Unleash the Power of Incentives

When applied correctly, incentives can serve as powerful tools of motivation to create desired actions in the workplace. Incentives can enhance job satisfaction and serve as motivators for employees to make positive contributions to their organization. A survey by the Incentive Research Foundation found that companies that use incentives to recognize and reward employees for their contributions and achievements report higher levels of employee engagement (89%), retention (87%), and loyalty (85%) compared to those that do not use incentives. 

During the latest episode of the Innovating the Customer Experience podcast, our J.D. Power experts Michael Vermillion, Senior Managing Director, Global Business Intelligence, and Mark Miller, Customer Service Advisory Practice Leader, are joined by Uri Gneezy, Epstein Atkinson chair and management leadership and professor of economics and strategy at the University of California San Diego, to explore the impact incentives can have on the workforce.  

When Incentives Go Wrong

As powerful as incentives can be, they can also decrease motivation and effort when implemented incorrectly. If employees are asked to come up with creative solutions but are punished when these ideas fail or do not meet expectations, they are less likely to take risks in the future.  

Practical Tip: Punishing failure instead of learning from it hinders creativity. When failure occurs, debrief with your team and examine what happened. Analyze where the opportunities are to improve in the future.  

Incentives can also fail to make a difference when rewards are given out based on individual performance. Employees are discouraged from creating a collaborative work environment when personal achievement is at stake. 

Incentives in the Call Center

Introducing incentives in a call center environment can be tricky. One example is the metric of average handle time.  Incentivizing a metric that focuses on calls taken per hour and the length of the average call fails to consider where the interactions are effective. A quick but incorrect solution from a call center rep can lead to more frustration for the customer when they call back for additional help. So how do you find the right balance?  

A comprehensive evaluation system is one of the best ways to assess performance and create customer-centric call center environments. A multi-dimensional approach would include quantitative and qualitative factors including: 

• Customer ratings  
• Manager evaluations 
• Call audits  

Steps to Creating Effective Incentives

Many organizations implement incentives before taking the time to understand what their employees need to thrive. To create an impactful incentive program that drives meaningful change within your organization, take a strategic approach. Look at successful incentive programs at top performing organizations. 

We also recommend the following tips that can help you build effective incentives for your teams: 

• Implement a “common sense officer” role to guide incentive building and give feedback on incentives that are not aligned with organizational goals or the needs of the customer. A best practice in top-performing organizations typically sees frontline supervisors serving as the common sense officers. Their feedback and perspective are especially insightful for incentive building, as they are the closest to frontline employees and can share their motivations.  

• Conduct focus groups to understand which incentives are most valuable across an organization. Importantly, keep cultural differences in mind so diverse perspectives are not overlooked during these conversations.  

• Use A/B testing to evaluate the effectiveness of the different incentive strategies and continue to refine and adjust these incentives based on data and feedback. 

• Most importantly, use common sense in your incentive strategy. If you notice negative reactions from customers and stakeholders, remember to be flexible and adapt. 

Final Thoughts

Keep in mind that implementing incentives sends a signal to your team. Which incentives you decide to provide demonstrates what is valued within the organization. Before taking any action, start by asking your organization the following questions: 

• Are the incentives we want to implement the right ones for our goals and objectives? 
• What steps can we take to ensure these incentives are aligned with the message we want to convey? 

Listen in to the episode below to learn more about effective incentive building and the impact it can have on your team. If your organization needs assistance boosting employee engagement or building a customer-centric strategy, feel free to reach out to our team for dedicated support.