How much should you spend on incentives?

1. The Goldilocks question:
what is the right amount to spend on incentives?

2. Employee Performance Management System
Quality
Monitoring
Employee
CRM
Selection
Application
Application
Snowfly’s
Incentive
Management Agent
Workforce Program Scorecard
Management
& Analytics
Dialer ACD

3. Snowfly
Dr. Brooks Mitchell Successful entrepreneur
CEO & Founder Aspen Tree Software
University of Wyoming Nationally recognized speaker
Professor of Management Aspect, Avaya, Noble, Pipkins
Author
Games, Work, and Human
Motivation: An Applied Behavioral
Approach to Employee
Achievement and Recognition.
Bet on Cowboys, Not Horses.
Director of HR at PepsiCo Kipling’s Error III.
Director of HR at Texas
Instruments

4. We all can do better
Dr. Aubrey Daniels
R+
Incentive $
“Want-to-do” curve
Performance Level
20% - 40%
Discretionary
Effort
R-
Base $
MINIMUM REQUIREMENTS
“Have-to-do” curve
Over Time…

5. Top Question: how much?
Spending more than necessary
Not knowing how much is too
much or too little
Giving out incentives for what is
already occurring
Spreading budget to thin
Trying to get a lot of change for a
little money will cause employees
to lose focus

6. Pay for what helps your bottom line
Incentives only for what’s not happening
Or not happening enough
Know the facts
More than 3% of base pay for incentives is
wasted money
Usually <2%, per FTE
Two hour’s wages
Separate from regular payroll

7. What do employees really want?

8. What do employees really want?
Cross pen/pencil
64 listings
Company logo
Caterpillar, Apple,
Domino’s, NeXT, Dodge,
Ford, Nabisco, Royal
Caribbean, Xerox, Unisys,
Footjoy, Lucent, Exxon,
Nabisco, VW, Microsoft,
Audi, NBC, Bayer, Harvard,
Nextel, Pepsi, Gateway,
Canon, Penske, Visa,
Amtrak, Texas A&M, TWA

9. What employees really want!

14. Long term goals & commitment

15. How to earn it
Keep it positive, fair, fun and exciting
Everyone who qualifies wins
“I never win, so why try?”
“The boss plays favorites”
“The game is rigged”

16. How to earn it
Play quick games to determine the
amount
How much you win is exciting
Broadcast the names of big winners

17. Random Intermittent Reinforcement
(playing games)
Earn Tokens for accomplishing goals
Use tokens to play a game to earn points
Use points to “buy” desired stuff
Goal/Behavior = = Redeemable Points = Prizes

18. Because games are effective

19. Snowfly games

20. Why play games for points?
(random intermittent reinforcement)
Play at:
99%+ play games
Kiosk, break or lunch room
All based on chance
Workstation (limited)
Every game wins every
Home (40% +)
time
Less than 10
5-20 seconds
minutes/week
Token = 10¢ 90 seconds/day at work
Point = 1¢ No “Mulligans”
Token Average = 10 No tokens = can’t play
points
Max = 5,000 points ($50)
Min = 2 points ($.02)

21. Employees love it
I would like to continue using Snowfly.
3%
0%
7%
12%
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
78%

22. How to pay it
Monetary power = choice!
Branded reloadable debit cards
Gift cards both tangible and electronic
Management isn’t clairvoyant
Resolves an impossible task
No minimum charge to convert points to $
Encourages frequent refills thus reinforces
the activities

23. Solution
Set up goals so that you can justify paying
more $$ in incentives IF a higher number of
employees qualify.
Go over budget……GREAT! That means
employee performance exceeded expectations.

24. Solution
Be realistic with your budget
Allocate your budget based on what is most
important to your organization
Significant improvement in one area is usually
better than very little improvement in several
areas

25. Budget Example
$25 per employee per month
Attendance, schedule adherence, sales per
hour, call quality
Daily attendance = 2 tokens
Weekly attendance = 10 tokens
Weekly schedule adherence = 15 tokens
Daily sales goal = 5 tokens
Meeting quality score is required to qualify

26. Budget Example – short contest
or voluntary overtime or weekend
Short Contest
Top goal = 30 tokens
Mid-goal = 15 tokens
Lower goal = 5 tokens
Voluntary overtime or weekend
1 hour = 5 tokens
2 hours = 15 tokens
3 hours = 30 tokens
Paid immediately

27. Budget Example for new-hires
Tenure Incentives for the first 90 days
Decrease in frequency
Increase in $ value
1st day = 100 tokens
Training completion = 200 tokens
End of 1st month = 250 tokens
End of 2nd month = 500 tokens
End of 3rd month = 1000 tokens

28. Snowfly is much easier
You no longer need to:
Shop for prizes
Offer overpriced merchandise from a catalog
Decide upon theme or games
Create spreadsheets and data-bases
Frequent & manually update results
Build lots of reports

29. Snowfly improves KPI’s 20%
for 2 hours of labor cost per month
Absenteeism
Schedule adherence/availability
Up-selling/conversion rate
Fewer/shorter meetings
Quality scores
Dollars collected
Attrition/turn over

30. Justification for Snowfly
Examine & replace present incentives/rewards
Does it work?
Is it cost effective?
Get participation from vendors, clients,
suppliers & local merchants
Conduct side-by-side 90 day test

31. Why Snowfly gets better results
(especially with Generation Y & Generation X employees)
Rewards behaviors as they happen
Provides fun and excitement
Immediate and separate from regular
payroll
Gives choice of rewards

32. Let’s get started
• Three reasons to conduct a 90 day test:
Improvement of KPI’s
Eliminates a huge administrative workload
Snowfly fee is less than doing it on your own

33. Questions?
Bob Cowen
248-324-1161
rcowen@snowfly.com Thank you