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- Points-based motivation schemes and pre-paid cards lend themselves well to reward strategies.
- The use of integrating technology streamlines the process and allows staff to be more involved.
- Branding cards with the corporate identity and ensuring the reward that they offer matches the needs and values of the recipient will enhance employee engagement.
- Good communication will help to maintain the scheme’s momentum.
- The technology allows employers to offer more attractive and effective staff incentive schemes.
Points-based staff motivation systems can be integrated with pre-paid cards, says Alison Coleman
Motivating and rewarding staff during tough economic times is a challenge all employers have had to face. Budget restrictions have imposed two key demands on employee incentive programmes: increased cost-effectiveness and closer alignment with business objectives. In response, employers are increasingly relying on two solutions: points-based schemes to motivate and incentivise staff, and pre-paid cards to deliver reward.
In a points-based incentive scheme,staff collect points awarded to them by their employer, which they can redeem on a variety of rewards. Points can be awarded for performance based on criteria such as sales results and staff referrals. The employer controls when the points are awarded, as well as the value of the cash-equivalent reward that is loaded onto the card.
For many employers, the next logical step is to integrate pre-paid cards into the points-based schemes on the same IT platform, with the aim of increasing the scope and flexibility of the reward process, and boosting productivity, motivation and engagement in the workforce. But Andy Lister, managing director at Grass Roots Group, says: “Pre-paid cards are not yet in widespread use for points-based schemes because there is a cost per card, and this will vary depending on the number of cards issued, whether the card is chipped and branded, and the way it is used. For example, there may be a small fee for each reload.
“However, there are occasions when the pre-paid card has significant cost and convenience advantages, particularly for organisations with large numbers of employees they wish to be able to reward.”
Move away rom paper vouchers
Nevertheless, the general trend is moving away from paper vouchers and toward pre-paid reward technology. It can only be a matter of time before plastic becomes the primary tool for points-based incentive schemes. It has many advantages over paper vouchers, including cost savings on secure voucher postage, and greater flexibility. Pre-paid cards can be loaded with a specified monetary value, issued as a one-off reward, or reloaded on a periodic or ad-hoc basis.
Cards are also good for international programmes where paper vouchers are not available locally, and shipping costs would be huge. They also allow the recipient to buy what they want, when they want. Cards offer choice in how and where they are used, so the reward can be personalised for staff.
The most basic product is the closed-loop card, which can be redeemed at just one designated retailer. At the other end of the market, the premium pre-paid system is the open-loop card, which staff can use virtually anywhere. Some retailers may offer cardholders additional discounts. In the middle are various restrictive loop cards that can be used in a limited number of retail outlets.
But when adopting pre-paid technology for reward programmes, employers must consider the rules of employee engagement. John Sylvester, executive director of P&MM Motivation, says: “The open-loop card is considered the ultimate solution in that it guarantees to offer something for everyone. But that does not mean employers can ignore the importance of workforce demographics, because, ultimately, they will only motivate and engage their employees as individuals.”
Communication more important than technology
That could signal a potential flaw in technology-driven, points-based schemes, says Gilles Coccoli, managing director of Prepay Solutions. “Using pre-paid cards with points-based incentive schemes is fine as long as [employers] remember the technology is only a small part of the process,” he says. “It is not the technology that makes a scheme successful, but how well the employer communicates the benefits to staff on an ongoing basis and keeps them engaged with it.
“Otherwise, as sophisticated and impressive as a high-tech motivation scheme might be, to the individual it can appear faceless, and in terms of engaging staff, it will have the opposite effect.”
The same technology that drives the incentive scheme can be used to capture employee data, such as feedback and responses to surveys. This allows a more detailed analysis of workforce demography and values.
But for some employers, technology is a deterrent to progress. Martin Cooper, head of marketing at Love2Reward, says: “Some don’t like the idea of allowing external access to their systems, and have issues with having something installed on their internal servers. The way round it has been to restrict access to a specific portal and control it tightly.”
Configuring systems to meet business goals
While the criteria of motivation and reward schemes can be configured for particular business goals, the pre-paid card is often seen purely as the reward mechanic.
But branding the card gives it extra value as a reward tool, says P&MM’s Sylvester. “A pre-paid card branded to the organisation is a constant reminder to the recipient that they are being rewarded by their employer, and that will raise levels of engagement,” he says.
The most important criterion for an incentive scheme that integrates points banking with pre-paid cards is allowing staff to participate fully in the reward process, says Colin Hodgson, marketing director at Edenred UK. “They should be able to see instantly where they are in the cycle of the scheme, access the points league table, if there is one, monitor any points they have accrued from other motivation schemes, and see what these will be worth in financial terms on their pre-paid card.”
Case study: Points are right chemistry for Boots
Retailer Boots raised its employee satisfaction levels after implementing a points-based recognition scheme.
The scheme is centred around Boots Advantage Cards, which are offered to staff in the firm’s 2,800 stores as reward vouchers in values of £5 or £20-worth of store loyalty points. Managers can also award points to be added directly to the cards.
Kathryn Fletcher, senior reward analyst at Boots, says: “We needed something a bit more instant rather than the lengthy reward applications. And the loyalty scheme is pumping money back into the store.”
The vouchers have received a lot of positive feedback from staff. The chemist’s Great place to work survey, conducted in March, revealed that employee satisfaction levels had risen to 80%.
In addition, 67% of the company’s staff said they felt recognised and praised at work, up 3% from 64% in 2009.
Read more about staff motivation