The Daily Perk

Obama rewards and recognition may pay off in the long run

As a token of appreciation to his campaign staff, Barack Obama just announced in an email to his dedicated foot soldiers that any person who joined the campaign before Sept. 6 would be able to keep the laptop and cell phone given to them to use for the duration of the campaign. As if that were not enough, he also offered them healthcare until the end of the year, and as an additional bonus, a month of severance pay. The economist.com reported the news in their Nov. 7 blog.

The blog post points out that some donors (especially those who were asked for donations just the weekend before the election) may take an issue with the decision to donate these gifts to campaign workers. Obama’s campaign donations shattered records by raking in more than $600 million over the course of the primary and general election combined, according to a New York Times article. Under the Federal Election Committee rules, Obama can save the leftover donations for his next campaign, but is prohibited from using the money for personal use. While he would be wise to save the donations for his next campaign, in some ways his decision regarding the phones and laptops is key to reinforcing loyalty. These items have already depreciated in value, and are therefore worth more to those who have been using them over the past several months than to someone who would buy them back.

Anyone in the incentive industry should also understand the potential ROI from Obama’s decision. He used the element of surprise, which always adds to the meaningfulness of a reward. The gratitude he displayed toward his staff was publicly displayed, (naturally anything involving either Obama or McCain’s campaign is under media and public scrutiny). In some ways he also contributed to boosting the economy slightly by giving his employees a little bit of extra cash while they seek new jobs. In addition, Obama cemented his staff’s loyalty by giving them just one more reason to align with him as many of them seek jobs in the new administration, in public offices across the nation, or just as his supporters when the next election season rolls around.

Three Cheers

There are things worse than standing up in front of a group of people and speaking, but as far as I’m concerned, most of them involve bleeding.

Perhaps I exaggerate, but handing out Incentive’s 14th annual Sales Excellence Awards at the IMRA Marketing Conference in San Diego Tuesday night was a little more enjoyable than usual, and not because I was in San Diego (it was cold).

It was because I got to say a very public thank you to someone who has made my life, and if you’re in the incentive industry in any way, probably your life, a lot easier. And despite the fact that we had six Waterford crystal vases onstage for a ceremony with only five awards— and the fact that she was the one who set those awards out—she had no idea it was coming.

The sixth one went to Kate Marie, who formally became the executive director of IMRA at the show, removing the “IT” after her title that stood for “in training.” Anyone who has dealt with IMA, or with IMRA, or any of the other IMA special interest groups, knows that Kate is a phenomenon and we’re all lucky to have her.

As a journalist with 15 years of experience, I’ve dealt with many, many people who do roughly what Kate does for thousands of groups, corporations and government agencies, and I say unequivocally she’s one of the best.

Three Cheers

There are things worse than standing up in front of a group of people and speaking, but as far as I’m concerned, most of them involve bleeding.

Perhaps I exaggerate, but handing out Incentive’s 14th annual Sales Excellence Awards at the IMRA Marketing Conference in San Diego Tuesday night was a little more enjoyable than usual, and not because I was in San Diego (it was cold).

It was because I got to say a very public thank you to someone who has made my life, and if you’re in the incentive industry in any way, probably your life, a lot easier. And despite the fact that we had six Waterford crystal vases onstage for a ceremony with only five awards— and the fact that she was the one who set those awards out—she had no idea it was coming.

The sixth one went to Kate Marie, who formally became the executive director of IMRA at the show, removing the “IT” after her title that stood for “in training.” Anyone who has dealt with IMA, or with IMRA, or any of the other IMA special interest groups, knows that Kate is a phenomenon and we’re all lucky to have her.

As a journalist with 15 years of experience, I’ve dealt with many, many people who do roughly what Kate does for thousands of groups, corporations and government agencies, and I say unequivocally she’s one of the best.

Talking About Talk

At this year's IMRA conference, getting the word out about incentives was a recurring theme. It could be because this was my first time at the conference that translating the message of incentives for the uninitiated stood out for me. But even so, it seemed to be on the minds of many. During Sunday's "Orientation to the Industry", IMRA's outgoing President, Gary Slavonic said simply "If the CEO doesn't know why I'm there, I'm out of there." That notion got a response from the audience, some of who were new to their positions and were learning to define their role, sometimes in contrast to retail suppliers or other areas of merchandise sales.

