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THE POWER OF TANGIBLE MERCHANDISE AWARDS
A Vice President relates a simple example of the power of tangible merchandise awards in his company-sponsored incentive program:
A teller at a local bank told me that a woman came in and proudly modeled for both customers and employees a jacket she had won.
She said, My employer gave me this for doing a good job. Its the first time in the 18 years Ive worked there that theyve recognized the things I do every day
During those years she had earned $230,000 in wages, which had paid for cars, a home mortgage, food, vacations, college education and other essentials.
The money was not recognition of her work, but the jacket was.
-Daniel C. Boyle, Vice President
Diamond Fiber Products, Inc
Harvard Business Review
Recognition
WHAT A WELL-DESIGNED EMPLOYEE RECOGNITION PROGRAM CAN DO FOR YOU!
Its a fact: Keeping your employees motivated and happy can produce measurable bottom-line benefits. Research shows that an employee recognition program can help a business prosper in three distinct ways:
- By helping companies make more money
- By keeping employees engaged in their work
- By improving employee performance.
FINANCIAL PAYBACK
Its clear from studies such as those cited below that an employee recognition program can have a direct effect on the financial performance of a company.
In Study #1, employee-focused organizations increased their revenue 483% over competitors that were strictly bottom-line focused.
In Study #2, companies that rewarded their employees made more money over a five-year time period than companies that did not.
KEEPS EMPLOYEES ENGAGED
Want your employees to feel more ownership in your organization? Then make sure they know theyre valued! Recognizing an employee for a job well done reinforces what is important to your company, and provides feedback that helps employees know what behavior(s) to repeat in the future.
Workplaces that practice employee recognition are characterized by:
- 50% lower turnover
- 56% higher than average customer loyalty
- 38% above-average productivity
- 27% higher profitability [Source: Jeffrey Pfeffer, Stanford School of Business]
IMPROVES EMPLOYEE PERFORMANCE
Recognition also increases employee performance. When employees feel appreciated for their contributions, they are more likely to repeat positive behaviors, leading to higher productivity and results. According to Jeffrey Pfeffer, Stanford School of Business, studies show that thirty percent of employees improve performance after being criticized; 90% of employees improve performance after being praised.
WHAT IS RECOGNITION?
Recognition is an after-the-fact display of appreciation or acknowledgement of an individual or teams desired behavior, effort, or business result that supports the organizations goals and values.
[Source: National Association for Employee Recognition]
STRUCTURE IS CRITICAL!
Recognition is more than simply throwing a party, giving an employee a gift, or saying thank you. It is an acknowledgement that intentionally links employee behavior to corporate goals!
A good recognition program includes rewards, awards, incentives, and celebrations.
- Reward: An item given to an individual or team for meeting a pre-determined goal (sometimes cash-based).
- Award: An item given to an individual or team to commemorate a specified achievement (typically non-cash).
- Incentive: A contingent reward based on achievement of pre-determined performance results within a specific time period.
- Celebration: A planned or spontaneous event in recognition of individual or team achievement.
- From unique plaques and recognition piecesto the latest, most popular incentive awardswe offer everything you need for an effective employee recognition program. Let us help you set up a program that rewards your employees for their contributions and achievements, promoting increased productivity and profitabilityand supporting your organizations goals and values!
BOTTOM-LINE BENEFITS OF EMPLOYEE RECOGNITION
A recent study concludes, Satisfied employees create satisfied customers, which improves the financial performance of the entire organization.
[Source: Forum for People Performance Management, Northwestern University]
THE VALUE OF POSITIVE FEEDBACK
30% of employees improve performance after being criticized; 90% of employees improve performance after being praised.
[Source: Jeffrey Pfeffer, Stanford School of Business]
Sales Incentives
WANT TO INCREASE SALES PERFORMANCE?
A well-designed incentive program will produce measurable results!
