Non-Cash Rewards are best for accelerating and reinforcing

OBM strategies

Patrick Carpenter │ GGOBChris Galloway │ 3Cheers!

The Winner’s Circle

• Session Goals– Learn best practices for non cash rewards by the

market leader in non-cash rewards– Give you the facts you need to justify increasing

your non cash rewards programs– Support for the execution of your MiniGames™

Educate(Think)

Empower(Act)

Engage(Feel)

We are here

Part of a Total Rewards StrategyN

on-

cash

and

Ca

sh

Reward for Perform

ance

Lever Objective Program Ownership

Target % - Annual Pay

Recipients (% of

Population)

Recognition

• Recognize and reward excellence• Recruit and retain top performers• Reinforce company values/ core

competencies

0.75 – 1.0%of Total

Pay

RewardsIncentiveAwards

• Incentivize achievement of short-term business objectives

• Promote specific behaviors/activities• Increase motivation and productivity

to well-above expected levels

1 – 2.5% of Total Pay

Performance Comp

Incentive Pay

• Incentivize achievement of company objectives

• Recruit and retain top talent• Link individuals to business goals

9-30% of Total Pay(non-sales)

Salary Base Comp

• Pay for performing job duties • Ensure consistency in “meets

expectations” for objectives; baseline for performance

• Recruit and retain talent

70-100% of Total Pay

Benefits• Security Needs• Work Environment

Non

-ca

shCa

sh

Connecting OBM to Rewards

Healthy OBM companies go beyond simple recognition of the power of everyone understanding the numbers. The top OBM companies have locked-in on patterns of non-cash rewards. And when non cash rewards are executed well they reinforce everything good about business – giving purpose to work and connecting us with our fellow team members. Maritz is to rewards and recognition as SRC is to OBM. They practically invented the practice.

Topics1. Goals of recognition2. What makes recognition effective?3. Why non-cash?4. Measurable value of non-cash rewards5. How to get started with implementing a

program

Why Recognize?

“You get a paycheck, isn’t that enough?”

Recognition drives engagement

Meaningful recognition causes a 14% increase in employee engagement and productivity.

Bersin & Assoc., 2012

When combined with OBM practices, this will result in:• More games played AND won• More profit to invest• Self-funding for employee rewards

… resulting in even higher engagement!

Why Recognize?

You want:

More of a good thing / behavior

Consistent best effort – aka care

Know that you notice/care

Ownership/dedication/loyalty

… An Emotional Connection

Effective Recognition

Rational AND Emotional

Multiple Motivators

Individual AND Social

Peop

le P

rinci

ples

Bottom Line

Effective Recognition

It’s not just about the rewards• Purpose, authenticity• Atmosphere for

appreciation• Flexibility and style• Personal, in person• Non-cash rewards

Handout

• Know and teach

the rules• Follow the action

and keep score

(huddles)• Provide a stake in

the outcomeSource: The Great Game of Business

Why focus on Rewards?

• Significant investment– 90%+ of program cost

• Can work against you– Entitlement– Demotivating– Decreasing loyalty

Choosing Non-Cash Rewards WILL pay long-term dividends.

Why? …

What is a social norm?

Proof Point #1

Source: Heyman and Ariely, 2004. “Effort for Payment: A Tale of Two Markets”

101 159 168

162 169 168

Source: Heyman and Ariely, 2004. “Effort for Payment: A Tale of Two Markets”

Proof Point #1

Proof Point #2

30 60 90 120 150 1801000

1200

1400

1600

1800

2000

Baseline Cash Bottle Origami

Source: University of Zurich 2011. “The Currency of Reciprocity – Gift-Exchange in the workplace”

5%

25%

30%

Number of Characters Entered

Proof Point #2

Source: University of Zurich 2011. “The Currency of Reciprocity – Gift-Exchange in the workplace”

+ =?5%

Market ExchangeLow Effort

25%

Social ExchangeMedium Effort

30%

Really??

Proof Point #2

30 60 90 120 150 1801000

1200

1400

1600

1800

2000

Baseline Choice Bottle

Source: University of Zurich 2011. “The Currency of Reciprocity – Gift-Exchange in the workplace”

25% 25%

Number of Characters Entered

Choice!

Other Findings

1. 2007 presentation by Scott, Jeffrey, Ph.D., entitled “From Art to Science: Why Tangible Non-Cash Rewards are More Rewarding for You and Your Participants,”

2. Jeffrey, S. A., & Adomdza, G. K. (In Press). Incentive Salience And Improved Performance. Human Performance3. Markham, S. E., Scott, K. D., & McKee, G. H. (2002). Recognizing Good Attendance: A Longitudinal, Quasi-Experimental Field

Study. Personnel Psychology, 55(3), 639-660

University of Chicago2007 (1)

• 3X more cash to drive behavior than tangible rewards

Human Performance Research 2011 (2)

• Non-Cash Awards capture more employee attention

Field Study 2002 (3)

• 29% - 52% reduction in absenteeism

3-for-1

How to get started

Program design goes well beyond providing a tool and access to rewards

Benchmarks

• Recognition budgets should be between 0.5% and 3% of payroll

• Sales incentive prizes are not included in this budget (contra funds)

Handouts

Thank You for Attending!

Non-Cash Rewards are best for accelerating and reinforcing OBM strategies

Presented by: Patrick Carpenter and Chris Galloway

Please fill out a session evaluation using the paper forms on the table or the conference application on your phone/tablet.