Case in Point
MAX!-imum Recognition for MAX!-imum Effort
hile we know that a cookie-cutter approach to developing programs doesn't work—and that what works in one company may not work in another—we also know that any successful program follows well-documented criteria that give it its fundamental shape: objectives, goals, communication, management support, informal and formal recognition and rewards, along with measurement. The program also must define how you'll get there: past/current successes; past/current failures; best practices.
With that in mind, what better case study to begin this new section with than American Express Incentive Services' (AEIS) Max! Employee Reward & Recognition program. Not only did the program garner a 2007 Circle of Excellence Award from the Incentive Marketing Association, but it also was recognized outside of the incentive business community with a Bronze Quill Award from the International Association of Business Communicators (IABC).
And the program is still going strong in 2009. "We have 100 percent participation with our points recognition program, and it's wonderful watching our workforce and the energy they put into it," said Deanna Baker, vice president of employee development and human resources.
Practicing What They Preach
We've all heard the phrase, "Doctors don't make the best patients." But in this case, AEIS firmly took hold of implementing incentive best practices to develop an even healthier high-performance culture.
It's evident that the company lives its definition of recognition: "showing an employee that you value them for their contributions and as a worthwhile person." AEIS focused on the areas of profitable growth, customer value and having a high-performance culture. It took the approach that culture equals people and work environment.
To link recognition with high performance and to convey the value that AEIS places on its people, it created The Max! employee recognition program. The theme was based on the premise that the maximum performance of AEIS employees is worthy of maximum recognition.
Bringing life to the program, literally, is Max!—a graphic blue-skinned character complete with red cape and briefcase. "Max is a part of our everyday life, and helped along the way by AEIS peers, supervisors and officers who know the value of recognizing and rewarding achievement," Baker explained.
Both Max the character and Max! the program were introduced in April 2006 through multimedia kickoff meetings that included an animated video. Focus was placed on providing program training and explaining the guidelines for effective recognition. Employees were also provided with support materials to reference as the program unfolded.
Through its extensive approach to recognizing and rewarding employees and their performance, AEIS is "practicing what they preach." Recognition of the company's 186 employees is awarded through four general types of programs: all-employee programs, management-driven programs, company-driven programs and the Circle of Excellence sales incentive program.
All-employee programs provide employees at all levels the ability to give and receive recognition to or from any other employee in the company. There are two programs included under the all-employee-driven umbrella.
The CustomerFirst program allows employees to recognize each another with points for exceeding customer expectations or making it easier to do business with AEIS. Every employee is given 150 points on an annual basis to recognize fellow employees in any amount up to 150 points (most awards range from five to 20 points). The purchase value of the points is $1 for every point earned.
The second all-employee program, AEIS' Award of Excellence, is the company's most prestigious program and was designed to recognize significant or major contributions toward key business objectives or initiatives. Any employee can submit an Award of Excellence nomination. However, the final determination of four quarterly and four annual winners is carefully considered and voted on by the entire Leadership Team with final determinations made by the officer team. Quarterly recipients receive 100 points and a plaque; annual recipients receive 550 points and a trophy.
Management-driven programs were designed to help the management team recognize the performance of the people directly reporting to them. Management-driven programs awarded by officers, directors and managers are similar to employee-driven programs in that they involve discretion in determining who receives an award and its value. Three recognition programs are available to managers:
- Free Lunch and Denim Day Certificates are allocated to all members of the leadership team based on the number of direct reports. These certificates are used to recognize and reinforce the positive behavior of their employees. Free Lunch certificates are valid for a $6 free lunch at the company cafeteria, and Denim Day certificates are valid for one day of wearing denim to work. For those with direct reports in the field, a supply of $10 American Express Gift Cheques are provided instead.
- Performance-Based Recognition is given through a variety of reward cards or Gift Cheques. A "pool" of reward points is allocated to the manager based on the number of direct reports and are used primarily to recognize specific and significant accomplishments or contributions toward company goals or to recognize superior performance. Leadership has the discretion to award these points through the reward platform most meaningful to the recipient and in any denomination up to the total value of the reward pool.
- The Above and Beyond Recognition Program allows the leadership team to recognize an employee's major contributions toward reaching the company's goals and its significant impact on the company's near- or long-term success. Leaders may request from the officer team special award funds to a maximum of $5,000 value for such recognitions. All Above and Beyond recognitions must have officer team approval.
