DA: According to our Merchandise FACTS Report survey, the average annual budget in merchandise awards is down $1,600 from 2003. Also, 46 percent of respondents spent under $50 in merchandise awards per recipient. How can we creatively work with these smaller budgets to offer attractive incentives?

Eglitis: We have been able to identify a number of additions to our product line that speak to the portable audio market in general. Do we have an item at $50? No. We find that the programs we operate in are looking for a brand recognition that warrants expenditure more than that. We see it as just another category that we are able to enter, that we may not have been able to play in beforehand. It's giving us another avenue to secure that recognition, as well as the enjoyment and benefit for the client.

Boswell: I think companies are better at involving their employees than they were in the past. Companies choose awards for different reasons, programs for different reasons. Sometimes, employee input can be meaningful.

Haltigin: You have to understand your own internal customer because it does vary. A sales person is motivated in a different way from a service person or an administrative person. You really have to tailor the rewards.... Travel isn't always the right motivator. Someone in administration may say, 'We worked as a team; reward as a team. We don't want these highfalutin trips. But recognize us for what we do with merchandise or an event of some kind that is meaningful.' It goes a long way to employee satisfaction.

Eglitis: There is one more component, and that's the way the employee is motivated day in and day out at work. It's wonderful to offer rewards for outstanding performance. But at the end of the day-the trip, the night out-they have to come back and feel that their input is recognized for their day-to-day [contributions].

Murphy: I'll validate that. The balance between recognition and reward is adjusting slightly within the context of the budget. What we are seeing is that some of the expenditure is moving over to recognition. Recognition by the organization is really fundamental.

Godi: I think that the shift in the budget has been reflected in a more strategic selection of merchandise-merchandise that impacts the marketing messages and the branding strategy that organizations have. It's much more critical that the selection be tied to and further those objectives than it ever has been in the past.

Tint: From a hotel perspective, what we are seeing as a trend is the buzzword: 'acknowledgement.' When we talk to people about bringing an incentive program to this hotel, it's about how to best acknowledge these people because in the word 'acknowledgement' is probably where the most profit lives. The more you acknowledge every person within a segment of the company, the more they are going to give. There is a direct correlation. Our stand is: let's go ahead and see what is means to acknowledge a group on property. How can we treat our guests in such a way that all they do is cocktail-talk about us? Any time someone starts bragging, that's going to incent that person to perform even better.

Boswell: Organizations are thinking about employee equity. How do we employ programs that reach all of our people? There's this notion of branding. You brand outside the company, but now we brand internally. You brand internally by first communicating the brand, and having your people learn the brand. Once they learn it, they start to live it.

Murphy: We are working with companies to help them develop an umbrella strategy for employees that links back to the employer brand and aligns with the brand promise they are making to their customers. This goes back to budgets, from shifting of dollars and realizing some efficiencies. But there is also a need to align some of the strategies around who the employer is and the brand that they want their employees to represent and recognize.

Lang: This is a tremendous opportunity for our industry as well. HR magazine talks about the 5 Rs: Responsibility, Relationships, Respect, Rewards and Recognition. If you don't have that, you're going to run into employee retention issues. People are talking about the 'Perfect Personnel Storm,' when the economy hits back and when Baby Boomers are going to retire. By 2010, there will be 10 million jobs that no one can fill. So employee retention is critical, that goes back to communication and treating employees properly, which leads to happy customers. We've had a lot of calls for pulling all these programs together under one Internet-based platform.

Murphy: We've seen training being hooked on. Years ago you had that merging of sales and marketing come together. There is a current trend of HR and marketing coming together. It's very collaborative.

Boswell: From a budget standpoint, I don't think organizations really understand what they are spending on incentive and recognition. One program is here, and another one is there. When they start to put their collective heads together, they realize what that budget looks like, and then they can strategically allocate the dollars.

DA: What categories of merchandise are gaining momentum?

Boswell: The key is lifestyle. It's important to think about the program and what the award wants to accomplish. From the service award side, I heard a story recently about a new CEO who had his 10-year service brochure and questioned, 'Where does the company logo go on this award?' When HR said, 'We don't use a company logo,' he responded, 'Well, you'll find a place to put the logo on my award.' I think strategically you have to think about the rewards that you give and what they represent. Recognition is about an experience, so often it's about the memory and the memorabilia. I remember a discussion about retirement awards and how those are changing. It used to be the grandfather clock or the watch at 25 years. Now people are saying, 'I want a camera, so I can use it when I retire.'

DA: What are the factors in deciding on whether or not to use a logo?

Boswell: You think strategically about a service award and what it represents. Companies make those decisions at their discretion. It ties back to your branding strategy. It is about the individual, but I want to make sure that companies benefit from these programs as well.

Eglitis: A company wants mileage on their investment. There are certain awards, rewards or gifts that inherently cause people to do the talking. 'Look what my company gave me.' In many cases, they don't want it marred with a logo. Again, it depends on what the item is, either the value of the item or the type of item.

Zanone: It does depend on the reward. There are alternatives. We won't put a logo on a Movado Laser Dial watch, but I will put case back engraving. It's really great because it doesn't blare. It says it back here, so I can still wear the watch and remember it. Then you get the guy who says 'My company gave me a gift check.' So the company loses all trophy value.

DA: How has the service award changed?

Markwart: Depending on the person again, if they are retiring or getting a reward, if it fits their lifestyle and it is something they really always wanted, it's something more personalized. We're seeing a lot more of that going around these days.

Boswell: It really depends on the budget. The one thing that I think is interesting from a trending perspective is why do people pick the awards that they do? It is always interesting the things that they wouldn't go out and buy themselves. Why do people pick binoculars or a globe? And once again it's about giving them choices. I've done a number of surveys over the years and I found 4-8 percent that aren't satisfied with the selection. I'm amazed they are dissatisfied because their companies actually recognize them.

Markwart: What's happened to those [service award] budgets? Have they gone down at all, considering most people don't stay with companies 30 years anymore?

Boswell: If they haven't been there this long they will be reallocated. During the dot-com, we saw one month, three-month, six-month rewards. They didn't even have a year award, because the company hasn't been around that long. Get them in the door, recognize them and make them feel part of the organization. Five years is standard now.

Lang: We are seeing the meaning changing for those kinds of awards. Maybe it was recognition rewards a few years ago; now it is performance. Everything is driven by what you bring to the table. People aren't staying in places as long. So how are they going to get rewarded? It's based on performance.

Eglitis: The movement right now is to measure employees based on their critical performance, key performance indicators, which ties every employee's contribution directly to the company strategy. It's performance management, it may be a minor semantic, but when employees know what they are responsible for and how it ties in to the next level, they ultimately understand the tie-in between their performance and budget.

Markwart: We reward non-sales related employees, who everyday help save money or do something that adds to the bottom line. We recognized them once a year. Bring them to New York to our headquarters. It's called the Spirit Award. We wine them, dine them, take them a show. The finale is they come to the international management meeting, and they are announced for what they did. They get a standing ovation. It's unbelievable. It's an emotional experience. These people are motivated. They go back. They tell other people. They come from all over the Americas-Brazil, Canada.
Continued
This page is protected by Copyright laws. Do Not Copy