A similar note was sounded by Rick Blabolil, president of Marketing Innovators International during the "State of the Industry" roundtable. Talking about reaching out to new customers, he urged suppliers and reps to speak in the clients' terms, not the industry's. Attendees might know what you mean in talking about "SKUs" or can tell the difference between a "jobber" and a "distributor" (I'm still unclear on the distinction), but using such jargon might just alienate industry outsiders.

So industry members must distinguish ourselves as different from other types of merchandise suppliers, but in terms that are not too different.

And all the talk about talk is being put into action. IMRA's incoming President, Joe Gabler announced on the conference's final day that an Education Committee and a Technology and Publications Committee had been created to spread the word about the use and benefits of incentive merchandise both within the industry and to all those outsiders still unsure what incentives are all about.

Reader Speaks to Incentive Article

I just now read the recent article posted to Incentivemag.com on the meeting held in November in New York.

Couple of thoughts came to me as I read the article:

First - I was bummed I couldn't be there for the discussion - as you probably already have surmised - I have an opinion.  Heck- unfortunately for those around me - I have more than one.

Second - I thought that the 'unification' thing is right on - but for reasons other than what I think the attendees probably are considering.  I recognize that there are a multitude of reasons for concern in our industry, but at the core is the fact that we haven't grown up.  We have a 'failure to launch' so to speak and continue to socialize and work with the members of the value chain that worked 20 years ago.  We don't regularly connect with the members of the value chain that is developing and will be in place in the future. 

We're trying to solve a future problem with historical points of view.  As Einstein said - 'You can never solve a problem on the level on which it was created.'

I have been in this industry for 20+ years and have seen us go from 'bobby socks to stockings' as the song goes - but never commit to one or the other.  We, as an industry, want to keep our cake and eat it too - we want to be solutions providers AND hawk merchandise and trips.

The fact that the meeting attendees comprised both 'performance improvement' companies and merchandise suppliers strikes to the heart of the disconnect.  These are two completely different businesses and points of view, yet we continue to put them into a mash-up and wonder why we can't seem to get anything done.  The goals of the attendees are not in alignment.

An analogy might be UPS as a logistics supplier and a truck manufacturer/retailer.  UPS helps companies determine the optimized way to transfer 'atoms' - packages and then provides the services to accomplish that in an outsourcing model - but they don't sell trucks.  You can't sell a logistics solution that has any validity if the business model for the provider only works if the client buys brown trucks.

If you got UPS in a room with Freightliner you wouldn't be able to get to a conclusion on the direction of their industry either.  Because they are in two different industries.

A point of view that I have held for a while is this:  as technology and traditional global communication barriers have decreased the work (or friction) required to connect the solution provider to the fulfillment provider has decreased.  When friction in an economic value chain decreases, cost and ultimately profit, decreases.  I think we’re seeing this in the travel, merchandise and debit card space. 

Let me elaborate.

Ages ago, incentive companies were the pre-eminent travel resource.  As an industry we were one of the few industries that had relationships and knowledge of foreign countries.  We provided a safe way to experience the world.  However, as information about countries was more available, and the infrastructure in foreign countries grew to support non-natives, the need for someone with an understanding of the 'world' diminished.  The fact that I can connect electronically with hotels and DMCs and book airline tickets with any airline in the world through common interface has reduced the friction that used to exist in foreign travel - and therefore, the 'value' we bring.  This in turn reduces the margin we can charge.  This not only applies in foreign travel, but it is easier to book and manage travel domestically as well.

Whether it is truly easier than it used to be is irrelevant - the client’s impression is that it is, and they know it is less risky and therefore they shouldn’t have to pay additional fees.

