The Biggest Flaw In Reward Program Design

Reward and motivation strategies in most larger organizations are seriously flawed.  I can say that because I've looked at a lot of programs at a lot of companies.

It's not that the individual programs have huge problems.  Most are fairly well-designed.  They either meet or exceed the needs of the program manager – and they make the majority of participants happy.

But they are flawed.

Alignment Drives Better Performance

The biggest flaw is that they are not aligned.  What I mean by that is individual programs have specific goals and objectives, specific award structures and specific rewards at the end (or during) the program – they are specific to the needs of the individual planning manager… But… many, many, many (one more), many times the programs are at cross purposes.  Overall they cancel each other out and the enterprise result is less than it should and could be.

We've looked at companies with large sales organizations and typically we find…

• A corporate sponsored overall reward program targeting company goals
• A divisional sponsored reward program focused on the goals of the division manager
• A team reward program focused on what the individual manager needs to achieve their goal

Sometimes they run back to back, sometimes they overlap and most of the time they conflict.

Think Global Act Local

It's somewhat of a cliche these days to say think global act local – but cliches are cliches because they are usually true.  As companies decentralize authority to better target their individual marketplaces – either vertically, horizontally or geographically – managers are given budget and authority to run promotions and reward programs to help them achieve their goals.

These program efforts run beneath the radar and are rarely discussed at top level meetings.  If they are talked about it is in passing – while describing a line item on a budget for sales "programs" or "contests."  However, treating these programs as one-offs will keep your company from performing at it's best.

While the local programs are running the global objectives are being missed.

What You Can Do…

In any engagement we get involved in we start by looking at alignment and application of that alignment.  Typically we recommend…

• Training on proper program design for all managers with budget and authority to run programs in order to ensure they are all speaking the same language and have the same level of understanding
• Overview of corporate goals and objectives
• Outline of corporate sponsored promotions and their desired affects
• Discussion on how to leverage their local budgets to hit both their goals and reinforce the corporate strategy
• And finally – a promotions/program calendar – whereby all managers provide input on when/how long they plan on running their promotions and can see what other managers are doing and how the ENTIRE calendar looks

Aligning your promotions will ensure you get the most from your dollars and the most from your people.  Take the time to communicate goals, educate on process and integrate your tactics for better overall return.