From Financial incentives can spur us to success—up to a point.

When the stakes get too high, performance can suffer, according to a new paper from researchers at California Institute of Technology. By studying brain-scan data of volunteers performing a basic motor task (controlling an object on a screen) for money, the Caltech team found that once the incentive for successfully completing the task hit a certain threshold, the brain's reward center began to shut down, a response tied to loss aversion.

READ THE REST OF THE SUMMARY FROM THE WSJ:

http://online.wsj.com/article/SB10001424052702304371504577406413713371208.html

We have found that paying around 1% to 1.5% of pay as incentives is the “Goldilocks” number and that paying 3% or more does not produce additional results.

This study shows what can happen when activities become learned and the incentive no longer is effective or participants become risk averse.  One easy way to re-engage your employees is to include “random intermittent reinforcement” (brief games of chance producing a random number of points) within an incentive program.

Summary of study: http://www.sciencedaily.com/releases/2012/05/120509140003.htm

Copies of the study can be purchased here: http://www.sciencedirect.com/science/article/pii/S0896627312002887

http://www.offcenterinsight.com/2/post/2012/05/contact-centerfold-of-the-month-may-2012-callogix.html

For those unfamiliar with the concept of “the power of small wins,” it is discussed in the Harvard Business Review article, “The Power of Small Wins” by Teresa M. Amabile and Steven J. Kramer.

READ THE ENTIRE ARTICLE AT CONNECTIONS MAGAZINE: http://www.connectionsmagazine.com/articles/2012/reduce-new-agent-turnover.html

Here’s a heartwarming story about the human spirit that you may find hard to believe. I promise you it is true!

I have seen many management fads come and go in my 40-year career as a human resource manager for PepsiCo and Texas Instruments and as a professor of management at Southern Methodist University and the University of Wyoming.  My corporate experience has always led me to question whether or not this or that “flavor of the month” can actually have a meaningful application in the real world, while my academic background has trained me to be skeptical of everything. Peer-to-peer recognition is one of the newer management trends I have been hearing about, and I admit to a dash of dubiousness.  Then something happened that rocked my world.

Read the complete article: HERE

By Tyler Mitchell, CEO: Snowfly Employee Incentives

There are several variables that have an affect the success (or failure) of your employee incentives programs. The types of rewards, budget allocation, and communication strategy are just a few. These are all very important; I could go in to detail on each and give my advice based on research as well as my own experience. However, that would make for a very long article and quite honestly, I am not a good enough writer to hold your attention. So that being said, I am going to focus on the most important variable, Average Positive Reinforcement Turnaround Time (henceforth referred to as “APRTT”).

APRTT is the employee incentive program’s average elapsed time from when an employee achieves a program goal (or demonstrates a positive behavior) to the time when the employee experiences a desirable outcome as the result. This is a significant determinant in the success of every incentive program. Your incentive program can be perfect in every other way, but the further your APRTT is from immediate, the less effective your program becomes.

Why? Because if an employee, or anyone for that matter, is immediately reinforced positively following a behavior, then that behavior will almost always be repeated. Conversely, the more time that elapses between the behavior and a positive outcome, the less likely it is to be repeated. Behavioral science has proven this to be true. Consider the research conclusions of Keri Kettle and Gerald Haubl with The University of Alberta. Their study involved students who, as part of a university course, had to give an oral presentation to their classmates. Group 1 was told they would receive their grade several days after their presentation. Group 2 was told they would receive their grade immediately. As you would suspect, group two (immediate feedback) achieved higher grades than their counterparts. This study shows that merely the anticipation of immediate reinforcement influences performance (Click HERE if you want to read the full study.)

So the question is how you can reduce your program’s APRTT. First, your employee incentive program needs to utilize some sort of reward currency (i.e. points that can be redeemed for a reward of the recipients choosing). The best thing about point-driven incentive programs is that receiving points for achieving a goal or demonstrating a behavior IS a desirable outcome on its own. From an administrative point of view, it is much easier to quickly communicate to a program participant that they have received points as opposed to trying to be Johnny-on-the-spot with some sort of prize or “attaboy” every single time an employee is deserving of positive reinforcement. This in turn enables you to reinforce employees more frequently which means you can reward them for incremental achievements towards a bigger objective.

Next, take your point-driven program to the next level. Today’s technology combined with your company’s performance tracking systems makes it possible to create a process that will automatically:

1. Receive raw performance related data
2. Analyze the raw data
3. Convert this raw data to points
4. Place points in an employee’s web-based account
5. Immediately notify the employee of points received via email or text messaging.

Developing and implementing a process like this can be very complex and will most likely require that you bring in outside resources. However the time and money you dedicate to this will undoubtedly result in a reduced APRTT for your workforce incentive program which will in turn result in quantifiable employee performance improvements and a reduction in administrative time.