Meetings & Conventions: Winners All - April 1998
Case study: When NetManage meets its goals, every employee
reaps the rewards
BY MARIA LENHARTL
ike many companies, NetManage, a software
manufacturer headquartered in Cupertino, Calif., sets a sales goal
each year and offers a lavish group incentive trip if the goal is
met. But here, almost everyone wins.
That's right:Virtually every employee with a decent performance
record and a minimal amount of time on the job gets star
In past years, the full roster of NetManage employees -
receptionists, engineers, shipping clerks, you name it - have
gathered together at such luxury resorts as The Boulders in Arizona
and Grand Wailea Resort in Hawaii. The program reached its zenith
in 1996 when 500 employees and about 250 guests took off for the El
Conquistador resort in Puerto Rico for a four-night, $4,000
per-person incentive trip that included everything from a
Jurassic Park theme party held in a rainforest to a
formal, black-tie dinner on the beach, where participants were
serenaded by the Puerto Rico Symphony Orchestra.
"The remarkable thing was that there were people on these trips
who would ordinarily never get to stay in a five-star resort and
receive the kind of treatment that you get on an incentive," says
Carolyn West, president of Meetings Plus in Lafayette, Calif., the
incentive house that has designed the past three programs for
NetManage. "It takes a generous spirit to reward everyone. The
company could have just sent the top 50 salespeople."
But rewarding only top achievers would be contrary to the
egalitarian philosophy of Zvi Alon, CEO and founder of NetManage,
according to Pat Roboostoff, the company's senior vice president of
human resources. "He firmly believes that every employee
participates in the company's success - that everyone makes it
happen and should be treated the same," she says. "We don't feel
that incentives should focus only on the sales staff, because we
feel everyone is important to sales."
Early each year, NetManage kicks off its companywide incentive by
announcing a sales goal for the year ahead. In October, by which
time the company can reliably determine if the goal will be met,
the trip location is announced. The trips take place in January,
just three months later.
Throughout the year, employees are kept abreast of the company's
financial progress at Friday lunch meetings and through monthly
mailings. According to Roboostoff, the objective is to keep all
employees focused on the sales goal, not the incentive trip itself.
Rather than being a drawback, Roboostoff says keeping the trip
location a secret for much of the year is an advantage that "adds
to the mystery and excitement."
Every employee who has been with the company since Sept. 30
(prior to the following year's goal announcement) is eligible for
the trip. The only exceptions are those employees whose job
performances are deemed unsatisfactory. In such cases, the
employees are given a warning and a chance to correct the
To determine which employees may not make the cut, the human
resources department relies upon the performance review process
that is already in practice. According to Roboostoff, it's
extremely unlikely that an employee will not qualify, estimating
that about "99.8 percent" of those with the required tenure have
been eligible for the incentive trips.
How successful has NetManage's inclusionary approach been? While
the company met its sales goals for the first three years in a row
under the program, last year marked the first time the goal was not
met. And while the firm's leaders still believe that their approach
to incentive rewards is sound, Roboostoff fears the rapid growth of
NetManage may force the company to alter its program and make it
less inclusive. NetManage may have to consider alternatives, such
as individual or departmental rewards.
A San Diego-based DMC, PRA Destination Management, recently
found itself in a similar predicament. PRA had a program that
rewarded an entire office location, rather than the whole company.
For four years running, from the early to mid-1990s, the PRA office
that achieved the highest results earned a five-day trip to Hawaii,
support staff included. On average, the trips involved 20 staffers
plus their spouses or guests.
The program was discontinued for the same reason NetManage may
have to go back to the incentive drawing board: The company's
growth made it impractical, says PRA's vice president, Sandi
Cottrell. "When we offered it, we had just two offices and we could
find a window of time when there was no business going on," she
says. "Now we can't shut down an office totally for any amount of
time." While PRA now offers individual travel awards for account
managers, Cottrell says the officewide incentive was "the most
motivating thing we ever did. People were incredibly pumped up
about it, and those who went on the trips still talk about
But for expanding companies with growing staffs, pulling off a
company- wide incentive has become increasingly difficult. "As we
add more employees and new offices, it's getting harder to find a
place that is convenient for everyone and a place that can
accommodate all of us," she notes. While many of NetManage's 500
employees operate from the company's Silicon Valley headquarters,
the firm also has a large engineering site in Israel, in addition
to sales offices in various locations throughout Europe and Asia.
NetManage also has acquired several smaller firms within the past
Another logistical challenge is keeping the company's
performance on track while a major portion of the work force is out
of town. "What it means is that the company is in the hands of the
newest employees," says Roboostoff. "Of course, we're all just a
phone call away if we're needed."Bringing the Concept
Many of those in the
business of running clients' incentive programs have adopted a
rewards-for-all approach to motivating their own employees.
