Incentive - June 2008 - (Page 25)

that theoretically distributes resources evenly to all, without regard to contribution. We believe that the death knell for the rewards and incentives industry would be to cheapen the concept of incentives by, in effect, having a system that distributes recognition to everyone, whether or not they’ve distinguished themselves. When that happens, strong performers will ask what’s the point of knocking myself out if everyone gets the same thing?” says Hadden. If the recognition system unduly favors certain people, or groups of people, on the basis of irrelevant factors, and not on performance, then the system needs to be fixed to provide a level playing field. In the same way that strong performers will ask “what’s the point?” if the system is faulty, then everyone will ask “what’s the point if the system doesn’t even provide the chance to earn recognition?” west Airlines employees, on the other hand, spend so much of their time grumbling about their deal that they have neither time, nor emotional energy, to satisfy customers. And the respective financial statements of the two carriers tell the tale. Bad customer service happens because the employees who are expected to satisfy customers haven’t that recognizes the connection between people and profits. In steel manufacturing, the contented cow is NUCOR, the common cow is U.S. Steel; financial services, Goldman Sachs vs. Lehman Brothers; food service, Starbucks vs. Wendy’s; biotech and pharma, Genentech vs. Bristol-Myers Squibb; IT, “The death knell for the rewards and incentives industry would be to cheapen incentives.” —Richard Hadden satisfied their own needs first, and their managers haven’t instilled in them that their work matters, say the pair. Similar to the comparison of Southwest and Northwest, the two have several pairs of well-known publicly held corporations that contain a “Contented Cow” company and a “Common Cow” company. These companies were selected based on reputation and strategy. The “Contented Cows” have wellestablished reputations as being employers of choice. Many have been repeatedly featured as a “Best Company to Work For,” by leading business journals. The Common Cow companies are not necessarily the worst companies to work for, but they have neither the reputation of being employers of choice nor any strategy that the pair found Cisco Systems vs. Nortel, and automakers, Toyota vs. GM. The “Contented Cows” outgrew, in terms of sales revenue, the “Common Cows” by about six to one. From 2001 to 2007, in aggregate, the “Contented” group earned $192 billion more in net profit than the second group. Its members had 20 times the net income per employee and created 17 times more wealth for their investors, according to Hadden. The bottom line, they say, is that work is contractual, but effort and “oomph!” is personal. Successful incentive programs make the effort even more personal and loyalty even greater. And they create “oomph!”— nothing to “moo” about. s Send comments to feedback@incentivemag.com incentivemag.com Contented or Uncontented Cow Speaking of contented cows, how can unhappy employees make customers happy? The two use the scenario of Southwest and Northwest Airlines. Southwest employees are, say Hadden and Catlette, for the most part satisfied with their deal at work. As a result, they spend their energy taking care of their customers. North- | June 2008 | Incentive | 25 http://incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - June 2008

Incentive - June 2008 Contents Editor’s Note In The News Cover Story: Seventh Annual Industry Roundtable Incentive Interview Case Study Soft Incentives Empowerment and Engagement The Incentive Career Incentive Primer Travel News: Where To Go and What To Do The Cook Islands Field Report: Bermuda Potentials: Here and Now 50 Top Motivators: The Best of the Best Electronics: High-end Audio Equipment Gift Cards: Should One Be Enough? Advertiser Index Off The Cuff

Incentive - June 2008

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