of O.C. Tanner Institute, said that among the best practices, "Participation or global representation in the planning process is critical.

"Too often," he added, "programs are developed at headquarters, and global nuances or participation is an afterthought. Feedback loops and ongoing communication are vital post-launch to ensure ongoing adjustments can be made to ensure localized acceptance and outcomes.

"When it comes to rewards and incentives, there are more things in common than not across the globe," he said. "Consequently, it's better to have one common global program than multiple country- or region-specific programs. However, allowing local flexibility to address cultural nuances is vital."

Paul Gordon, senior vice president of sales, Rymax, said that "Brands that have high consumer awareness and are trusted have no barriers across multicultural audiences. The availability of information and trends is global due to social media and the internet, so established brands that have consumer confidence and desirability are very well redeemed. Now, to further engage the audience, it is important to know regional aspects that make the rewards more attractive and feature those at all levels of redemption."

What Can You Achieve?

In terms of what you can achieve with a global rewards program, Donnelly said that it is dependent on the goals of your company and program, as well as that crucial knowledge of the audience that he emphasized.

"Let's say, for example, you go to market through independent channel partners globally who may carry competitive products. Your goal may be to gain the discretionary time and attention of your partners, their sales managers and their sales reps. In this case, an incentive program with some nominal rewards for passing your product training could get you some attention and keep you top-of-mind. Add in larger rewards for product sales and market penetration and you could see some significant sales increases in your target country," Donnelly said.

"On the other hand," he said, "let's say you're operating plants around the world, and you want to limit your risks. Engaging your people with a program to help teach them safe work habits could not only avoid personal injuries impacting your productivity and your bottom line, but could also help you avoid industrial accidents that could damage an entire community and cost an organization millions to clean up and literally destroy their brand name.

"A well-designed program can help create the culture you want among your employees, build stronger partnerships with your supply chain, demonstrate your values and help you reach any goal that people's performance will influence. It can also help spark others around the globe to try new ways to success," he added. "Global leaderboards can offer top-performer success stories and encourage others to test the approach with their customers, not only building a global camaraderie, but actually cross-pollinating those successes around the world."

Beckstrand noted that "Well-designed global incentives and rewards practices can help create workplace cultures where people choose to join, engage with and stay at organizations."

What's more, "Effective strategies can also connect people around the globe to a common purpose while honoring and preserving cultural differences," he said. "What is reinforced or encouraged should be consistent for all. The flexibility to address cultural nuances is addressed in how the solutions are executed."

Meanwhile, "Goals in domestic and international programs are all steeped in the objective to reward and recognize performance," Gordon said. "For the consumer, all programs should be created to initiate trial, increase frequency, create a sense of belonging and reward loyalty. For employees, all programs need to recognize accomplishments, build community, inspire greater connectivity to the organization and have spot recognition.

These core desires are global, and the incentive methodology is constant."

What Do You Need To Do?

To have an effective global incentive program, Donnelly said, you need a plan—"one that starts with a realistic and attainable goal." He added, "You must target the people who can most directly impact that goal and understand them. Learn why they are doing what they are doing and think carefully about how you're going to encourage them to make a change.

"Then," he said, "you need a communications plan to tell them what you want them to do and why it is important. Training provides the skills they need to accomplish the goals. You'll want a tracking system to provide them regular progress reporting. And finally, awards that fit their local culture and offer a fair reward value for their performance.

"Building an effective global incentive program isn't radically different from creating a program for U.S.-based participants. Just remember, 'Know your audience.' And don't be afraid to reach out for help to your own company's in-country managers. Look for partners within the global experience who can help you develop programs, communicate and track them and provide in-country or in-region awards to your people."

Asked what to do to ensure your global incentives and rewards are successful, Beckstrand noted "consistency in strategy and common objectives and execution flexibility to address cultural nuances. This is best achieved with one common strategy that reinforces common purpose, values and business objectives.

"Providing local flexibility to execute and address cultural difference is also important," he added. "Buy-in and desired outcomes are best achieved by including representation from around the globe in planning and developing program goals and execution guidelines."

Gordon added that "Listening and learning from your audience and adjusting to the wants and needs of the various groups" also is important in having an effective global incentive program.