Most likely you did not attend the Recognition Professionals International (RPI) Annual Experience Conference that took place in Atlanta, Georgia in April this year.
If you did, you would have seen a display of the world’s largest array of programs, tools, and options for rewarding employee engagement, innovation, and performance.
A common theme during the conference focused on how to properly use rewards and tangible incentives to motivate employees to innovate.
The various options for rewarding employees broke down in the following categories:
- Merchandise
- Retail gift cards
- Credit and debit cards
- Special services (i.e. free employee laundry service for a month or year)
- Cash bonuses
- Paid time off
- Individual travel
- Group travel
- Unique experiences (i.e. flying in a vintage biplane)
- Meeting celebrities
- Financial awards and bonuses
- Innovation project profit or cost-reduction sharing plans
- Inclusion in company’s overall profit-sharing plan
- Job promotions
In addition to employee recognition, innovation should be encouraged with a combination of nonfinancial and financial rewards. Nonfinancial ones can involve greater autonomy, time off to work on special projects and additional developmental opportunities. Financial rewards include bonuses, pay increases and promotions. The bottom line is that nonfinancial and financial rewards serve to reinforce people focusing on innovation.
In last month’s Newsletter we examined no cost ways to effectively recognize people for innovation. This month we will consider ways to reward innovative behavior which involve a financial outlay.
Low-cost, Unique Ways to Reward Innovation
Informally rewarding people for their innovation efforts does not have to involve a significant financial expenditure.
For instance, you could keep a gift closet that has inexpensive women’s and men’s type items and when an employee comes up with a great innovative idea, let them choose something from the closet.
You can take an employee to lunch to say thank you for a great idea.
They could select something from a merchandise catalog or you could give them a gift card.
You could try to make your employee’s personal or family life easier. For instance, having fully prepared meals delivered to the employee’s home or providing a laundry service are inexpensive ways to reward innovation.
A crucial opportunity that many organizations miss in rewarding innovation is to involve the family in the reward. When the employee’s spouse and/or children receive a benefit from the reward, they will ask why the person is getting the reward, which then requires the employee to talk about the innovation.
This reinforces sense of accomplishment within them and stokes the fire for them to come up with more innovations. For example, Effingham Health Systems uses family picnics to reward innovative actions.
Other low-cost innovation alternatives for rewarding innovation include:
- Throwing a pizza party for the employee and their co-workers
- Giving out a gas card
- Awarding the best parking spot to them
- Handing out lottery tickets
- Offering a unique experience (a behind the scene tour of a professional sporting event)
- Providing a day at a spa
- Furnishing a golf or sports outing
- Meeting a celebrity
Innovation Reward Point Programs
However, you need to be cautious in using informal, low-cost options for rewarding innovation.
The reason is that, all innovations are not equal. Therefore, you need a way of evaluating innovations so that you provide a greater reward for more impactful innovations.
One of the best ways to do this is with an innovation reward point program.
In an innovation reward program, participants earn “points” for taking specified actions such as submitting ideas, collaborating on challenges, achieving results, etc.
Points can also be awarded based upon the potential revenue generation or cost reduction of the innovation. Alternatively, how far the innovation progresses through the company’s innovation process determines how many points the person earns.
Participants then redeem points for the award of their choice.
Coupling the award program with annual or quarterly organization-wide celebrations, which are hosted by the CEO or Departmental head, enhance the entire innovation reward program. Getting their picture taken with the CEO and receiving a plaque for their achievement, further reinforces their interest in innovation and increases other employees’ desire to innovate.
It is important to note that recognizing, rewarding, and celebrating innovation should begin with employees’ job descriptions by including innovation as an expected activity. Performance objectives should stress the creative aspects of the position. Similarly, performance reviews need to include an evaluation of what innovation efforts the person has demonstrated and the results.
Examples of Rewarding Innovation
Information Builders, a Business Intelligence technology company uses an innovation awards program to encourage their personnel to create and deliver innovative, new sales presentations.
The program allows participants to earn up to 25,000 points that are redeemable from the company prize awards catalog. The prize awards catalog includes several thousand brand name merchandise items, short vacations, and special event choices. The innovations originating from the program have resulted in several million dollars of incremental revenue for Information Builders.
Eye-care-products company, Bausch and Lomb, uses financial rewards to encourage new product ideas. Personnel receive between $5 to $5,000 depending on how far the idea progresses through their stage-gate innovation process. At Air Products & Chemicals, innovations rewards, up to $100,000, are offered each year for commercialized ideas.
Major French glass and materials company, Saint Gobian, has taken a comprehensive approach to rewarding innovation. Idea submitters get points as their ideas move through each gate in the company’s Stage-Gate process. Greater amounts of points are awarded the further the idea progresses through the succeeding gates, and points can be redeemed for significant prizes, such as a TV or vacation travel.
Where to Start
To effectively incentivize your staff to innovate, decide what your financial and nonfinancial innovation reward programs will look like. Keep in mind that nonfinancial rewards can involve greater autonomy, time off to work on special projects or additional developmental opportunities. Financial rewards can include bonuses, prizes, and company-paid time off.
If you could use assistance with putting a program in place to effectively reward your employees for their innovations, please contact us using the information below so we can be a resource to you in this paramount area.
Fountainhead Consulting Group, Inc. is an Innovation and Business Planning firm. During the past 17 years, we have shown over 1,200 companies how to achieve their goals by using our unique, comprehensive, and systematic FastTrak Innovation Program™, Innovation Academy™, and Structure of Success™ methodologies. Using the components in these methodologies, each month we examine an aspect of how to transform your business or organization into a true 21st Century enterprise.
Office: (770) 642-4220
www.FountainheadConsultingGroup.com
George.Horrigan@FountainheadConsultingGroup.com
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