DA: What is the perception of branded cash, as gift certificates, debit cards and stored valued cards are very popular?

Eglitis: If it's a Bose gift card that sends them back into a retail store, then technically you find that in order for the individual to derive any value of the branded cash, has to spend more of their own. But the reality is it's very difficult for a company to control most of the time what the individual does with it, and what recognition the company will have later on for what was done with it. For many cases, people do remember and will answer differently than the other fellow, and will say, 'Oh my company gave me whatever, and I put it toward this.' But I will say equally as often, there isn't a recollection as with cash. Did I pay a bill? Did I go shopping?

Zanone: I asked brother-in-law, 'Where did you get that TV?' He says, 'Circuit City. My company gave me this card.' For what? 'I made my sales goals.' It took all that to get it out. But at the same Blockbuster is an ideal card. There is room within the industry for both...A gift card like an American Express gift check, a Blockbuster card, Staples card, there is a need for that. It's a nice niche. It helps support the marketplace in general. You have to have a good balance of everything.

Eglitis: We are actually beginning to offer a Bose Gift Card through the premium and incentive unit. There are a number of organizations that want to provide an award to their constituents, and they cannot trade at that level but still want to provide something that is synonymous with whatever the goal was. It's not something we are going to promote extensively, but it is something that we will make available through the appropriate situation. There is clearly a value and clearly room for gift certificates, gift cards, store-valued cards, as well.

Sawai: It's about what the customer wants. It's not what we think they want. Now, as it pertains to the businesses and how they use these types of cards to sell employee motivation and service, it's all about being creative. Gift certificates and gift cards are really proliferating in the marketplace today; there is a place for it. I don't see any kind of cutting into the market, compared to growing and building it...For someone who makes $20-25k on a salary basis, to get something like that maybe once or twice a year is impactful. It is all about businesses recognizing what's going to impact somebody. As businesses look at different ideas, it goes back to the choice and options.

Lang: We have had a lot fewer calls for debit cards in the last year. When they first came out, everybody wanted to go with the debit card program. Now, we have a lot of calls for certificates.

Murphy: Choice and flexibility are big drivers behind those vehicles. A lot of it is about the types of programs being developed and the expanding participant base. Blockbuster cards are so perfect not only for lower-paid employees, but for frequent recognition, spot awards, etc. They allow constant engagement of the company with the individual. They have a very unique place that's applicable.

Haltigin: It doesn't matter on the value of the item. The key is the recognition. We [Xerox] have Customer Heroes, where peers recognized each other. The award you got was a $5 Tim Hortons coffee certificate, and people loved it because there was a spot, recognition aspect, which is all part of employee motivation. We have used merchandise certificates very actively. The key is choice. That's what our people have said to us. 'Recognize us, we love that. If you reward us, give us some choice in terms of what we get.' Department stores are very positive because they allow them to choose whatever they want. But yet, at the same time, depending upon where you go...if you have $100 reward, you may pay [$100-plus] depending upon that fulfillment house.

Boswell: I really do appreciate the discussion about the recognition element because I think that's the key strategic piece here. In the Gallup Organization Q12 study, the fourth point on the list is: 'I have been recognized by my manager in the last 7-10 days.' It's one of the things that make a great work place. You cannot give someone a reward of monetary value every 7-10 days. From the industry association that I represent, National Association for Employee Recognition (NAER), that's the number one thing: How can we do more low cost, no cost, the day-to-day recognition, the pat on the back, the training and encouraging and providing tools? That's an important part of the overall recognition strategy of motivation. How do we create this strategy that encourages managers to do more day-to-day? People aren't leaving companies; they are leaving managers.

Murphy: One of those 12 questions is: Do you have a best friend at work? The reason I mention that is because when we put together programs from a peer perspective, there's a direct correlation there in terms of someone really being happy at their job, and therefore contributing to the company. That Gallup notion of 'a best friend at work' is actually very powerful in terms of putting the linkage to the whole recognition, which is peer-to-peer or manager-to-employee. It is critical. When I talk with customers about rewards, I want to talk recognition first. Then, I get to the reward.

Boswell: In a recent HR.com survey, Fortune 1000 CEOs said that the number one priority this year is to attract and retain. As the economy comes back, all of a sudden, those key people who didn't have anywhere to go because there were no jobs [now have options]. CEOs are saying, 'We have to hang onto our people.' So you need to empower managers to recognize.

Eglitis: And leaders aren't necessarily in all cases the managers. There are a number of people who have affected very positive change. They were leaders, but not necessarily the managers and the directors in the areas of where they were of huge impact.

DA: How can we [as an industry] continue to wage this battle against cash?

Sawai: I don't think it's a battle at all. But it's obvious that a large percentage see [gift certificates] as different and separate than cash. I think it's all about the creative theme, and how you market and promote it to your employees and customers because that is what is going to separate it from cash.

Murphy: I think the big difference is the brand. The brand value and the marketing around that is the key to how someone will respond, remember and do all the things they should do with whatever tool being used. Cash seems to flow through without that memory.

Eglitis: Cash is expensive-expensive to give and to receive, as well.