Employees receiving management-driven rewards are recognized at monthly Town Hall meetings by managers wearing special red Max! capes for the occasion. Management is strongly encouraged to use their entire allocation of awards. Each employee's reward points vary based on the value of their contributions and the discretionary point value awarded by the manager or peer. Points are loaded onto custom designed Max! prepaid American Express-branded rewards cards that can be reloaded every time an employee earns additional points.
AEIS also has four general company-driven recognition programs to support specific company or departmental objectives that are not based on achievement or performance such as employee retention, employee referrals, etc. These rewards are not based on achievement or performance:
- The Service Anniversary program recognizes and rewards commitment and loyalty to AEIS by awarding 10 points for every non-milestone year of service to AEIS and 15 points for milestone anniversaries such as 5, 10, 15 years, etc. Recipients also receive a congratulatory letter from the CEO.
- The Holiday Gift program awards each employee 100 points in celebration of the holiday season.
- The Leads to Success program rewards employees for contributing to AEIS' sales efforts by providing leads that ultimately convert to sales, with rewards based on the sale amount.
- The Employee Referral program rewards employees for referring qualified candidates for employment: 1,000 points are awarded to the AEIS employee making the referral: 250 points are issued to the referring employee on the new hire's start date and the 750 point balance after the new employee has been on the job for 90 days.
The Circle of Excellence sales incentive program focuses on driving profitable sales growth by achievement of sales goals or other contributions. This traditional program targets all sales channels within the organization and is focused on driving profitable sales growth by recognizing sales force and sales manager over-goal performance or contributions. There is no discretion in this program and it is a direct reward for achieving measurable results.
Finally, the Recognition to the Max! award acknowledges commitment by individuals to both formal and informal recognition at AEIS. This award may be presented to the individual the officers feel has best exemplified and demonstrated "Recognition to the Max!" during the course of the year. The recipient, if one is named, is honored at the Annual Business Conference and receives an officer-selected award. A special travel award is awarded to three AEIS employees (and their guests) during the Annual Sales Conference. A blue-skinned actor in a red cape and tie hired to play "Max" presents the travel awards, and employee entries are based on the number of times they are recognized throughout the year.
Communications are frequent, fun and effective. Program promotion includes posters and banners displayed throughout company headquarters and animated Max! kiosk displays placed prominently in high-traffic areas. Max!-branded launch materials include items such as Post-it notepads, Max! reward cards and employee ID badge clips. Other program communications include a small reminder card with tips for effective recognition, periodic e-mail blasts to all employees with unique Max!-themed headers and Max!-branded Valentine's Day chocolates and bottles of sparkling grape juice. The Max!-imize Friday initiative features posters and e-mail blasts with targeted Max! headers along with special treats such as giant Max! decorated cookies to remind and encourage employees to recognize each other at the end of the week.
Measures of Success
Measurements of success are taken throughout and include sales, revenues/pre-tax income, customer survey scores and employee satisfaction survey scores:
- Employee satisfaction scores on informal and formal recognition.
- Leaders' 360-degree assessment scores on recognition competency.
- Usage measured via the company's online reward management tool.
The internal activities used by the company include leadership and pre-leadership programs, a career management program and flextime policy. Activities also include an employee advocate team and a range of committees that steered investment decision, "the stage gate," client opportunity analysis and activities.
Goals Achieved, Lessons Learned
Since rolling out the employee program AEIS has faithfully done focus groups to ask employees what's working and what's not, Baker said.
"We found that the program is working great for peer-to-peer recognition since employees can give points to an individual, a team, a line manager, even someone outside of their department," Baker explained. "Of course, people want more points, but we have explained the economic situation and have discussed creative options for perhaps adding more Free Lunch or Denim Day certificates.
"From focus groups we've learned that the program can create difficulty for some employees that are in a role that doesn't have a lot of visibility, where people don't see their work," Baker added. "In cases like this, our management team has additional points they can award. Sometimes it's a matter of just reminding managers to use their points; in some cases they're waiting for the completion of a project. As we implemented programs in 2008 we asked ourselves, 'How can we get more visibility for employees who don't usually receive it?'"
As a result the company designed a business transformation team so employees from all departments would be able to participate. "We've also implemented idea-generation teams so that employees can get that visibility," Baker said. "This has been working phenomenally."