At Meetings Plus in Lafayette, Calif.,
president Carolyn West has put the idea into practice. Two years
ago, after a sales goal was met, she took her entire staff of 45 to
Hawaii for a long weekend at the Ihilani Resort & Spa on Oahu,
where they enjoyed some of the pampering normally reserved for
clients. "I share the philosophy of some of my clients that no one
is better than anyone else; everyone makes a contribution," she
The Meetings Manager, a destination
management company based in San Diego, worked with Escondido,
Calif.-based motivation consultant Tom McDonald to design an
incentive program with criteria for each of its 30 employees that
reflect the nature of each person's job and the level of
performance expected. Those who meet the criteria qualify for
Making the program even more egalitarian, employees were
asked to create a wish list of rewards. Within reason, these are
the ones they can choose from. "It was interesting to see what
people really want," says Fabienne Hanks, vice president of sales
and marketing for the DMC. Rather than the traditional awards of
cash, merchandise or travel, some employees have asked for time off
to spend with family or to get their houses cleaned and cars
While NetManage's inclusive viewpoint may be rare in the corporate
world as a whole, planner West says it is not unusual in the
booming Silicon Valley, where many high tech companies are in a
fiercely competitive battle to attract and retain skilled
employees. Lavish companywide perks are pervasive throughout the
region, including everything from gourmet lunch fare to concierge
"Employee retention is a major concern for these companies, and
you can see it in the way they view incentives," says West, whose
clients are primarily high tech firms. "They're broadening the
definition of incentives. Rather than singling out individuals,
they're concerned with building morale throughout the entire
While NetManage has an extremely extensive companywide incentive
program, West says other clients have taken the same tack on a
smaller scale. Recently, she planned a weekend at Silverado Resort
in the Napa Valley for a San Francisco-based software company that
wanted to reward its work force of 500. "It was far less ambitious
than what NetManage did, because the company had a smaller budget,
but the spirit behind it was the same," says West.
But while the incentive industry, which has been striving for years
to expand the traditional motivation programs beyond sales
departments, may welcome the concept of companywide rewards,
industry consultants and meeting planners are not so convinced.
They say the concept, while not impossible, is fraught with
Michelle Hayes, director of the incentives division for Bowers
Worldwide Travel Management, based in Phoenix, says she has had
several clients consider the possibility of companywide rewards,
but reject the notion once they take into account the logistics.
"Even companies that are doing well usually don't have the budget
for this kind of program," she says. "It's also very hard to drive
down the goal structure through the various departments and create
a reward process that is equitable across the board. For example,
what if one department makes its numbers and the other one
While Hayes considers the rewards-for-all concept to be
impractical for large companies, she does think it's realistic for
companies with 100 employees or fewer, particularly if the reward
is close to home. "I've seen companies do an all-employee event
locally as a reward for meeting a sales goal," she says.
"Typically, it involves a Friday night stay at a local resort for
each employee and a guest. It's a thank-you that builds morale but
doesn't break the bank."
Making a Connection
Tom McDonald, a motivation consultant and business psychologist
based in Escondido, Calif., also believes the concept has more
merit for smaller companies, and not just for budgetary or
logistical reasons. "To be motivated, people need to see a
connection between their job performance and the overall goal," he
says. "They need to feel that the work they do makes a difference.
The larger the company, the harder this is to accomplish."
No matter what the company size, McDonald says it's a mistake to
set just one blanket goal for the company. Instead, he recommends
breaking it down into segments so that each department knows how
they are contributing to the overall objective. "Make a list of
things that will contribute to the big goal, and let people know
where they come in," he says.
Event planner Jim Skiba, president of Incentives To Intrigue in
San Francisco, agrees. Along with setting criteria for each
department, he recommends the program encourage communication
between the various departments. "Not only do people need to know
how they're contributing, but how everyone else is contributing as
well," he says. "If you want to create a team approach, people need
to know and appreciate what others are doing. They need to
understand how everything fits together."
Equally important for team spirit is for employees to feel a
connection with managers, including the CEO. "One reason sales
incentives work is that top management already tends to be
buddy-buddy with the salespeople," says Skiba. "For companywide
incentives, managers need to establish that kind of rapport with
"If people feel their jobs are meaningful, they are
much more likely to motivate themselves."
Will it Work for
Would an "everyone wins"
incentive program be right for your organization?Motivation experts
offer these tips.
The smaller, the better. The concept is
easier to implement at smaller companies where employees are
concentrated in just a few locations.
It has to make sense. A company-wide
incentive works best if it's part of a broader company philosophy
that already considers everyone part of the team. It's not
compatible with a rigidly hierarchical corporate culture in which
top management is aloof from employees.
Don't drag it out. It's hard for an
entire company to stay focused on a goal that's too far in the
future. Keep the qualifying period under a year.
Make it relevant. If a company-wide goal
is set, break it down into smaller departmental goals or take other
steps to make sure people know how their job performance affects
the big picture.
Consider scaling back. If the budget or
business schedule makes it impractical to offer a lavish
company-wide trip to an exotic locale, opt for a luxurious weekend
at a local resort instead. M.L.
Despite the challenges, McDonald says the rewards-for-all concept
has merit and gives companies the chance to prove that they really
do consider all employees to be part of the team. "It helps
everyone understand that they are involved in the success of the
company," he says. "If people feel their jobs are meaningful, they
are much more likely to motivate themselves."
Also enthusiastic is Bob Vitagliano, executive vice president
and CEO of the Society of Incentive & Travel Executives in New
York City. "This is an intelligent approach that sends the message
throughout the company that everyone is indispensible. It doesn't
get hung up on who is doing what."
What gives McDonald pause, however, is the chance that a
rewards-for-all program would include those who don't deserve it.
"It's not right to reward the laggards along with those who are
making an all-out effort," he says. "You'd have to create an
environment where the slackers are weeded out."
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