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2 posts from August 2012

2012.08.13

Tips for Jump Starting Employee Recognition Program ROI

Originally published as a guest post at http://www.marketinginnovators.com/thought-leadership/blog/

In our last post we noted that smart organizations are actively investing in their people. Measuring the ROI of these investments can be of great value. In short, measurement can help justify, defend and improve these programs.

Don’t know where to start? You’re not alone. The “paralysis of analysis” effect is common when companies decide that measuring results is a good idea. The beauty of the ROI Methodology® described in the previous blog is that it provides a logical evaluation framework and a process model, a step-by-step approach to getting the job done well.

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Keep it Simple. The most important tip when getting started is to keep it simple. Keeping things simple reduces the risk of missteps and helps ensure that your measurement efforts are sustainable.

Four Tips for Getting Started

1. Measure Lower Levels first

2. Use Few, Simple Measures

3. Calendar It, Then Do It

4. Make Measurement Pay

1. Measure Lower Levels First 

Return on Investment (Level 5) is undoubtedly the ultimate measure, but starting measuring ROI can be daunting. In contrast, measuring how participants think and feel about the program (Level 1, Satisfaction/Reaction) and whether they fully understand the program rules and expectations being placed on them (Level 2, Learning/Understanding) can be done easily and can provide amazingly rich insight. When done well, this level of measurement can effectively validate success and identify both barriers and enablers to performance. Knowing these can guide mid-program adjustments and show the way to evidence-based program improvements.

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2. Use Few, Simple Measures

Determining measures is simply a process of identifying objectives for Levels 1 and 2. Ask yourself, “What does success look like?” Levels 1 and 2 objectives typically revolve around enthusiasm, confidence, trust, fairness, relevance, attainability, and planned action.

Next, be discerning. Measure only the things that you are prepared to take action on. For example, don’t ask sales people if they believe that the incentive program is attainable unless you are willing to consider modifying the rule structure.

3. Calendar It, Then Do It

Advance planning ensures that you measure at the right times. Poor planning can lead to questionnaires, interviews, and focus groups that are completed late and, therefore, of less value. This can frustrate participants and limit your organization’s ability to use the findings to make meaningful improvements. Ultimately, lack of timeliness may signal lack of commitment and damage the organization’s credibility among stakeholders.

4. Make Measurement Pay

Now that you have gained valuable insight into what’s working, what’s not, and what you can do about it, the fun begins. Create an impact report that includes an executive summary of findings, all relevant data and an action plan. Then, get it into the hands of key stakeholders and gain approval to implement the action plan.

In summary, the benefits from measuring results of people performance improvement programs can be huge. Use the four tips above to start realizing the power of measurement in your organization now. In the words of General George S. Patton:

“A good plan executed now is far better than a perfect plan executed next week.”

 

Measuring Engagement ROI – Getting Started

Originally published as a guest post at http://www.marketinginnovators.com/thought-leadership/blog/

Good news. Labor productivity continued to increase in America throughout 2011, according to the Bureau of Labor Statistics. Some of this improvement is fueled by innovation and technology. An unidentified portion of this improvement has come from a practice that originated during the Great Recession of 2008: increased expectations placed on the current workforce.

We’ve all seen it. Reduced workforce, longer hours, higher demands, lower or non-existent raises and trimmed benefits. It isn’t a surprise Gallup has found that 71 percent of American workers are “not engaged” or “actively disengaged” in their work.

As the economy improves, smart organizations are shifting their strategy and beginning to actively invest in their people. We see it in renewed commitments to people performance management initiatives, namely incentives, rewards, recognition and loyalty programs.

Measurement Gap

When it comes to large investments in people, conversations frequently turn to return on investment or ROI. It’s a fair question. When organizations invest millions, they typically expect a financial analysis. Unfortunately, little action has been taken in the past to provide an objective answer.

Fear has been a frequent obstacle. What if measurement reveals poor results? Not knowing where to begin has been another challenge. Measuring ROI on traditional capital investments can be rather straightforward. Measuring results of an investment in people is a whole different animal.

ROI MethodologyTM

Getting started isn’t that hard any more. Over the last 25 years, the ROI Institute has developed and refined measurement and created a methodology that provides consistent and credible results. One of the secrets has been a logical approach to categorizing a myriad of possible metrics into five levels. The five levels include the following:

1. Reaction and Planned Action

2. Understanding and Learning

3. Application and Implementation

4. Business Impact

5. Return on Investment

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Using this approach to organizing program objectives becomes beneficial when you consider the need to achieve success with Level 1 in order to assure success with Level 2 and so on, right up to Level 5, ROI. In other words, we don’t just measure business impact and ROI without understanding what is going on in the heads and hearts of participants.

Another key to success with this methodology is the philosophy surrounding its use. When used properly, it serves as an effective process improvement tool. During the evaluation of a program, barriers and enablers to success will be identified. The real treasure to be found in identifying barriers, because once gaps are identified solutions can be developed and deployed.

The Process

Another benefit to the ROI Methodology™ is that it prescribes a step-by-step process to complete the evaluation of a program. Specifically, it provides a process to plan the evaluation, collect data, analyze data, calculate ROI and develop a report.

This process takes a seemingly complicated task and makes it doable. In fact, the ROI Methodology™ is used by thousands of organizations, including Marketing Innovators, who guide clients through the process in order to measure ROI for a multitude of programs. The net result is enabling more companies to build the business case for investment in their people.

In my next post, I’ll explore how to get started and make an investment in measurement pay off.