Haltigin: That leads to one of the key aspects to any reward today: Taxable benefits are very high. They can be as high as 55 percent, based on the individual. That is huge. But taxable benefits are a key driver in terms of the kind of considerations one has, the type of rewards one gives. Cash rewards absolutely have their place. We have used them, along with travel rewards. It really depends on the individual business situation, or the business strategic scenario one is trying to drive. There are business scenarios where there is a spot situation, very critical business strategy that needs to be achieved, where cash is absolutely the right motivator to the right person at the right level. So it is a consideration that cannot be ignored.

Boswell: I had someone say to me once, that cash is a motivator not a satisfier. But it's never going to be enough. From a recognition experience perspective, cash or compensation type awards are often privately given, as opposed to publicly given. Sometimes the biggest benefit from the recognition is the public experience that happens.

Haltigin: That's absolutely right. It's the way in which it's given, how it's presented that is motivation. It is the recognition aspect that is so critical. It is a real element, as part of the mix of reward programs that one has to consider. You use it very sparingly, but it is done. What people are seeking is recognition.

Zanone: I understand the recognition and reward scenario. But the incentive for a lot of people is that bonus opportunity. It's directly tied to your performance. It may not be recognition, but it is recognition.

Murphy: The contract that you have with your employer is that you have your base pay, variable compensation, which is obviously very motivating in terms of performance, but then on top of that you do have recognition and then rewards. I think it is those four components. I think that is where that cash conversation always gets muddied. Because people think of it as used differently. I like to separate that variable component of your benefits to rewards because they are different. So when we talk cash, and how cash is used as your reward, I don't think of it in terms of your variable. I think of it replacing that watch, that trip. That's where I think is the big debate around [whether or not] it truly motivates. Do you get the same feeling around that as you would with the trip or the watch?

DA: According to the Incentive Federation Survey (conducted in March 2003), fewer than one in five respondents said that they ever run an online program. How do you see this number changing?

Lang: I see it changing dramatically. Everything we do is online. For those people who aren't online, we do have some hybrid programs. We spend a lot of time and money and resources in developing our system that we have online. I really think it helps us pull the programs together so people can determine [how many] programs that are running out there and how much is being spent on them. The system will track by individual department, or whatever, what those expenditures are.

Haltigin: That ability to track is very important for a large corporation, particularly when there are multiple divisions and departments, and each may want to have their own program. There is a centralized point from which the company can measure everything and use online rewards. That's absolutely a driver.

Marx: On the supplier side, it creates an interaction between management and the supplier. There are exciting developments in the technology field to combine all of the incentive planning activities. You have a global management tool, which ultimately gives you the statistics to go to upper management and justify your ROI. Also, I read an article about how the Internet took five years to reach 5 million U.S. households, compared to TV and radio, which took 10-15 years to do the same thing. What was valid in 2003, it is shifting enormously.

Murphy: It certainly facilitates measurement, but one of the other things it also does, it allows you to interact with participants on a one-to-one basis. It goes back to strategy, and communicating one-to-one is very powerful. That would be very expensive to do in an offline method.

Eglitis: It is also a very effective tool in addressing changes midstream. You think about electronics, and how quickly these products change and evolve. In some cases you have 18 month lag time between the point in which the decisions are made and the last redemption in a particular book. You cannot manage that effectively today. The entire generation who are participating in these programs have grown up with the Internet as a tool. The nature of these technological offerings has changed how we all do business.

DA: We found in our ROI FACTS Report that 41 percent of respondents do not measure ROI in their incentive programs. One of the reasons cited is because of perceived complexity.

Murphy: One of the reasons is that goals are set at the beginning. I don't know that many companies know what to set them against. That is part of the difficulty.

Godi: It is key to our success to help the client see ROI, show them the formula, help them track it, because with the trending to procurement involved, it is going to require us to support it.

Marx: What I see most is that buyers are cost conscious, but they're not ROI conscious. They are not looking at ROI; they are looking at bottom line budget. That's the problem because they are ignoring the basic principles of incentives.

Lang: I would like to argue that that 40 something percent should be like 90 something percent. Nobody really measures ROI. There are so many things that influence: if you run a group incentive program for a year and raise sales by 10 percent is that your ROI? Not necessarily. You put a big advertising campaign at the same time you do PR. All of that stuff helps grow the business. Factoring in the economy has to be taken into consideration. In most cases, I don't think people truly measure ROI. They don't really know how to get at it, because no one has made them do it in the past.

Boswell: The important thing to remember is that to many, ROI is typically some type of financial measure. But there are aspects in some of these programs that are non-financial that benefit the organization. As you sit down and develop your objectives for your programs, some may be financial and some may be not. We're trying to improve employee satisfaction that is in fact one of your measurements, then you better have some type of base line in place so you can measure 6 months or a year from now. Sometimes I think companies don't measure ROI because they haven't identified what they hope to accomplish. They don't know what they need to measure because they haven't defined what they're supposed to do. It's very difficult to measure emotion, for example. The key is [identifying] objectives, financially and non-financial, for these programs and how to measure them long-term.

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