Using incentivization for training engagement

By Taylor Kenney, Vice President of Education

You’ve done the research, laid out your plans, and now you have your very own training program at your business. The hard part’s done, right? Training is available and ready. The LMS is up and running. You couldn’t be prouder. And of course, your team members are champing at the bit to get to learning. Right?

Not quite. Although implementing training is a huge success, the best training plans focus on employee engagement and incentivization of training to ensure rapid uptake and consistent engagement on a regular basis. It’s not enough to simply “set it and forget it” – driving engagement with training is crucial to ensuring an impact on the business.

Although every effort should be made at the leadership level to demonstrate and connect the dots between the value of training and the “what’s in it for me” from the employee perspective, sometimes a little extra push is needed to achieve uptake of training.

What is incentivization?

Put simply, incentivization is an added “cherry on the top” reward to encourage participation in non-mandatory training. These might be new-skills training, leadership training or simply job-related training.

Although we’d like to think that every one of our team members is proactively invested in furthering their skills, interest in self-directed learning varies. Star performers with career goals in mind may pounce on opportunities, while other employees may be content with their current skillset.

According to a recent survey of ASA members, about 38% of trainer respondents indicated they offer incentives for workers to encourage non-mandatory, elective training. Incentivizing your workers is a viable strategy to capture the attention of learners who typically would not engage with self-guided learning.

Understanding motivation styles

Before talking about how to incentivize employees, a word on motivation. Each team member is unique, and that extends to the perception of reward. Some employees are motivated by money; others prefer a public celebration of their achievements. Still, others would embrace training with open arms for that extra day of PTO, with no fanfare needed.

As you develop your strategy, keep in mind that value systems vary from individual to individual; it’s likely that a “one size fits all” plan will not appeal across the board.

38%

What types of incentivization can I use?

There are many approaches to incentivization; the first that usually comes to mind is monetary compensation. While this can be a compelling reward, businesses have a bottom line to consider, and things get tricky with assigning monetary rewards to specific training tasks. The last thing you want is a transactional “pay-for-play” system-gaming situation! There are dozens of other ways to incentivize training.

Career advancement incentivization: One of the most compelling ways to stimulate interest in optional training activities is to tie the employee’s efforts to potential career advancement. Those eager go-getters seeking the next rung on their career ladder are sure to sit up and pay attention!

That said, completing training activities alone does not warrant a leap in career, but it can be an indicator that an individual is ready for that next step. Be wary of a “promotion checklist” approach – training engagement should not be the only indicator in evaluating for leadership advancement.

Social incentivization: Social incentivization uses the power of public recognition to reward engaged employees. Individuals receptive to this reward system thrive in the public spotlight and on peer recognition. Social incentivization might look like:

Recognition on the company intranet

A “Training Wall of Fame” in the breakroom

Blog entries or articles in company publications

Social media posts about their achievements

Again, not every individual would appreciate this approach. Consider how a shy, quiet employee might react to being brought up in front of the entire company to celebrate – pretty uncomfortable! Meanwhile, your gregarious team members would shine under this spotlight and revel in the attention.

Monetary incentivization: While it’s perfectly appropriate to tie monetary compensation to training engagement, typically you will see this strategy employed in the form of gift cards – whether it’s to Starbucks or Costco, a gift card is readily accessible, easy and customizable.

Some businesses have opted for a formalized “pay hike” approach, where completion of training warrants an additional per-hour pay raise, or an extra bump on their bonus. There is nothing wrong with this direct approach — but do think through all scenarios. What would happen if each of your team members earned an extra bonus or raise? Will the payroll withstand the rewards you have planned?

Company swag/branded gifts: Another way to excite employees about training (and bring awareness to your brand!) is to reward them with company swag or other branded tchotchkes to signify their achievements. It could be a T-shirt, coffee mug or baseball hat – the sky’s the limit! Maybe you even invest in special branded apparel only for training champions, to distinguish them visually with their branded wear and get people asking, “How do I get one of those?”

Time off/PTO: Many employees highly value a healthy work-life balance, and an extra day of PTO can go a long way. Although loss of labor through a “freebie” PTO day does have some bottom-line impact, it’s easier to absorb than a permanent pay hike.

Also consider giving an employee the option of a longer lunch, later arrival time or any other flexibility with schedule. Many employees value time spent with family and friends, so while this is not a reward they can physically hold in their hand, it can mean a lot to a busy family.

Other creative ideas

Remember, this is YOUR plan. Riff on any of the strategies above or combine them for an especially motivating incentive for your learners. Some ideas may seem silly or trivial but can also serve to boost morale. Consider:

Quarterly “lunch out” for employees meeting their training goals

Pizza parties in the breakroom for anyone who completed training that month

Prime parking access / onsite building perks

Serving as a mentor / trainer for other employees

Sitting in on decision-maker meetings as an observer (e.g. exposure to leadership)

The possibilities are endless! Remember to keep motivational styles in mind, and you might discover even more creative ways to incentivize your employees to engage with training!

Monetary and social incentivization ranked top in effectiveness with 48% of survey respondents using these methods.

