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Are tangible rewards best?

In many call centres there comes a time when managers are required to face up to the whole issue of whether or not to use merchandise and other tangible rewards to motivate phone agents.

There is no simple answer to this dilemma.

When a participant is deciding whether an award is “worth the effort,” the participant is considering the perceived value of earning the award. It’s a case of evaluating the match-up between the value of the award itself, and the effort required to earn it.

Insights into this decision-making process come from expectancy theories, which hold that effort exerted in pursuit of a reward is positively related to the value of the reward offered for performance. This dynamic is known as the expected utility of the award.

In addition, several principles of social and cognitive psychology suggest that participants may perceive non-monetary incentives to be more valuable than the retail value of that award in cash. For example, acknowledgement from peers and other dynamics can extend the value of non-cash incentives over and above the cash value of the incentive. This has been referred to frequently as trophy value.

As with motivating anyone, to know what best motivates call centre staff, it is usually best to understand them.  

 Are tangible rewards best? In some situations, someone on a lower income might have more basic needs and might prefer cash. But established agents earning higher incomes might prefer something with trophy value that enhances their self-esteem.

There seem to be countless incentive programs that feature highly desirable and attainable merchandise as rewards. The general theory is that these reward items are memorable and reinforce the relationship between the reward earner and the company (the reward provider).

In a very real sense, people feel that appropriate merchandise keeps on giving. In other words, each time a merchandise reward is viewed or noticed, the recipient tends to relive the special recognition and appreciate the organisation responsible.

In general, non cash rewards usually motivate individuals to higher levels of performance because they:

  • Provide a tangible symbol of achievement;
  • Provide something physical to show off;
  • Are socially acceptable to "brag" about; and
  • Provide a lasting reminder of achievement.

Cash rewards on the other hand, often have fleeting impact and more often than not, leave the recipient's mind as soon as they are spent.

Cash - unfortunately for those companies that attempt to motivate with it - is the least lasting type of reward, because it's typically confused with other compensation and therefore forgotten. That’s the typical view of most call centre managers. However, this is not a question that’s always 100% clear.

Against the popular faith in non-cash rewards, in July 2005, the US research, consulting and publishing firm, Best Practices, LLC, released the findings of a study that they carried out.

The conclusion from the study was that when rewarding or recognising contact centre employees, cash is king.

Two of the key findings from the study were:

  • Over 90% of the benchmark class offer incentive pay-outs for sales or service goals, and nearly half of these companies offer cash rewards for both service and sales goals.
  • Companies that rated their incentive program highest in effectiveness rated cash incentives as the most efficient employee motivator.

Best Practices, LLC is a world-leader in the field of best practice benchmarking and so it is probably worth giving careful consideration to the findings of the study.

 

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