The How and Why of Call Center Employee Incentives

by Bob Cowen, Snowfly

 

Two words reveal the secret of successful employee incentive programs: feedback and reinforcement.

As a child and young adult you learned that continuous feedback guided you in your pursuit of learning. You received regular grades for homework, tests, reports and the dreaded final exams, thus conditioning you to expect continuous feedback. Once out of school and into the workplace, continuous feedback abruptly stopped and changed to quarterly goals, MBOs and annual reviews.

Now you’re a manager; you need to motivate and incentivize your team to improve a myriad of Key Performance Indicators (KPIs) that could make or break your career and company. How do you do it or improve what you’re already doing?
 

1.  Continuous Positive Feedback

You and your team were conditioned for continuous positive feedback through your educational processes; feedback is craved because it’s emotionally rewarding. Just because you’re out of school doesn’t mean that this kind of feedback is no longer a powerful motivator to you or your staff. In fact, look at the continuous positive feedback received by those who play games either on-line or with a specialized gaming system such as Xbox or Wii. They generate and receive positive feedback multiple times per minute—talk about "continuous," wow!

Because anything that provides positive feedback will be repeated, it’s no surprise that employee incentive programs running longer than six months produce nearly twice the results of shorter duration programs. Successful incentive programs do not have an end-date, although they should be frequently evaluated and updated.

Therefore, we suggest you use "continuous positive feedback." It’s the emotion that gets activities started. Take large activities and break them down into their smallest measurable components. Then, reward those activities continuously, as they occur. Doing so will capitalize on the motivational affects that we’ve learned during the first twenty years (or so) of our lives. This may be laborious, but the bottom line results are well worth the effort. An added bonus is that morale follows performance.
 

2. Random Intermittent Reinforcement

Did you know that more than 85% of the revenue earned by Las Vegas comes from slot machines? Imagine if your HR department tasked you to write a job description for a slot machine operator. Here is what you might write "You will sit before a machine, drop a piece of metal into a slot and pull a lever over and over and over again. The wages are that you will slowly lose all of the money you brought to work."

The magic of Las Vegas is "random intermittent reinforcement." It’s one of the most powerful motivators in existence when you realize the amount of money that is taken TO Las Vegas and stays there.

I’m not suggesting that your incentive program include gambling. It’s a losing proposition and I do not recommend offering lottery tickets in an employee incentive program. However, you have witnessed the power of "random intermittent reinforcement" when you have a reward that depends on spin-the-wheel, take a ticket from a fish bowl or select a sealed envelope. This is the emotion that keeps activities going.

Random intermittent reinforcement should be utilized in every employee incentive program for every activity, not just at special times or for special events. Injecting a game with a random but controlled result in the reward process also gives additional reinforcement to the activity. Yes, your traditional top performers will remain the top earners. The primary benefit will be to improve those who are not at the top and to ensure that new-hires are successful and do not become discouraged.
 

Two Other Tenets for Effective Incentive Programs:

  1. Pay incentives immediately and separately from payroll. The more closely you tie the reward with the activity, the greater the reinforcement.
     
  2. Provide a choice of desirable rewards. Believe it or not, one third of incentive programs produce negative results. A sure-fire way to kill an incentive program is to offer merchandise that the employee sees as overpriced. While not overtly saying so, they ask why your company wasted the incentive reward they earned on something that could have been purchased on the Internet for 30% to 50% less.

    Our most recent survey of reward redemptions showed that 88% of the values of our clients' employee’s redemptions were to put funds onto a Visa or MasterCard debit card. Not surprisingly, many of the employees waited until October, November and December to spend the funds they had accumulated on their cards.


How Much Should you Spend on Incentives?

Whether your agents are inbound, outbound, blended, customer service or sales, we would all like to improve major contact center metrics. Yet we face the conundrum of spending too much or too little. When an incentive program is properly designed and administered, we have seen that KPIs can easily be improved by a minimum of 20% when spending two hours’ worth of labor cost per full-time employee (FTE) per month. We have also seen that spending more than 3% of payroll does not generate incremental effort.

Therefore, my rule of thumb (works with all currencies) is the "two hour" rule. If spending $12 per hour for labor, plan on spending around $24 per month for each FTE. To me, that’s an excellent ROI which most CFOs should heartily endorse.

Note about home agents: You lose the highly motivating power of being part of a team and the feeling of camaraderie. If you are using or considering using home agents, be extra diligent about following the advice above.
 
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