Put Cash in The Past

The idea of cash is alluring – it is flexible and it gives you the freedom to purchase anything. Who couldn’t use a little extra cash? However recent studies have shown that in terms of incentives, cash may not be the most effective and engaging reward for long term results.

Contrary to popular belief, the 2015 Landmark Survey shows that when given the option, employees did not automatically choose cash as part of their reward. “The study found that on average the most preferred award experience for large awards is a travel award, presented by travel executives, communicated in a public announcement, and combined with the opportunity for special networking” (Van Dyke).  This is good to know since companies are spending $77B on non-cash awards annually!

While cash rewards provide you with the ability to buy anything you want, The Economic Theory suggests that people are more likely to spend cash on utilitarian items rather than something more personally gratifying (Helion and Gilovich 2014; Thaler 1985). Once the cash is spent, the gratitude tends to go with it.  When employees are provided with an experience such as a bucket list trip of a lifetime, they are able to take away priceless memories while having the opportunity to strengthen their relationships with their coworkers and executive leadership. Not to mention, a vacation is a bit more glamorous than a trip to the grocery store.

More and more we are finding that people are motivated by an experience rather than the tangible reward itself.  What is the recipient’s perceived value of the award?  How does the presentation of receiving the award make them feel?  Everyone responds differently to various incentives so to see the most favorable ROI on your program it is suggested that you craft it with levels of personalization weaving throughout.

In the future, instead of assuming that cash is the best motivator, dig a little deeper and determine what would really engage your sales team, employees or channel members.



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Written by Kalyn Tripodi

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JNR Incorporated is a globally recognized leader specializing in creating custom programs that motivate, engage and reward the employees, customers and channel members of our Fortune 1000 clients. For over 35 years, JNR has designed and delivered a comprehensive suite of solutions including incentive travel, prepaid reward and gift cards, meetings and conferences, events and entertainment, technology solutions and marketing communications.  Our programs produce measurable results and are proven to increase performance, loyalty and revenues.

Photo: “Flying” by Moyan Brenn is licensed under CC by 2.0

JNR Spotlight: To Stair-Step or Not to Stair-Step

Tiered or “Stair-Step” programs are a common incentive structure, awarding individuals or businesses with increased per unit payouts as they reach certain thresholds of sales production.  Makes sense, right?  Sell more, get more – the ultimate in pay for performance.  For example, sell 1 to 10 widgets, earn $5 per unit.  Selling 11 to 20 widgets and earn $10 per unit.  For selling 21 to 30 widgets, earn $15 for each widget sold.  Other elements can also be incorporated into the program, including fast-start bonuses, making structures more complex.

The stakes get high when the program is retroactive, meaning the $5 that you get from selling widgets 1 through 10 becomes $15 per unit from widget one – when you reach the target bonus  threshold.  Wow, a lot of money is on the table at the end of the program as participants strive to hit that top tier.  Sounds exciting, doesn’t it?

These programs can be quite controversial however, especially in industries such as automotive where Stair-Step programs can actually create an unequal playing field between large and small dealers – if the program structure is too general for all dealers in the network.  The larger volume dealers may use their forecasted Stair-Step dollars to arbitrarily offer discounts to customers.  Large dealers always set the market price.  With Stair-Step programs, they can control and manipulate market pricing with little to no price competition from the smaller dealers.  Large dealers increase volume; smaller dealers struggle to be profitable.  This can also cause an eroded customer experience.

Smaller dealers are forced to make a decision: do they take a gamble and match market pricing of the larger dealers, betting that they will reach their Stair-Step objective and come out of the program profitable.  That can be a big risk for dealers in a small market who have limited potential.  This is why the National Automobile Dealers Association (NADA) has taken such a strong position against Stair-Step incentives as they can negatively affect a large portion of their membership base.

So what is a manufacturer to do?  They want to drive volume, especially in cases with excess inventory, need to move certain models or need to drive market share.  They must take care of their top dealers and if mid to small dealers can reach set thresholds, they win too.  However, in too many instances smaller dealers can take a hit directly to their bottom line.