Incentives, also known as performance improvement programs, can be an effective tactic for increasing sales and/or profits by influencing participant behavior. When structured properly, an incentive program can help you
- Increase sales
- Improve product mix
- Gain market share
- Generate leads
- Close new accounts
- Support product launches
- Reinforce product training/education
- Achieve any measurable goal!
In effect, an incentive program tells your participants, You give me extra effort; Ill give you extra reward. And it worksdriving behavior change through positive reinforcement and enabling quick shifts in performance to improve your bottom line. In most cases, the target audience for incentives should be your mid-range performers. Typically, this group makes up the biggest segment of your sales force and can have the most impact on your overall objectives. Usually, a company has:
- 5-7% Top Performers
- 80-90% Mid-Range Performers
- 5-7% Poor Performers (short-term)
WHY INCENTIVES?
- They work! When structured properly, an incentive program can provide a sound, measurable ROI.
- You only pay on performance.
- It adds fun and variety to the workplace.
INCENTIVE FACT:
If the activity can be measuredthe activity can be improved!
CHOOSING INCENTIVE AWARDS
When asked, most people say they prefer cash over non-cash awards (merchandise and travel). Yet, there is hard evidence that non-cash awards are a better motivator (see case studies below).
And dont assume that what motivates you will motivate others. The best programs offer a wide range of award choices, so participants can work toward items that excite them individually. An online or printed awards catalog or brochure works well for this purpose:
- Must be top quality, name-brand awards
- Should have a mix of merchandise and individual travel options
- Must have a wide range of values
- Must be competitively priced
- Award fulfillment must be world-class
CASH AWARDS COST MORE
The American Compensation Association surveyed 1,600 companies for a White House conference on productivity. Findings included:
- Non-cash awards offered a 3:1 return on investment when compared to cash.
- Each dollar of increased performance cost about 4 in non-cash awards and 12in cash awards.
- Successful non-cash programs cost 3-5% of an employees annual compensation, while successful cash programs had to equal 5-15% to be effective.
ADVANTAGES OF MERCHANDISE/TRAVEL AWARDS VS. CASH
- Easily promoted
- Provides trophy value (permanent symbol of success)
- Promotes goal setting
- Offers a wide range of choices for maximum motivation
- Is not confused with normal compensation/does not get lost in the mainstream of daily bill paying
- Instills family involvement and support
CASE STUDYGULF OIL
Program performance, based on varying levels of cash and non-cash payouts:
INSERT GRAPHIC HERE from Slide 43(?)
Three principal findings: (1) Any incentives are likely to produce some results; (2) Doubling the value of merchandise awards does not automatically double incremental performance; (3) Cash does workbut it can take up to six times as much to do the job of non-cash incentives.
CASE STUDYMAZDA
Three-month test on truck sales (two test groups, each made up of 32 districts; one group offered cash, the other offered non-cash incentive).
INSERT GRAPHIC HERE from Slide 47(?)
Three principal findings: (1) Any incentives are likely to produce some results; (2) Doubling the value of merchandise awards does not automatically double incremental performance; (3) Cash does workbut it can take up to six times as much to do the job of non-cash incentives.
Key results: (1) Non-cash districts @ 115.7% of goal (cash districts @102.1%); (2) 21 of 32 non-cash districts exceeded goal (cash districts 15 of 32); (3) All sizes of dealerships in non-cash groups out-performed cash group.
ACHIEVE SIMILAR RESULTS
Let us help YOU achieve similar results, with an incentive program aimed at your specific objectives. Our services include program development, awards, communications, administration, and ROI analysisfor total turn-key support!
- JUST REWARDS
- WISH REWARDS
- POWER TO MOTIVATE
- VR REWARD CARDS
Employee Motivation

WHY INCENTIVE-BASED EMPLOYEE PROGRAMS WORK
Returns Far Exceed Costs!
Employee turnoverlost time due to accidentsunscheduled absenteeism. Personnel issues like these can be costly to your business. How do you protect your bottom line?
The answer is: MOTIVATION.
