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The Goldilocks question:
what is the right amount to spend on incentives?
Employee Performance Management System

                                Quality
                               Monitoring
                                               Employee
              CRM
                                               Selection
            Application
                                              Application

                            Snowfly’s
                            Incentive
                           Management               Agent
          Workforce         Program               Scorecard
         Management
                                                  & Analytics



                      Dialer                ACD
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
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…
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
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
What do employees really want?
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
What employees really want!
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
How Much You Should Spend On Incentives
Long term goals & commitment
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”
How to earn it

 Play quick games to determine the
 amount
 How much you win is exciting
 Broadcast the names of big winners
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
Because games are effective
Snowfly games
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)
Employees love it
      I would like to continue using Snowfly.

                  3%
                       0%
             7%



      12%

                                                Strongly Agree
                                                Agree
                                                Neutral
                                                Disagree
                                                Strongly Disagree



                              78%
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
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.
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
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
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
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
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
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
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
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
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
Questions?
Bob Cowen
248-324-1161
rcowen@snowfly.com   Thank you

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How Much You Should 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
  • 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
  • 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