AEIS also recognized a bit of a gap between its informal and formal recognition practices. "While people were utilizing their points, they also wanted to feel a part of the decision-making process and to be recognized for that," explained Baker. That initial gap was uncovered as the result of the company's first recognition practices survey, in which the company assessed employee satisfaction.
It found that employees were highly satisfied with the formal recognition programs and dissatisfied with the informal recognition activities. Employees also rated the informal activities higher in importance than formal recognition programs as it related to making them feel valued, and in keeping them engaged and motivated.
Baker noted that "86 percent of our people wanted to feel valued so we have put in place a formal recognition program. They're very excited about it and engagement has gone up from the original results."
At the beginning of 2007, Baker said that the company needed to drive business bottom-line results "so some kind of productivity goal was incorporated into every single employee's objectives. This got everyone involved in some aspect of the decision-making process whether it was customer service or productivity improvement, everyone was tied to something."
In 2008 everyone also had a productivity goal. As a result, said Baker, by the end of the year the company realized cost savings in the millions of dollars from productivity gains.
Improve Your Program
In addition to learning about how to make the program better, Baker and Catherine McDonald, corporate marketing manager, offer the following advice for fellow program planners:
- There can never be too much communication. "We put people through a pretty robust new hire orientation and communication about the Max! program: how to use it, how to recognize peers. We recognize people each month and talk about it at Town Hall meetings," explained Baker. "Yet focus groups told us that some employees didn't know they could give points to directors or upper-level managers."
- A program doesn't have to be costly. The budget for AEIS's program is around $85,000, according to Baker. "Look at the financial end of it and see what you can afford. You can tailor a program to whatever needs your business has," urged Baker. "The beauty of a program like this is that it provides flexibility—different companies have different demographics, but you can recognize what's important to your employees and tailor the rewards to their individual desires."
- Listen to employees. Baker and McDonald strongly believe that you have to maintain a good pulse on the organization in order to design an effective program. Use employee satisfaction surveys and focus groups.
- Use an online and intranet platform. "With five generations in the workplace now, employees are increasingly tech-savvy and don't want anything on paper. Adapt to the workforce," Baker said. "At AEIS whenever an employee is rewarded points they receive an e-mail (and the manager does, too). Some binder-clip these notices to keep on their desk, while others proudly use them to wallpaper their workspace," added McDonald. "This system provides opportunities to be recognized and visible from several different angles."
- Ask, "What do we do next?" McDonald said, "One size program doesn't fit all. Regardless of an organization's size or scope—five employees or 5,000—there are always going to be opportunities for incentives. They provide flexibility and adaptability by appealing to many generations at one time."
- Look at co-branding. "We've found that co-branding provides opportunities to help employees feel more engaged with not only the company, but with the program itself," said Baker.
- Build everything you do around your culture. "Part of culture is having people feel a part of a team. It's critical to have executive team sponsorship because if they don't walk the walk and talk the talk, no one else will," emphasized Baker. "Leadership has to resonate those values and inspire them. They have to make the connection between recognition and engagement."
- Equally important is that all corporate communications must be aligned with company values and mission, and reflect what you're trying to achieve as a culture. "We are a fast-paced, goal-driven company, but we're also family-friendly and community is important to us," McDonald said. "One of the topics covered in our Town Hall meetings is recognizing an employee who volunteers in the community. The individual receives a monetary award to share with their charity or organization."
- Encourage and anticipate employees using their points to splurge in economically challenging times. "This (using incentives) may be the only opportunity that an employee has to do something for themselves," McDonald said. "It also underscores their connection with the company, the good work they've done and the recognition they've received. Help employees to envision an experience or indulgence they might not normally take advantage of."
- Remember that employees want to feel valued. "When you drill down into employee satisfaction surveys or focus groups you'll find that people want to feel valued by their supervisor and to feel that they did a good job," said Baker. "Just in terms of value, peer-to-peer recognition and cross-functional teams provide the opportunity to recognize that value more than the boss can.
All in all, both Baker and McDonald find that employees feel empowered by and engaged with peer-to-peer programs. "They have choice about who they want to recognize and, should they see that a manager may have missed something, they feel empowered to reward and recognize other employees."
Employee satisfaction surveys for the 2006 year showed an increase from a score of 3.2 prior to Max program launch to 4.25 since program inception.
All employees issued points to their peers: 65 percent of employees issued all their available points, 34 percent issued 50 percent to 70 percent of their available points.
The Circle of Excellence sales incentive program rewarded 27 sales employees at the annual dinner for exceeding their sales goals.