Twice blessed: From left, Continental Airlines’ human
resources executives Donna Towle and Melanie Jernigan
present reservations specialist Ermanno Iacopozzi with a new Ford
Explorer his second to reward seven years of perfect
attendance.
In an era of budget cutbacks
and corporate scrutiny, big companies continue to see
great value in running incentive programs. For employees, the
allure of travel, cash bonuses and expensive premiums remains a
powerful motivator. As an example, a 2004 survey by the Maritz
Travel Co. found that 89 percent of employees competing in an
incentive program kept the travel reward in mind when performing
their jobs. For employers, these programs help boost profitability,
performance and team-building. Incentives, in short, still appeal
to the bottom line.
But such programs must be well run to succeed. M&C talked with
planners at four major U.S. corporations with significant and
distinctive incentive contests. Their stories will prove
rewarding.
Continental Airlines: A rally
around ratings
Houston-based Continental Airlines’ program makes a great example
of the power of incentives to turn around a company’s corporate
culture, its esprit de corps and even its fortunes.
“Ten years ago, we were the most broke airline in the industry.
We had a product customers did not want to buy and a work force
that did not want to come to work,” says Donna Towle, the carrier’s
senior director of corporate human resources. Add to that a poor
on-time record for arrivals and departures, and a reputation for
inconsistent customer service.
Continental’s two formal incentive programs were launched in
1995 and 1996, soon after current chairman and CEO Gordon Bethune
came aboard. Towle, who helped design the programs with other top
managers, says they specifically targeted two areas found to need
the most improvement: employee dedication and teamwork.
Beyond the generous travel perks employees already received as
part of their benefits, a new incentive initiative gave the
carrier’s 40,000 employees (with the exception of senior managers)
a chance to win a new Ford Explorer, provided they had perfect
attendance for a six-month period. Each period ended with a
drawing, and one winner from each of 10 work groups was
selected.
The other program, intended to boost monthly on-time arrivals,
was cash-based. When first launched, employees received $65 each
month the carrier made it to the top five (as determined by the
Department of Transportation) and $100 if it achieved number-one
status.
“The first month it was offered, we made it to the top five,
and we’ve moved up consistently,” says Towle. As economic
turbulence and fierce competition has persisted, the bar has been
raised from top five to top three, and now the airline has to place
first before rewards are handed out. Also, Explorers are now
awarded once a year, instead of semi-annually. The carrier hopes to
bring back the broader rewards in the near future.
To date, Continental has given away some 120 Explorers and paid
$332 million in on-time bonuses; according to Towle, the amount is
far less than costs the airline would have incurred to compensate
customers for delays.
CEO Bethune and Continental’s other top brass consider these
incentive programs so crucial to the airline’s continuing success
that they’ve retained them in the wake of 9/11 and through some
tough fiscal periods, even when hard business decisions such as
employee furloughs have had to be made.
“We said we could save a few a hundred grand, even millions [by
cutting the programs], but we would have inherently changed the
company’s culture,” notes Towle. “We would rather keep them and be
a smaller company.”
Diebold’s Master’s Circle winners conquered sand, surf and sales
goals.
Diebold: Going the extra miles
A travel incentive program that continuously grows in scale and
complexity can keep employees motivated for the long haul. At least
it has worked that way for Diebold Inc.
Anyone who has grabbed cash at an ATM, swiped a security card
or voted in an election via touch-screen technology has likely used
equipment and networks made by Canton, Ohio-based Diebold. The firm
employs more than 13,000 people in 88 countries and reported more
than $2 billion in revenues last year.
Jerry Bryan, senior manager for global events, runs the
corporation’s travel incentive program, the Master’s Circle. Geared
toward 560 regional service managers, sales associates and
international distributors, the annual initiative is built around a
sales contest but is based on revenue generated rather than sales
numbers. The contest’s prize: travel to an unforgettable
destination, hand-picked by CEO Wally O’Dell.
When the program began 25 years ago, winners were treated to a
stay in Akron, Ohio, for sales meetings and golf. By the fifth
year, “we traveled outside Ohio,” recalls Bryan. “Basically, it was
a golf trip with morning meetings. In the late ’80s, we allowed
spouses but didn’t pay for them. In 1990 we started paying for
spouses, too. Two or three years later we started paying for guests
of nonmarried honorees.”
With the help of Atlanta-based incentive house USMotivation,
Diebold’s program has evolved into the highly successful Master’s
Circle. Indeed, the firm has won more Crystal awards, a prize given
for outstanding motivational travel initiatives by the
Chicago-based Society of Incentive & Travel Executives, than
any other company, notes Bryan.
One of the program’s winning differentiators is its promotional
website. Says former SITE President Peggy Whitman, “The attention
to detail and use of Diebold’s intranet helps keep company
employees updated and excited.”