So manufacturers should and do care.  They are taking action with different incentive structures that include:

–          Periodic Bonus – disrupts the month-end discount push, but forward thinking large dealers will eventually adjust their annual strategies to a monthly projection in order to set market price.

–          Groupings – set specific attainable tiers, by dealer or groupings of similar sized dealers, based on historical volume.  Gives dealers of all sizes more of a comfort level in reaching their objectives.  However, can still put discounting power in the hands of the larger dealers.

–          Non-Cash Incentives – take away the cash element and give dealers trips, experiences, merchandise, rewards to disburse to their teams, etc.  This is quite effective in engaging dealers to motivate their teams to exhibit the right behaviors everyday to drive sales and achieve quota.  Some dealers can, however, use cash-based discounting to drive sales in contest periods in order to achieve the award objectives.

While popularity and implementation of Stair-Step programs ebbs and flows with the economy, they will be utilized by sponsoring companies in some form or another for the foreseeable future.  With advances in program structure, analytics and past experience, companies will be tasked with designing programs that will` generate their desired effect.  That means recognizing clout of your top performers and maximizing potential of the middle group through strategic design and engagement.

As an incentive marketing company we support our clients’ incentive initiatives with a variety of tools to engage, motivate and reward their target audience(s) for achieving and exceeding their goals and objectives.  Fundamentally, for programs to be effective and successful, the following incentive principles should be adhered to:

–          Is the program attainable?

–          Can the program be communicated clearly and is it fair?

–          Are expectations clear and is progress toward achievement communicated adequately?

 

Following these principles virtually assures a successful program with maximum participation.  It does take work and collaboration with various business teams to understand the dynamics and nuances of their business, so together they can develop programs aimed at driving behaviors that generate optimal results.

For more information about JNR and how we help companies design and execute successful incentive programs, feel free to give us a call at 800.343.4546.  That’s what we’re here for and what we do every day.

 

By JNR Incorporated

Written by Mark Houska

Director, Business Development

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JNR Incorporated is a results-based, globally recognized leader that specializes in creating custom travel, meeting, event, prepaid card and merchandise programs that motivate, engage and inspire the employees, customers and channel members of our clients. We have over 30 years of experience working with Fortune 500 companies of many diverse industries. Our programs are tailored to fit the specific needs of marketing, sales, management and human resource professionals. The unique solutions we apply are measurable and proven to increase performance, loyalty and revenues.

German Spotlight: German Honey Cookies

The next stop on JNR’s journey around the world takes us north to Germany and the wonderful food this country is known for.

Germany cuisine has been influenced by neighboring regions as well as by changes in social and political parties over the centuries which results in variations from region to region.  Cakes and tarts are served throughout the country and cookies have become a popular accompaniment to afternoon tea.

Cookies began as luxury in the 18th century but were only affordable for the wealthiest in Germany due to the high price of sugar and other ingredients. Early German bakers wishing to make baked goods would substitute the honey instead of refined sugar in their cakes, pastries and cookies as it was Germany’s most readily available sweetener.

In the late 19th century a cheaper sugar derived from the beetroot become available and the working class was able to bake cookies for special occasions, especially Christmas, using sugar instead of honey.

Today, some German recipes still call for honey as a sweetener for its mild flavor and to add nutritional value.

Today we have a recipe for German Honey Cookies or Honig Plätzchen:

German Honey Cookies

Total Time:    30 min

Prep:     15 min

Cook:    15 min

Yield:    8 – 12 cookies

Level:    Easy

Ingredients

  • ¾ cup or brown sugar
  • 1 cup shortening (butter flavored if available)
  • ¾ cup honey
  • 2 medium eggs
  • 1 tsp vanilla extract
  • 1 tsp baking soda
  • 4 cups all-purpose flour
  • 1 tsp of ground ginger

Directions

Line a cookie sheet with baking paper or grease it with butter.

Melt together sugar, shortening and honey in a saucepan over low heat. Set aside and let cool.