4 attributes of super-profitable companies Laser focus is the key to your goals.

By Randy MacLean, President, WayPoint Analytics

For more than a decade we have noticed a cadre of companies with profit rates far above those of their peers, and started looking for the common attributes that were driving rates of 15%, 20% and even 25%.

Let’s take a look at four attributes we found that were common markers of high-profit companies.

Core competence: Moving product

The top companies are really, really good at moving product. That is, they move more product value for less expense than their peers.

This has been achieved through a relentless focus on efficiency and productivity in their operations. Implementing incentive-driving efficiency measures such as OpCash ratios and ROX metrics and supporting productivity metrics at each stage of your logistics chain will result in continuously improving efficiency that increases this kind of competence.

OpCash Ratios

represent the amount of profit opportunity (OpCash = Gross Profit) produced for a given expenditure.

(OpCash ratio = Gross Profit ÷ expenses)

Rox

(Return on Expenses) represents the actual profit return realized for dollars expended (ROX = Profit ÷ expenses)

Productivity metrics

quantify the things that drive OpCash ratios and ROX. They divide values into something you can count, like: OpCash per manhour, picks per hour, OpCash per delivery, deliveries per day, OpCash per sq ft, etc.

OpCash ratios and ROX metrics are used to quantify efficiencies at each step of the internal logistics chain (sales, order entry, assembly, warehouse, delivery, administration, etc.) at each location. They’re used both to determine improvements over time, and comparisons between locations to support incentives and personnel choices.

Efficiency measures can’t be directly controlled, but productivity measures that influence them can. For this reason, you’ll want to train managers on the creation and use of productivity measures and provide the support needed for these vital tools.

Absolute minimum of inventory locations

Every location that holds inventory increases the quantity and value of duplicated stock, and also duplicates the personnel needed to handle it. Top companies have a single distribution center, and substitute the most modern and creative delivery processes for proximity, providing on-time delivery matched to customer needs.

Most companies have grown by duplicating existing locations into new geographies and have done little rationalization. This makes them vulnerable to competitors that are a step beyond because they can’t meet the price advantage available from comparativelylower handling costs so their profits erode over time.

Optimizing product handling everywhere it’s done drives up OpCash ratios and ROX. Warehouse organization and zone picking have big impacts. Certain systems improvements, and even rudimentary automation can change these numbers significantly.

Where volume and pick frequency warrant it, flooring inventory at a customer location can provide a ROX gain. Although it goes against the stated objective, having customers pick their own inventory from a stock you replenish can be a game-changer for some accounts.

Mastery of delivery alternatives

The top companies have exploited new and emerging delivery options, and have mostly shifted from their own fleets to third parties.

Most companies already offer a de facto range of delivery options. They’ll send an emergency truck or have a sales rep deliver the order. However, these are profit-eating exceptions that disrupt the orderly flow of business and cause a cascade of other expensive exceptions that magnify losses. Nobody can find paperwork from a sales rep delivery, so the customer won’t pay.

Top players have formalized the range of delivery options so time-scales can be chosen by the customer to meet the individual needs of each order. The customer can get moreexpensive same-day or next-day where it matters, nearpremium delivery in a couple of days or batched next-week delivery where lowest cost is desired. The company gets a serious reduction in screwups and expensive corrections.

Formalizing an expanded set of delivery options gives you a competitive advantage, facilitates increase in delivery revenue, reduces expenses and shifts more of your expense base into a variable cost that scales with your needs, and nearly eliminates profit-eating exceptions.

Focus on customer experience

The most descriptive term I’ve heard that sums up the customer perspective on your relationship is “customer experience.”

What’s it like to do business with your company? Really.

For a super-performing company, the experience is smooth and trouble-free, and the causal relationship driving that result isn’t what you’d first expect.

The relentless focus on efficiency and productivity (plus the organizational elements that support them) means that customers get their product faster, with fewer errors and probably at the best price. High efficiency means profit rates that fund specialized expertise, concierge customer service and customer programs designed to make the customers more successful.

The customer experience delivered by the best companies isn’t based on donuts and small talk, rather it’s doing everything they can to make customers more successful. They’re focused on delivering the things customers want and are efficient enough to provide price advantages other companies can’t.

These attributes drive superior cash-flow, profit rates and market share. With very few exceptions, the attributes are available to every company — including yours.

Implementing the OpCash ratios and ROX metrics throughout the company, supported by the productivity measures that drive and support them, will immediately put you on track for market leadership.

Gather your team and get to work on these items to begin your advance to new records in cash-flow, profits and market share.

Randy MacLean is the founder of WayPoint Analytics, the inventor of LIPA, and best-selling author of a series of profit practices books. Visit www.waypointanalytics.net

About the book

This article is adapted from a section in Profit-Driven Analysis & Practices. The CEO’s Guide to Record Profits by Randy MacLean. The book explains the field of line-item profit analytics (LIPA), and how you can use its unique metrics and strategies to outperform everyone else in cash-flow, profits and market share. Get it on Amazon at https://amzn.to/3tjr2VM

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