By Bob Cowen
Superstars are great, and you wish you had more of them. Their KPIs (Key Performance Indicators) are at the top of the charts. You’d clone them if you could. Superstars make you look good to your boss. You fear losing any one of them. They almost always “max out” on your incentive programs. Despite this good news, a poorly designed incentive program creates a negative effect on your non-superstars that will cost you dearly.
Superstars, Tiger Woods, and Contact Centers: An interesting article appeared in The Wall Street Journal on April 3, 2010 entitled “The Superstar Effect,” written by Jonah Lehrer. The subtitle was “From the playing field to the boardroom, when one competitor is clearly the best, the others don’t step up their game – they give up. As Tiger Woods returns to golf, Jonah Lehrer looks at the nature of competition.”
The article closely examines the research conducted by Professor Jennifer Brown of the Kellogg School of Management at Northwestern University. Her research showed that when Tiger Woods is competing, every other golfer takes an average of 0.8 more strokes for the tournament. Professor Brown calls this “the superstar effect.” An avid golfer calls it “choking,” and a non-superstar contact center agent operating under a poorly designed incentive program calls this the “why bother to compete for the incentives because the same people always win” effect.
Yes, seeing a strong competitor has a negative effect if your chances of winning are slim and the number of prizes is limited. Failure becomes a self-fulfilling prophecy. Professor Brown concludes, “Just look at golf: Not only does the tournament winner get a disproportionate amount of prize money, but he or she also gets all the glory.” Please don’t interpret this to mean that I’m against competition; competition is a great motivational tool. It must, however, be used properly and positively.
One-Third of Incentive Programs Produce Negative Results: No, I’m not kidding: one-third of all incentive plans generate negative outcomes, and one of the many reasons is the de-motivating effects of poorly designed programs. In spite of all of the efforts (such as committee meetings, budgeting, prize selecting, announcing, promoting, monitoring, rewarding, and so forth), only one-third produce positive results. (The remaining one-third is not even measured.) The good news is that a well-designed incentive program can easily produce an improvement in KPIs of 20 to 40 percent very quickly – and without breaking the bank.
How to Prevent Self-Fulfilling Failure: There are five basic principles behind a successful and well-designed incentive program:
- Frequently reward small behaviors as they happen
- Reward everyone meeting a goal, not just the top performers
- Make winning fun and exciting
- Pay rewards immediately
- Provide a choice of rewards
Self-fulfilling failure is a result of a violation of both elements of the first principle. When the non-superstar agents see an incentive program with little chance for their success, they will not try to compete. Sure, they may say that they’re competing, just as the other golfers claim to be on their “A game,” but the reality of the situation is that the lack of effort is often subconsciously rather than overtly controlled. Golf tournaments can have only one winner, but that’s not the case with a contact center’s incentive programs. Rewarding small behaviors is often called “rewarding the daily homework”; this translates as breaking down large activities into their smallest components and rewarding them as they occur.
Don’t wait until the end of the incentive program, the end of the week, or even the end of the day to reward activities that contribute to your bottom line. This requires having a budget that allows for rewarding everyone who meets your goals. Oh, and yes, your superstars will also be well rewarded. In their case, I quote golfer Gary Player who said, “The harder I work, the luckier I get” (originally attributed to Samuel Goldwyn).
The great news is that this can apply to all agents with a well-designed incentive program.
Bob Cowen is with Snowfly, provider of Internet-based employee incentives, recognition and loyalty programs. For more information, contact Snowfly at 877-766-9359 or email Bob at email@example.com.
[From Connection Magazine – June 2010]