A well-designed incentive program can change employee attitudes and behavior, and pay off measurably. Safety incentive programs are a good example. With workers comp costs ranging from 5%-35% of an employees wages in some industries, many companies are investing in programs that address accident prevention. By motivating employees to think and perform proactively, identifying and correcting unsafe actions or conditions, such programs often pay for themselves in a very short period. The most effective programs are strong on communication (making employees understand how even the smallest infraction can have enormous repercussions) as well as rewards (giving everyone a stake in the process).
Its a fact that safety incentives pay off. Some employees10 to 20%will always have the work ethic to perform beyond expectations. But many others are satisfied with average output, and for those 80 to 90%, incentives work to spur safety efforts that can significantly decrease lost time due to accidents and increase your profitability.
Find out why more and more companies view incentive-based safety programs as an investment rather than an expense. We can help design a program thats right for you!
JUSTIFYING COSTS
A large self-insured company reports savings of several million dollars annually while utilizing a safety incentive programsimilarly, a company with less than 200 employees saves $83,000 on their annual workers' comp premium. Youll find that a strong, well-run safety incentive program is one of the best investments you can make in your businessespecially if youre in an industry at high risk for accidents!
WHAT WORKS BETTER, CASH OR NON-CASH INCENTIVES?
COST EFFECTIVE? A recent study by GULF OIL concluded that it takes up to six times as much cash to do the same job as non-cash awards in a safety incentive program.
SUSTAINABLE? In a separate study, GE concluded that the trophy value for cash lasted less than three weeks. Ultimately, cash becomes another entitlement with little, if any, connection to safe behavior.
BEST PRACTICES
- Avoid cash awards. Structure your program according to your companys long-term best interestsconsidering what will have the most sustainable impact on your safety culture.
- Choose awards with popular appeal and strong trophy value.
- Work with an incentive program expert you can trust!
THE HIGH COST OF EMPLOYEE TURNOVER
Incentive-based programs aimed at reducing employee turnover also offer big payback. Current estimates put the cost of replacing a well-trained employee at 150% of annual compensation. That means to replace a $30,000/year employee, your cost is $45,000 per turnover!
Using that average figure, see how the annual costs add up:
| Company Size | Rate of Turnover | Annual Cost of Turnover |
| 40 employees | 10% | $180,000 |
| 100 employees | 10% | $450,000 |
| 1,000 employees | 10% | $4,500,000 |
Who wouldnt want to add tremendous numbers like these to their profit line? *Source: Cost of Employee Turnover (www.isquare.com)

CAN YOU AFFORD TO IGNORE NUMBERS LIKE THESE?
The cost of unscheduled employee absenteeism can have a huge impact on a companys bottom line. Yet, because its seldom tracked, its a cost that often goes unnoticed. Consider:
- The cost of unscheduled absenteeism to American businesses is estimated to be $600 per year per employee.
- The annual cost can range from $60,000 for small employers to over $1,000,000 for large companies. Source: Commercial Clearing House Absence Survey 2007 (www.cch.com)
Variable Ratio Reward Cards
A new and very exciting non-cash incentive tool that you can use to motivate your employees & sales channel to increased performance.
We have both printed cards and electronic cards available. Please go to the website below to play a card (it takes about a minute and its fun!)
Some of your benefits in using VR Cards as the awards media in your incentive programs are:
- You will get Better Program Results (the cards utilize the most powerful motivator....variable ratio reinforcement).
- Extremely MotivationalThe "Grand Prize" award (in this case a trip to Hawaii for two) is on every card at a fixed cost to you (i.e. $25). You have no risk of going over budget because of too many jackpots.
- Every card is a winner. No losers.
- Fits any Program Budget (we can build cards from $1.00 to $100.00)
- Budget Enhancer (you can offer much more valuable awards with the same budget due to jackpots on every card).
- We use only Top Quality, Name-Brand Awards
- Something Different (a new and exciting way to motivate your audience)
- Simple, fast, powerful, easy to administer and Fun
http://demo.vrwebcard.com
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