Points Program

It is important for you to realize that you do not have to be an expert in designing incentive programs to actually implement one. To get started, answer these six basic questions. Gifts-To-Give professional rule development team will work together with you to make recommendations for your program structure and design.

1. Have you ever run an incentive program before? If yes, what type of program was it? What types of awards were used? Was it successful? What did you like? What didn't you like?

2. Clearly define the objectives of the incentive program. What are you trying to accomplish (employees working safer, salespeople selling more, improving employee attendance, etc.)? Focus on one or two objectives that are most important. The most successful incentive programs are built on clearly defined objectives.

3. Decide who should participate in the program. Whose level of performance are you trying to improve by running an incentive program (full-time employees, part- time employees, company salespeople, broker salespeople, etc.)? Can theparticipant's performance be measured individuals, teams, groups, offices?

4. Establish a time period. Determine how long the incentive program should be run. Sales incentive programs can operate as short as three months to as long as a year. Most safety incentive programs operate at least one year and can be extended to run an ongoing basis.

5. Determine what you can allocate (in terms of dollars) for meeting an objective, and how often performance is measured. For example, if you are trying to motivate your employees to work safely each month, then the objective is, to work each month without accidents. The budget question then is how much can you give back to the employee, each month, for working without an accident ($10?, $15?, $20?, etc.).

6. Set a schedule to provide ongoing feedback to keep participants apprised of their performance (daily, weekly, monthly). More frequent and consistent feedback will help reinforce desired behaviors.

Establishing Objectives for Incentive Programs

When designing a program remember the "R.A.M." Goal (Reasonable, Attainable, and Measurable). When developing rules for a program you need to decide what a participant has to do to receive an award. This sounds pretty basic, right? Actually, a great deal of thought should be spent on this important element of an incentive program. When creating goals for a program, they should always be: Reasonable (not excessive or too extreme), Attainable (the goal and awards are reachable based on time constraints, demographics, and other variable factors), Measurable (a means of tracking performance so points can be appropriately distributed). "If it's not Measurable it's not Manageable."

Every incentive program needs a system for translating a person's achievement into awards. Award points make for the easiest, fairest, and most common currency. Points allow you to conceal the actual merchandise costs and elevate the perceived value of the awards.

The norm in the incentive industry is one-half cent per point. The formula for conversion of dollars into points is as follows:

To convert $1.00 to a point amount, using the one-half cent (.005) point value is: $1.00 divided by .005 = 200 points.

If you allocated $1.00 every time a participant met a goal, it would not be very exciting to the participant to be awarded just that $ 1.00. On the other hand, if you were to allocate 200 points, that is more exciting (even though they are both the same amount, the perceived value of 200 points is much greater than that of $1.00).

You can use any point value you wish to convert dollars into points; just use the above formula.

Return to the Table of Contents