Points mean prizes: the benefits of points-based motivation schemes

If you’re a fan of points-based retail schemes like Nectar, you might like to try something similar to motivate your staff. Motivation schemes that allow employees to build up points towards a cash value offer a more sophisticated means of incentivising a workforce.

Their premise is simple. Rather than an employee being rewarded with a voucher, they are given a card on which they accrue points that can be used to buy a certain product depending on the points accrued.

In this respect, they are very similar to consumer points-based schemes such as Nectar, which runs across retailers including Sainsbury’s and Homebase.

“They’re relatively new, but are likely to grow in popularity,” says UKGCVA director general Andrew Johnson.

“It’s the fastest growing area,” says Martin Cooper from Love2reward. “Points-based schemes bring a longer-term dimension to the traditional voucher system, so that employees can save up towards a target that might have been out of their reach with a traditional voucher scheme, for example a new watch.

“That obviously means the employee has a positive association from the scheme.”

Streamlining schemes using point systems

Another advantage is that points-based reward schemes can be used to join up several disparate schemes.

That was part of the thinking of Fortis Insurance Solutions, when it launched an online rewards programme from Love2reward in May 2008.

Andy Woodbridge, management development coach, explains: “We wanted to streamline our reward strategy and ease administration of a previously cumbersome process. Prior to that, any team manager who wanted to make an award had to physically purchase the product and reclaim the cost on their expenses.”

“We used to have long-service awards, and employee of the month awards, but across disparate departments. The points system brings all that together.

“We’re a large-scale call centre, so wanted to maintain motivation, and offer some public recognition of top performers. We also wanted an efficient administrative system, and wanted more central control over our reward generally, so we could report, and analyse how the scheme was being used.”

Love2reward tailored its VIP online platform so that, to the user, the site appears as a Fortis-branded product. The platform comes as a complete package – an online points banking system showing all 2,000 different rewards available – and is administered by Fortis. Rewards range from the high street gift voucher to travel schemes, experience days, wine and flowers.

Woodbridge did an employee survey before deciding on the Love2reward system. “We found that flexibility was key, not just multi-retailer, but also the ability to have spa weekends, as well as buying from your local department store,” he says.

With a unique login and password, employees can access their points bank at any time, browse the online rewards and spend their points with the reward being delivered directly to their home. Additionally, every month the intranet features the employee of the month and all staff can see who has been awarded points so the reward is acknowledged publicly.

The scheme has now grown into a more intelligent and complex reward structure. “Each team manager will have different KPIs and can set their own team reward criteria, whether it’s to encourage sales conversions, reward administrative turnaround or just to say thank you for a job well done,” says Woodbridge.

So far, 51% of Fortis’s 330 staff have been awarded points, 37% of whom have spent them already, with the remaining 63% saving points to redeem against bigger value items.

Woodbridge can point to tangible improvements in employee motivation since launching the scheme. In the annual employee survey, there was a 13% improvement in employee satisfaction from 2008 to 2009. Attrition dropped by 6% in each of last two years, while absence levels are running at just 1%, a record low.

“Recruitment costs have dropped off, with staff getting points through a ‘recommending a friend’ scheme, which is how 50% of new recruits have joined Fortis in the in the last six to eight weeks,” adds Woodbridge, who describes the scheme as “extremely successful”.

However, Cooper warns that companies considering a points-based scheme should expect a bit more administration. “You have to work out what the points system is, and then run that, so the costs of implementation may be a bit higher.”





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