Encouraging employees to put in that extra 10% can make all the
difference when ensuring monthly sales targets are reached, queues are
kept to a minimum or a deadline is met. All of these can have a crucial
impact upon a company’s general prosperity, so organisations that
neglect employees’ motivation and morale do so at their peril.
Rewarding staff can be a difficult task; what motivates some will turn
off others. The trouble with cash is that it can easily become swallowed
up by the gas bill. A Christmas bonus, for example, will be seen as a
treat at first, later it will be expected, and as the years go by, it
will become relied upon.
By this time, it has failed to act as an incentive and is even liable to
create resentment if reduced or withheld completely. Vouchers are widely
regarded as being good staff motivational tools because they offer
choice, enabling a company to avoid the ghastly prospect of giving
whisky to non-drinkers or free gym membership to couch potatoes.
Whitbread Leisure Vouchers, for example, can be handed out to employees
and exchanged for beer and alcohol at Threshers, meals or a night out at
participating pubs, restaurants and hotels, or health and beauty
treatments from the David Lloyd Leisure Group.
Whitbread gives out its vouchers to all its associated partners, which
Bill Brown, general manager at Whitbread, admits could be seen as taking
coals to Newcastle, devaluing the reward. ’But because recipients are
not restricted too much - our vouchers can be used at 3000 leisure and
lifestyle pursuit outlets across the UK - hopefully, this is not the
case,’ he says.
Giving something like low-value Argos vouchers is not so successful,
according to Brown: ’After all, who wants half a toaster? Having to save
up vouchers to obtain something worthwhile will take the motivational
quality out of the reward.’
What a voucher should offer, according to Alan Uren, retail operations
director at Dixons Stores Group, is a truly aspirational product, which
will thrill its recipient: ’Frankly, an electric blanket won’t go the
distance.’ Dixons vouchers, which can be redeemed at Dixons, Currys, PC
World and The Link, combine the excitement factor with flexibility, he
A company can buy a Dixons voucher to the value of, say, a digital
camcorder from Currys, with all the latest gadgets, to present to the
most successful employee.
Buying a voucher means the company doesn’t have to provide or stock the
prize but can use it as the hook to incentivise its staff. If a recently
married salesperson wins, they may prefer to receive a fridge/freezer,
which they can claim, without the hassle of exchanging the
’However, if the fridge/freezer had been offered as the prize in the
first place, it certainly wouldn’t have appealed to the thrusting young
bucks in the sales team,’ says Uren.
Vouchers, scratch cards and prize draws can be used to denote different
levels of reward within a total strategy - a plan telemarketing giant,
Sitel Stratford, recently adopted at its three UK plants.
Its aims over the short, medium and long term were two-fold: to address
Monday attendance levels (a peak day within a call centre) and to extend
the ’life-span’ of operators.
Short-term Monday staff attrition was tackled by rewarding operators
arriving promptly at the beginning of the week with a scratch card,
giving them a one-in-ten chance of winning a prize, such as the latest
CD, video or cinema tickets. Since April when the scheme was launched,
the 20% Monday non-attendance level has halved.
For the medium term, vouchers are used to motivate staff. Each quarter
all operators, who have worked the hours to which they have committed
are put forward into a prize draw where vouchers of pounds 600, pounds
250 and pounds 150 can be won. Another draw is conducted later which
takes into account operators’ performance throughout the whole year, and
this time the prize is a VW Polo.
To keep the momentum going, Sitel Stratford also awards points to its
staff for general good practice, which can be accumulated and exchanged
for gifts at any time. Each operator is given a regular statement to see
how many points have been awarded.
’Within a call centre, it’s hard to design an incentive scheme to deal
with all the different applications,’ says Helen Hickin, teleservices
manager at Sitel Stratford. ’This one gives a commonality to suit
By putting up posters of individuals who have won, it gives operators
something for which to aim and creates a healthy level of friendly
competition, which is good for the company, the operators and our
customers. It is an excellent base, and since its introduction, staff
morale and productivity have improved tremendously.
’In fact, we’ve been so impressed with the results that we are now
considering a bolt-on application, which allows managers to write out
’cheques’ awarding 500 bonus points to especially conscientious staff
Virgin Atlantic’s incentive scheme for its cabin crew could never be
accused of being utilitarian. From April to August 1997, three routes
were selected, and the flight generating the highest passenger spend on
duty free on each during a single month was pinpointed. All crew
members’ names from each of the flights were put into a draw and the
three winners given an all-expenses paid holiday on Necker Island with
Thus, during the five-month period, 15 Virgin staff were given a week’s
break (organised over two holidays) with their boss on his own private
Reaping the rewards
Reward and recognition have a vital part to play within any internal
marketing strategy, but it is only one element. Viewing incentives as
the main thrust of internal marketing is akin to regarding point-of-sale
promotions as the focus of brand strategy.
’The common misconception is that internal marketing is about selling
messages to, or dangling a carrot in front of, employees. It is not. It
is about shaping behaviours so that they are aligned to the brand or
external marketing strategy,’ says James Brooke, a director at internal
marketing agency AVICoM, part of the Added Value Group.