Same holds true for the merchandise area of our business.  Decades ago, incentive suppliers were one of the few true catalogers - and we had to have warehouses and the infrastructure to support the service and delivery of 'awards.'  The supply chain of that era didn’t cater to award earners.  As the logistics systems improved over the years it became less of an issue to have control over that end of the business and therefore, the client’s need for a dedicated supplier of merchandise within an incentive program disappeared.  Along with the margins. 

As your article points out - incentive companies buy less than the average Best Buy in an big city.  We're not going to provide much value when that is our starting point for negotiation.  Yet we still cling to this idea that we can buy better and deliver better than a dedicated resource.  And with the increase in pricing transparency in the marketplace there is no way to 'hide margin.'  It was inevitable that Amazon.com would jump in.

And debit cards are similar - with companies that focus exclusively on the cost effective delivery of these awards, constantly honing their operational expertise, prices fall as do margins.

We're stuck.

What we need to do is find those partners in the value chain that represent our future.  Until then, we will continue to have this disconnect and lack of focus on true solutions.

We need to talk to compensation management companies, enterprise incentive management companies, software companies, etc.  They hold the true value for us - and that value is - connecting the information to the objectives.  Once that is accomplished we then can connect to the appropriate end supplier.  It’s not that the industry doesn’t need travel and merchandise support networks – of course we do.  I know, and research has proved, that non-cash awards and the group recognition experience travel provides – are powerful motivators when applied in the appropriate way.

However, if we can't make money on the thinking and design of the program - and we're not willing to let go of the 'volume' part our business model (awards) we're going to continue to try to straddle an ever-widening gulf until we fall in.

As an industry we need to accept the fact that our value chain has changed and begin developing the new value chain that allows us to continue to help companies drive results and provides us a fair return for our efforts.

But… As Dennis Miller is fond of saying - 'Hey, that's my opinion, but I could be wrong.'

Regards,

Paul Hebert
Executive Director
Excellence In Motivation, Inc.
Reputo Profundus   Reputo Ocius   Reputo Diversus

Cleaner Air at Disney

The latest hotel company to go smoke-free is the Walt Disney World Resort, which announced today that all its accommodations-21 hotel and resorts in total, including the Grand Floridian Resort, pictured—will ban smoking as of June 1.  The new policy applies to all guestrooms, patios and balconies.  Each property, however, will have designated smoking areas available. “We continually make adjustments to our operations based on guest demand,” said Senior Vice President for Walt Disney Parks and Resorts, George Aguel. “Our convention centers and common areas have been smoke-free since 2001.  Since that time we’ve seen a dramatic increase in the number of meeting attendees requesting non-smoking rooms.” Smoking is currently prohibited in all resort lobbies, restaurants and convention centers, and has been absent since January 2000 at all Walt Disney World Resort theme parks and water parks, except for designated smoking areas.

What Is This Thing Called Loyalty?

As revealed in a recent story titled "Loyalty Isn't Dead, Employers Just Have to Earn It", by Fortune columnist Anne Fisher, aka Ask Annie, approximately 85% of readers asked the question “Is loyalty dead?” responded emphatically that it is very much alive…only different. 

The majority of respondents quoted in Fisher’s article suggest that loyalty today is not about the number of years an employee works for a company, but rather the level of work and commitment an employee brings to a job while she’s there.

Working hard for your employer, promoting the company even when you’re not at work, bringing self-respect to your job, are all prominent examples of how respondents quoted defined what loyalty is all about today.  Wrote one civil engineer:

“…I’m loyal if I do good work and leave them in a good situation. Someone who works 20 years somewhere while stealing pens and playing solitaire isn’t loyal at all.”

As convincing as that argument might be, other respodents simply would not stand for any new take on loyalty that discounts a long-term commitment through thick and thin. Such was the indignation expressed by this Chicago businessman on Fisher’s blog:

"I think people are setting a pathetically low bar by saying that they are loyal while they are at the company, but think nothing of leaving that company for a higher salary or better position. While it is perfectly easy to be loyal when things are going great, it's only when things are tough that the word loyalty has any real meaning.

No I am not saying that employees should always stick it out when things are tough, because an employer-employee relationship is a two-way street that has to work for both parties. Just don't confuse loyalty (sticking by someone through thick and thin) with meeting the expectations of your job (work hard, speak well of the company, etc.).

