Rewarding your staff for performance can be a very powerful way to increase sales, customer satisfaction and employee engagement. Before diving headlong into creating your incentive program, it is critical that careful thought and preparation is given to planning and execution of it. The benefits of a well-designed program are many – it can send a powerful message about what’s important, it can motivate sales activity and it can feed both the intrinsic and extrinsic needs of Reps. On the other hand, a poorly designed program can carry several risks such resentment and de-motivation of staff, counter-productive behaviours, or disengagement because the program is too complex or too vague. Through our work in the industry, we recommend 4 key stages to building an effective incentive program for your organization.

Stage 1 – Define and Plan:

• Determine your Business Drivers – It’s important that you are crystal clear about WHAT your incentive program needs to achieve for your organization. Are you looking to sell more “widgets”? Is it profit margin that you’re looking to optimize? Is there a customer retention issue in your business? Being ruthless about prioritizing what your business really needs will go a long way in ensuring that your incentive program actually fulfills that need.
• Determine your Objectives – Once you know what needs to change or improve in your business, the next important step is to determine WHAT it needs to change to. Current state versus desired state, if you will. High ROI incentive programs are highly dependent first on sound planning and alignment to corporate objectives and then on strong support through effective front-line leadership and coaching.

Stage 2 – Develop High Level Framework:

• At this stage in the incentive plan development process, you should be determining the framework for HOW to achieve the objectives identified in the planning stage. Answering questions like:
  
  • Who will be eligible for this incentive?
  • How will we fund it?
  • What will it look like for the Individual, Team, and Company?
  • Will it satisfy their WIIFM (What’s In It For Me)
  • What measures will we use?
  • What formulas will we use?
  • Will there be minimum qualifiers?
  • Will there be escalators for exceptional achievement?
  • How do we ensure a balanced approach so that we don’t encourage counter-productive behaviours? (We’ve all seen Reps manage their AHT by disconnecting on clients!)
  • How do we build enough flexibility in the program that affords us the ability to adjust for seasonality and changes in the business?

Stage 3 – Design Detailed Program:

• This is the stage where targets are established. A few words on setting targets. Firstly, allow plenty of time for target setting and modelling. It takes much longer than one would think! Asking a cross-section of Reps to act as your Challenge Team will provide you with invaluable input. This will definitely add time to the process at this stage but will remove many hardships later on for all stakeholders. This Challenge Team will provide the sanity check against the relevancy and realistic nature of the targets. By involving them early, their input will help ensure that when this program is rolled out to the masses, it is not rejected outright by the very people that it was built to motivate.
• Secondly, beware of WHAT you decide to measure. Assessing the Reps against something they have no control over is a recipe for disaster. (I once knew of an incentive program where Reps at a financial institution were penalized every time a customer called to make a withdrawal from their own bank accounts!)
• Lastly, setting targets too high will make Reps feel “ripped off” and resentful while setting them too low will encourage mediocre performance and diminish the integrity of the incentive program. Always ensure that targets are attainable while still being challenging.
• Performing ‘What-If’ Modelling at this stage will rescue you from negative repercussions later on. Take the time to think about how you want to manage change as you introduce any new incentive program. The best way to accomplish this is to take 3 months worth of real data and run it through the new model. Compare the new results with the historical results. Was the percentage of top performing Reps comparable? Would those eligible Reps have earned more money, less money or about the same? Based on the real data, would the new incentive program drive the right behaviours? Will you get the return on investment on the dollars spent versus the results you want to achieve? Have you set your Reps up for success? Paying out significantly less money may get you a serious lack of participation…or backlash and/or attrition at worst? Performing the ‘what-if’ modelling will go a long way in testing the feasibility of your incentive program.
• KISS – In this case, the two SS’s in KISS stand for simple and specific! Make the rules clear, simple and comprehensible. A complex incentive program that is difficult for any Rep to understand will significantly limit participation. A vague program will make Reps suspicious that the plan is designed to keep them from earning a bonus.
• Circle back with your Challenge Team to test the design of the program and communication materials. This step does double duty. It is a final test against any lingering flaws that can be corrected before going live. More importantly, getting the stamp of approval from a select group of Reps, especially if they are seen as informal leaders in the organization, can provide you with influential advocates when socializing the new program. A few friendly voices in the room who can help handle any possible objections will establish trust and build credibility for the leadership team and the new incentive program.

Stage 4 – Implement & Track:

• Document the program in a user-friendly manner and add the “Fine Print”. Make the document available on the company intranet so people can reference it as often as they need to. Continue to motivate and educate Reps through earnings calculators. These allow Reps to model potential plan payouts under different performance scenarios. These calculators will become an exceptionally valuable coaching tool as they can be used to help Reps set monthly stretch targets for themselves.
• Successful incentive programs have as much to do with change management, communication and training as they do with analysis and design. Sequence the rollout from the top down. Give executives and influential managers responsibility to explain and lend support to the changes.
• Consider grandfathering the existing incentive program while running the new incentive program in tandem for a minimum of three months. This will give the Reps time to adjust to the new, upcoming program and provide them the opportunity to develop their own strategy on how to be successful with the new program.
• Assign responsibility for tracking results and make performance reports available to participants at all levels - front-line, management, and executives. Ideally, performance reports would be updated and published real-time. As this is not always possible, daily posting of results is the next best thing. Frequent updating of performance reports allows Reps to track their progress and make adjustments to their performance if they find themselves veering off course.
• Be prepared to tweak and fine-tune the program to ensure that it continues to meet your Business Objectives.
• Provide specific next steps to your front line leadership team as they are pivotal to the success of any incentive. They should be clear in how they will work with each individual Rep to help them be the best that they can be. They should use their effective coaching skills and develop a plan with their Reps to accelerate skill. After all, if you have set up your incentive properly, the more money that your Reps make should mean that you are earning more revenue. In the Call Centers we have operated, front line leaders coach Reps to be incrementally successful month over month.

Building a successful incentive program that motivates, challenges, drives business performance and is perceived as “fair” is no easy feat but it can be done by approaching it very systematically and not skipping any of the four steps outlined above. You get out of an incentive program what you put into it. Most incentive programs are low effort, low risk, and therefore, low return. Remember, incentive plans should be designed and operated to create value, not just to deliver pay. By following this four step process, it IS possible for contact center supervisors and managers to create an environment where a culture of optimism and top performance can flourish together.