In his diagnoses of the effects of incentive schemes for many companies,
including the Automobile Association, Royal Insurance, Mercury Paging
and two major divisions of both Lloyds and Midland Banks, Brooke found
that ’while certain aspects of the schemes worked well, all too often
they gave conflicting signals about the behaviour required of
Many incentive schemes focus on individual rewards when the aim is to
espouse the value of teamwork, or install a reward programme emphasising
the short-term calculative relationship when the objective is to
engender a longer-term sense of belonging. One professional from a large
retail bank told Brooke that his voucher-based scheme made him ’feel
like a used-car salesman’.
A scheme must be seen to be fair. Any hint of favouritism nearly always
leads to disaster, which the AA found out to its cost. ’The strategic
requirement was to foster teamwork,’ explains Brooke, ’but the scheme
made people feel hard done by, compared with others in different, but
mutually dependent, functions,’ says Brooke. ’So much ill-feeling was
generated by the scheme that in the end Union officials co-ordinated an
employee petition threatening industrial action.’
To redress the situation, the AA redesigned its scheme from scratch.
Its first step was to identify the three or four priority measurement
criteria which most directly affected customer service - and over which
they had the most direct influence. This formed the basis of the new
strategy and the result was an incentive scheme in which each function
was measured on a team basis according to its role in the customer value
In Summer 1992, Teamwork Pays was launched, the industrial relations
climate measurably improved and - most critically of all - performance
of those aspects of service that matter most to customers improved, such
as time taken to arrive at a breakdown and repair the vehicle.
The case of the AA illustrates that designing the right measurement
criteria is a crucial factor in the overall success of an incentive
scheme. If they reflect the customer’s priorities then the scheme will
help deliver the brand promise, if not, then it’s likely to fail.
One major high street bank got this very badly wrong when it
incentivised staff to pick up additional charges on customer accounts.
News of the scheme leaked back to the bank’s customers, resulting in a
’Motivating staff for customer service would have paid greater dividends
in the long run,’ adds Brooke.
Traditionally, the automotive industry was the main user of incentive
schemes - which makes sense as the sector is all about making
third-party salespeople perform on its behalf. In the 80s large banks
began to put their staff on voucher-based schemes, but the trend is now
to focus on more sophisticated internal marketing tools, such as culture
mapping, involvement programmes and interactive events, where instead of
passively listening to the chairman’s presentation, staff are taken
off-site for a day to participate in games and processes which work as
metaphors to convey the company’s strategy.
IPC Magazines’ two-night excursion for its advertising sales departments
is an unusual example of such an off-site, highly participative
team-building exercise. To encourage greater communication and social
integration among sales teams from Marie Claire, Options and Women’s
Journal, IPC Magazines called upon the help of marketing incentives
specialist, The Travel Organisation.
It came up with an adventure trip set in Jersey including a series of
challenging tasks, designed by ESIC, a company run by an ex-officer of
the British Army, to stretch each of the 70 participants. These
included: abseiling down an old German concrete tower facing the sea;
traversing a crossing of 160 feet over a drop of 350 feet; navigating
rubber inflatable boats with a non-English speaking skipper; speaking
impromptu on air with a Jersey radio station and coping with being
marooned overnight on an island off St Helier.
’Sales teams from each magazine have recently moved on to the same
floor,’ explains Claire Portis, advertising manager at Marie Claire.
’Historically, we all worked independently, but as we share agencies and
information, it seemed logical to work more closely together. The point
of this exercise, therefore, was to build a stronger team spirit. The
trip encouraged us to exceed limits beyond our normal boundaries and to
recognise in ourselves qualities we never knew existed. This has
engendered greater trust and openness among us. I would say it was a
IPC Magazines was so impressed with the results that another incentive
trip is planned for next year.
This type of annual incentive trip tends to produce better results than
the classic incentive company trick of selling programmes with a large
number of rewards - which generate more profit for them, as they depend
on mark-up charged to clients and a margin negotiated from
If incentive companies work on a straight fee basis, they are able to be
more objective about solutions needed.
Incentives are only truly effective when combined with involvement and
trust, which form the basis of Air Miles’ incentive scheme. Air Miles
allows all its employees - from post-boy to director - to reward
outstanding effort by issuing everyone with a cheque book of ’thank you’
vouchers, each representing ten air miles, to present to any other staff
member when they feel it is merited.
Cynics would presume this just gives specially friendly colleagues the
chance to swap valuable vouchers, but, according to Wanda Goldwag, Air
Miles’ director of sales and relationship marketing, ’this genuinely
Sign of recognition
’We realise that senior management can’t be everywhere to see good
working habits, and this system effectively gives Air Miles 600 managing
directors,’ she says. The vouchers offer an opportunity, say, for sales
executives, who spend a lot of their time on the road, to reward admin
staff for taking the trouble to pass on vital messages; or for
colleagues who offer to stay late or work through their lunch hour to
finish a project before a deadline to have their efforts recognised.
Simplicity is also key. There is still a place in today’s corporate
culture for the suggestion box, for example - something which Marks &
Spencer has found. After a break of several years, the retail giant
reintroduced this tradition - now called Ideas Count - to allow its
employees to put forward any ideas to benefit the company. Those whose
schemes are subsequently put into action are rewarded with gifts ranging
from leather goods and clocks to a day at a health farm, depending on
the nature of concept and whether it is taken up nationally.
The best internal offers
- Avoid gifts of money or anything too utilitarian.
- Offer flexibility.
- Reinforce the brand or external marketing strategy.
- Use measurement criteria which reflect customers’ priorities.
- Combine rewards with involvement and trust.