A sports analogy is changing your favorite team every week to whoever is winning - as long as you are an advocate for them and speak well of them and watch all the games, then you are being loyal!-Doug, Chicago, IL "

However, keeping with the sports analogy, if you look at professional athletes, you’ll see that the same kind of turnover exists on the playing field as in the corporate world. Kobe Bryant recently turned down an offer to play on the NY Knicks, not out of “loyalty” to the Lakers, but because the Knicks couldn’t offer him a competitive salary (see NY Times, "The Interest Was There, but Not the Money"). On the flipside, back in 2005, Johnny Damon— someone who didn’t even want to shave while he played on the Boston Red Sox in a form of protest against the contractual clean-shaveness of the New York Yankees—gave up his scruff and his Bean Town loyalty when presented with a multi-million Big Apple offer he just couldn’t refuse.

So what is loyalty? Whatever it is, incentives help. Consider an additional quote from Fisher’s column:

“Career-wise I know I’ve been at my current job too long. But I stay because, even when the workload is heavy and budgets get tight, my boss is careful to involve, encourage and reward me…the day I quit getting that is the day I dust off my resume.”
20-something, Dana

Another reader quoted in the Fortune article wrote that depending on what a company is willing to do for its employees, loyalty exists. He rejected a job offer that included a 30 percent salary hike, because he didn’t want to give up the flexibility that his current job allowed him.

Bottom line, like the column says, loyalty doesn’t come easy. And if you’re looking for the kind of loyalty that lasts a decade, it doesn’t come cheap, just ask George Steinbrenner. 

Up In Smoke

In June, Incentive published a story about a policy Ohio-based lawn care company Scotts was implementing in October banning smokers from their employee ranks, even those who only smoke when off duty. The rule is intended to reduce health care costs, but has come to represent a sort of lightning rod for privacy advocates who think the policy constitutes an invasion of privacy. It looks like that line will be drawn in court; on November 29th, a Massachusetts man who was fired from Scott's after testing positive for nicotine during a drug test filed a suit against his former employer.

However the case is settled, it should prove a landmark for companies interested in being more proactive about reducing their heath care costs. Interestingly, the case may boil down to the way the policy was implemented. When I spoke with a Scott's respresentative about the rule, he said part of the plan was to make every effort to offer employees support toward quitting their habit, with termination only a measure of last resort for employees who resist changing their behavior. But the plaintiff in this case claims he was trying to quit, and that the company had offered no support.

Here you run into an issue that a lot of companies face when rolling out a new or adjusted rewards or benefits plan. The policy that may have been painstakingly planned out in a boardroom at headquarters may fall apart if it only arrives in pieces at outlying offices. If your message is inconsistant, the least that will happen is that your employees will view your efforts as unfair and hypocritical, the worst is that it will lead to lawsuits and bad press.

New Meetings Search Resource

Conworld.net, a global meetings information portal, announced today that it has utilized Google's search technology to offer a new research option for anyone looking for information related to meetings—www.conworld.net/Google. A quick test of the search engine secured results from leading association and trade media resources directly related to industry issues of interest, be it attrition, procurement or incentives.

The site also provides directories to more than 35,000 meetings-related Web sites around the world, DMCs, industry event listings, industry news resources, and current and archived Conworld.net newsletters.

Thursday Rewards Links

• The Society for Human Resource Management published an article in its November issue of HR Magazine that shows higher HR salaries are tied to a need for more specialized skills that include designing effective rewards programs for increasingly diverse groups of employees.

• Is employee motivation a magic formula? Oak Brook, Illinois’ Business Ledger seems to have found the man with the magic touch—a magician who presents motivational shows tailored to the particulars of each company for which he works.

• When it comes to tight budgets that may not allow for big bonuses and employee rewards, honesty is the best policy, says an Associated Press article in the Chicago Tribune.

• A writer from The Manufacturer explores what it takes to breed a functional workplace culture, satisfied employees and why each employee is linked to the success of a company.