Table of Contents Foreword to 2nd Edition ....................................................................................................... 6 Key to Success: Effective Design and Implementation ......................................................... 7 Executive Summary .............................................................................................................. 8 Introduction ............................................................................................................................ 9 Chapter 1: The Emergence of Engagement and Its Impact on Rewards .............. 10 The Power of Engagement ......................................................................................................... 12 Chapter 2: Incentives, Rewards and Recognition ...................................................... 17 Definitions ...................................................................................................................................... 17 Distinctions Between Incentives, Rewards, Recognition and Compensation ............. 18 The Research Basis for Use of Non-Cash Rewards Versus Cash ...................................... 18 Some Incentives Distract .................................................................................................................................. 21 Cash vs. Non-Cash ................................................................................................................................................ 22 Why Non-Cash Rewards Usually Work Better...................................................................... 24 Don’t Forget the Customer .............................................................................................................................. 24 Distinguish Rewards and Recognition From Compensation and Pricing ............................... 25 Don’t Let Rewards Become Entitlements ................................................................................................ 25 The Concept of Engaging Rewards .......................................................................................... 26 The Power of Purpose ........................................................................................................................................ 27 Autonomy and Purpose ..................................................................................................................................... 28 Modern-Day Recognition ................................................................................................................................. 28 Ramping Up Recognition .................................................................................................................................. 31 Peer-to-Peer and Social Recognition .......................................................................................................... 32 A Culture of Recognition ................................................................................................................................... 34 Chapter 3: Applications for Non-Cash Rewards ......................................................... 35 Non-Sales Employees ......................................................................................................................................... 35 Sales Employees .................................................................................................................................................... 36 Consumer Loyalty, Referral, and Surprise and Delight Programs .............................................. 38 Distribution Partner Programs ..................................................................................................................... 38 An Enterprise Approach ................................................................................................................................... 39 Chapter 4: Best Practices for the Use of Incentives, Rewards and Recognition 41 The Right Way to Reward and Recognize ................................................................................................ 41 Sometimes Engagement is the Wrong Choice ....................................................................................... 42 Emotion ..................................................................................................................................................................... 44 Why We Work ........................................................................................................................................................ 45 From Worst to First ............................................................................................................................................. 46 Why Customers Engage .................................................................................................................................... 48 Total Motivation (TOMO) ................................................................................................................................. 48 Communication/Buzz ........................................................................................................................................ 49 Learning .................................................................................................................................................................... 49 Put Everybody on the Research and Development Team ............................................................... 50 Corporate Social Responsibility .................................................................................................................... 51 3 The Art & Science of Engaging Rewards ................................................................................................................................................. 52 Chapter 5: How To Make Rewards Engaging (or Not) .............................................. 53 A “Total Rewards” Approach .......................................................................................................................... 54 Program Design – Linking The Reward With Measurable Outcomes ............................ 55 Reward Selection – Demonstrating a Clear Understanding of the Audience in Award Selection .................................................................................................................................................................... 58 Customization and Delivery: One Size Does Not Fit All .................................................................... 59 Response Mechanisms ....................................................................................................................................... 58 Web-Based Programs ......................................................................................................................................... 59 Chapter 6: Types of Non-Cash Rewards and Their Application ............................. 61 Merchandise Rewards ....................................................................................................................................... 61 Experience-Based Merchandise Rewards ............................................................................................... 63 Gift Cards .................................................................................................................................................................. 63 Incentive Travel .................................................................................................................................................... 64 No Single Reward or Reward Type Works Best For All ................................................................... 69 Individual Incentive Travel ............................................................................................................................. 69 Group Incentive Travel ...................................................................................................................................... 68 Meetings and Group Incentive Travel ....................................................................................................... 68 Chapter 7: ROI, Analytics & Measurement................................................................... 70 Measure, Analyze, Report and Take Action ............................................................................................ 71 Technology............................................................................................................................................................... 74 Measure Frequently and Act Fast ................................................................................................................ 78 ROI Measurement: John Deere Credit........................................................................................................ 78 Chapter 8: Where to Buy Rewards and Recognition ................................................ 78 Summary ............................................................................................................................... 82 Appendix: Case Studies ..................................................................................................... 83 WESCO VIP Passport: Dealer Distributor Incentives ......................................................... 83 United Health Group...................................................................................................................