April 01, 1998
Meetings & Conventions: Winners All - April 1998 Current Issue
April 1998
Winners All

Case study: When NetManage meets its goals, every employee reaps the rewards


Like 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 treatment.

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."

Goal Posts
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 problem.

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.

Growing Pains
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 them."

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 year.

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 Home 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 says.

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 individual rewards.

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 washed. M.L.

Tech Tactic
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 service.

"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 company."

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.

Reality Check
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 complications.

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 doesn't?"

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 all employees."

"If people feel their jobs are meaningful, they are much more likely to motivate themselves." Will it Work for You? 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.

Too Lax?
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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