Mix together eggs, vanilla, baking soda and ground ginger. Slowly mix into the cooled honey mixture. Gradually mix in the flour. Stir until blended.

Use a teaspoon to drop mixture into uniformed balls on the cookie sheet. Leave 2 inches between each drop of mixture. Bake at 350 degrees F for 12 – 15 minutes or until golden brown.

Remove and let cool before serving.

If you would like to learn about how JNR can organize a fabulous incentive trip to Germany, where participants can experience the wonders of German food, please email jnrinfo@jnrcorp.com.

By JNR Incorporated

Written by Stephanie Thomas

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JNR Incorporated is a results-based, globally recognized leader that specializes in creating custom travel, meeting, event, prepaid card and merchandise programs that motivate, engage and inspire the employees, customers and channel members of our clients. We have over 30 years of experience working with Fortune 500 companies of many diverse industries. Our programs are tailored to fit the specific needs of marketing, sales, management and human resource professionals. The unique solutions we apply are measurable and proven to increase performance, loyalty and revenues.

Motivating Millennials: Traditional Engagement Is Not The Answer

Watch out Baby Boomers and Gen-Xers, the Millennials are on their way! The demographics of business are changing, and with it, the environment in which employees can best harness their talents. Gone are the days where communication is handwritten and hierarchy is strictly structured, and with this change comes new strategies that employers must understand to capitalize on the value of the increasingly younger workforce.

The rigidity of various firms established decades ago leaves executives struggling to ‘engage’ the youth moving into their careers without looking upon them as entitled or self-centered. However, in recent studies, this is where the problem may lie – engagement is not the standard protocol, as it is so widely believed, to keep younger employees stimulated. Employers are gradually using more resources to further engage Millennials, when this is actually unnecessary.  Younger workers for the most part have actively sought out the position within their company.  This speaks to this generation’s goal oriented nature, proving that they are highly determined and productive when given autonomy and a clear purpose.

Highlighted in a recent article from Forbes, one of the largest catalysts to the progressive alterations in business demographics is the difference in education between each generation. The Millennials, or Gen Y have grown up in a world with technological advances at every step of their life.  In return, they are the most tech savvy generation and as a result, can better exploit these skills to be more efficient in learning and producing results than their Gen X or Baby Boomer counterparts. The influx of networking and social media have created a unique dynamic of the Millennials, they work well both independently or in social or group task setting, to the benefit of any organization in the 21st century.

So, how does a company successfully incorporate and promote Gen Y into its workforce? According to Talented Heads, here are some simple methods that have the potential to encourage the Millennials to positively harness their energy for their respective jobs:

  • Millennials are deeply drawn to work that promises self-direction and an individual’s own creative control.
  • Millennials thrive under leaders who are accessible and provide a comprehensible narrative about the organization’s direction.
  • Millennials desire a voice in the company to share their opinions and to challenge themselves to become better problem solvers.
  • Millennials provide their best results when they are able to directly interact with their work in hands on experiences.
  • Millennials most powerful incentive is a flexible work-life balance, where basic needs are met and time both inside and outside of work is enjoyable.

Even though the times are changing at a rapid rate, companies should look at this as an excellent opportunity rather than an unavoidable conundrum. The Millennials are here to stay, so it is of the utmost importance to make their transition into any organization a smooth one. The generation of the future will undoubtedly provide great benefits if a company is willing to support the newest additions to the real world to keep retention high and employees motivated.

For more information on how JNR can help you to engage your Millennial employees contact jnrinfo@jnrcorp.com

By JNR Incorporated

Written by Andy Tallon

 

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JNR Incorporated is a results-based, globally recognized leader that specializes in creating custom travel, meeting, event, prepaid card and merchandise programs that motivate, engage and inspire the employees, customers and channel members of our clients. We have over 30 years of experience working with Fortune 500 companies of many diverse industries. Our programs are tailored to fit the specific needs of marketing, sales, management and human resource professionals. The unique solutions we apply are measurable and proven to increase performance, loyalty and revenues.