Recent Master’s Circle destinations include Acapulco and
Hawaii. “We open with a short meeting. Then we turn the honorees
loose for four days of optional activities,” explains Bryan. “On
the final evening, we have an awards banquet. The following morning
they go home, except for the Circle of Excellence winners.”
Circle of Excellence represents the second of Diebold’s
two-tiered incentive: This elite group consists of the firm’s 15
best contest performers, who enjoy four extra days at a more remote
destination, with more deluxe amenities. For example, recent Circle
of Excellence winners luxuriated at the renowned Las Ventanas
resort in Los Cabos, Mexico.
The second-tier contest was established five years ago, despite
initial fears it would water down the Master’s Circle. “We were
looking for a way to keep people who qualified for the first trip
motivated to keep qualifying for the second,” Bryan says. The
strategy worked.
“It is very, very competitive to go on that second trip,” Bryan
says. “And that’s what it’s all about.”
AFLAC: Everyone’s a winner
Columbus, Ga.-based AFLAC, the insurance company best-known for its
ad campaign’s beleaguered duck, has been cited by the Napier,
Ill.-based National Association for Employee Recognition for its
multiple incentive and recognition programs.
“If you treat employees well, they’ll take care of business,”
says Sharon Douglas, vice president, human resources,
in summing up AFLAC’s philosophy.
The firm’s 4,000 employees are rewarded in two ways. First,
with annual performance bonuses, based on targets specific to their
division. “They can earn up to 6 percent of their salaries if they
meet all targets,” says Douglas.
Second, since the early 1980s, the first week of May has been
employee recognition week. All staff members are rewarded with a
variety of events and gifts, ranging from meals to drawings for
elaborate merchandise and cash prizes.
For the independent sales reps who hawk AFLAC’s products, a
number of separate incentive programs are held throughout the year.
The most competitive such contest is a close-ended program called
the President’s Club. The prize is travel; lately, the destinations
have been limited to North America, although before 9/11 programs
were held in countries such as France and Greece. (According to
Rashmi Hudson, second vice president of marketing, sales and
promotion, most contestants have indicated they are not comfortable
traveling outside the continent.)
Neither the sales incentives nor employee incentive budgets
have been trimmed at AFLAC during a time when many other firms have
curtailed their spending on programs. The priority put on employee
recognition and reward at every level has served the firm well.
AFLAC has become one of the top three life and health insurance
companies in the United States, with nearly $12 billion in revenues
last year and $800 million in profit. And that’s nothing to quack
at.
Viasys Healthcare: Smart strategies
How do you get an incentive program started in uncertain economic
times? For Conshohocken, Pa.-based Viasys Healthcare Inc., the
answer was to put ingenuity to the fore.
The company, which employs more than 2,000 people in the United
States, develops and manufactures high-tech devices for
respiratory, vascular and other medical specialties. The incentive
program, just two years old, is geared toward a hard-charging sales
team of 200 that markets the firm’s products to hospitals,
laboratories and clinics worldwide.
In the form of an annual contest, Viasys’ incentive initiative
is run by Harrith Wickrema, a special assistant to the CEO who also
runs Harrith Productions, a special-events company based in
Oreland, Pa. “Each of the divisions selects its top salespeople,
and the chairman selects the top one or two,” he notes. “They are
invited to become part of what’s called the Chairman’s Club. They
are given stock options and five-day trips at exotic locations
chosen by the CEO.”
As a new company (it went public less than three years ago),
Viasys was seriously concerned with costs when it devised the
program, and some creative thinking has provided maximum bang for
the incentive buck. For example, Wickrema was able to negotiate a
better room rate for winners at the Atlantis in Bermuda by
orchestrating free press for the hotel.
“In our second year, we went to the five-diamond Ritz-Carlton
Naples in Florida,” he recalls. “How did we do it without spending
the kind of money they wanted? We said, ‘We’ll come whenever you
need us, if you give us the right price.’ So Sept. 11, 2003, was
the date. They gave us tons of free upgrades. You could see the
faces of the attendees as they walked into the ballroom their eyes
lit up!”
But as Wickrema knows, any incentive trip is more about
inspiration than destination. So he tried to enlist the winners’
spiritual side: “There’s a Native American legend that if you make
a wish to a butterfly, the wish will come true,” he says. “We all
made a wish for Viasys to increase its sales. Then, each employee
got an envelope, and as they opened them, hundreds of butterflies
flew up into the sky.”
Perhaps the ritual worked. Viasys Healthcare recently reported
nearly $400 million in annual revenues and almost $22 million in
profits. The incentive program itself has won multiple awards from
the Chicago-based International Special Events Society, with
citations for originality and creativity. Call it yet more
incentive for Viasys to keep making its employees happy.