10 Steps To Design An Effective Incentive Program

  1. Establish Objectives: Identify three to five goals or objectives that are a) measurable, b) attainable and c) simple to understand and communicate.

    The right rewards make incentive programs work.

  2. Analyze the Audience: The entire workforce is most likely not the intended audience. Determine which group has the ability to impact the desired change. Will you involve the audience individually or in teams?
  3. Fact Finding and Involvement: Be aware that external factors may also impact results. Involving representatives from the participant audience in this phase will help to identify actions necessary to achieve the desired results. This is also the step where you decide which elements you will measure.
  4. Rule Structure and Budget: There are a variety of effective structures for incentive programs. Open-ended (where all who qualify can win) have benefits that differ from closed-ended (where only the top performers win), and there are places where each make sense—or you may wish to structure a program that uses a combination of both. The rules must be fair to all participants. Setting the budget requires identifying fixed costs and getting the best estimate possible for the award budget based on program expectations. An incentive professional can help you with this process. The rule of thumb for program spending is: 80 percent rewards, 10 percent promotion, five percent administration and five percent training.
  5. Select Rewards: This is another step where it is beneficial to include participant representatives in the planning process. If the employee is not motivated by the rewards you choose, the program is not going to be effective. Likewise, the reward must be commensurate with what you’re asking of the audience (i.e. working overtime on a project for six months to earn a $10 gift card is probably not going to work). Like any promotional product, an effective incentive:
    1. Is appropriate for the goal (it’s “worth it” to the participant)
    2. Reinforces the brand values of your organization
    3. Offers “trophy value”: something they’ll remember
    4. Creates excitement among participants
  6. Communicate the Program: Decide how you will announce and launch the program. Will you use social media, email or other internal announcement? Is training necessary? How, and how often, will you communicate throughout the program? How will you announce results and reward achievers?
  7. Operate and Track Results: Results measure and track outcomes; process measures and tracks actions that lead to the results. Based on your rule structure, choose two or three outcomes or process measures that will allow you to gauge the success of your program.
  8. Fulfill Rewards: The more immediate, the better. A formal presentation with peers can be as meaningful as the reward itself. Make the redemption process as easy as possible for the recipient: what information is required? Will the recipient receive order confirmations and shipping notices? How will you handle customer service?
  9. Evaluate and Measure: Include quantitative (that which can be counted) and qualitative (opinion or perception) measures—both can be valuable in evaluating program success. Document outside factors that contributed to the outcome, as well as any unintended consequences of the program. Calculate return on investment based on your budgeting process, weighing fixed and variable costs against the performance improvement or other gains achieved as a result of the program.
  10. Celebrate Success! Celebrate publicly: often the recognition is as important as the reward. Publicize internally and in appropriate external channels. Will you plan a banquet or awards dinner? Do you have support from the highest level? Will your top executive be on hand to recognize achievers?

Thanks to the Incentive Marketing Association for this information. Contact APTCO to partner with you in developing your own incentive program.

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