The ABCs of Effective Employee Incentives

Using employee incentives, contests, recognition and rewards is becoming commonplace in our industry. But even the best intentions can cause indifferent results if your incentive ideas don’t resonate with the team you’re trying to inspire to perform better….

America’s most underutilized resource is recognition.Dick Kocenivich, Wells Fargo.

Using employee incentives, contests, recognition and rewards is becoming commonplace in our industry. But even the best intentions can cause indifferent results if your incentive ideas don’t resonate with the team you’re trying to inspire to perform better. Over the last five years, I’ve had the pleasure of designing and implementing employee and manager incentive and recognition programs for many of the Top 100 restaurant chains and thought I’d share a few basic guidelines and creative ideas you can use to measure, incent and recognize improved performance among your hourly and management team.

Recognition is Different than Incentives

The first step is to clarify the difference between employee recognition and employee incentives. Both you and your team need to understand how incentives and recognition differ in order to reap the benefits of both. Incentives are usually rewards that are promised in advance of a desired action; a bonus for exceeding a service goal on Mystery Shops, or exceeding a check average sales goal by 5 percent, for example. Recognition, while it may also be financial, is an after-the-fact event. Recognition is often in the form of a reward, but should always include praise, either public or private.

Is Cash King?

Relative to rewards, let’s talk about cash first. I’ve never been a big fan of awarding small cash rewards as a prize, because it has no “trophy” value, but the fact is that it does resonate with many servers as an incentive. If you do choose this route, my suggestion is that you don’t use traditional bills when you give cash rewards for outstanding effort. If you hand a team member a $20 bill as a gesture of gratitude, the emotional buzz lasts anywhere from 12 to 15 seconds. The cash goes into a wallet and, effectively, disappears. Instead, give cash in two-dollar bills — servers or cooks will remember where these came from each time they spend one.

Gift Certificates

Gift certificates can make a longer-lasting impression than cash for hourly employees in my opinion. The special trip the employee makes to the CD, video or department store or to attend an event (concerts, sporting game, festivals) reinforces your appreciation and thanks. And gift certificates can be cost-effective if you exchange your restaurant’s gift certificates for other GCs from local supermarkets, multimedia, or clothing stores. Avoid awarding GCs from your restaurant as prizes.

Experience Certificates

Laura Bell Way, a manager with Olsen Incentives in San Francisco, points out a new incentives trend: experience certificates. Instead of gift certificates, reward performers with vouchers from ski schools, golf schools, spa retreats, backpacking excursion groups, and racecar driving schools.

Reward employees seven days a week

Want to surprise and reward your workers at the same time? Susan Lundine, in the Orlando Business Journal, suggests trying the Olive Garden approach. She reports that the popular restaurant chain once surprised top workers by sending them a different reward every day for seven straight days. One day, workers received a letter of congratulations from top managers; the next day they received chocolate; then movie tickets; restaurant gift certificates; CDs; denim shirts; and, finally, wristwatches

King for a Day

Think beyond traditional rewards like travel or merchandise. When The Automatic Answer Co. asked salesperson John Gurden what he wanted as a reward, he said “I’d like to have a day in my honor.” His surprised sales manager replied, “You got it!” On the designated day, everyone answered the phone by saying “Today is John Gurden Day.” John enjoyed himself hugely — and it cost the company nothing.” I saw this idea in Selling Power, magazine, and thought how much fun it would be to offer as a prize in one of our own restaurants, having servers and hostesses wearing buttons touting the Employee (or Guest) du Jour!

Include your employees in the nominating process

You can’t be everywhere. “Listen to your employees,” says Williamsport, PA restaurant manager Bob Snyder, “and give them the authority to nominate their fellow servers, bussers or cooks for recognition, or to recognize their colleagues themselves without having to go through managers. Don’t presume it will happen without your promoting it.”

Fraction of the Action

Outback Steakhouse has long been recognized as taking a leadership role in showing manager appreciation. The chain is only open for dinner and the company allows managers to buy into the store they manage (borrowed from the old Sambo’s initiative they called “fraction of the action”). This gives Outback managers an obvious investment in their particular unit’s success. Managers can also remain for at least five years at the same unit, contributing a community presence to the co-owner benefit.

Give the Gift of Time

Olive Garden Restaurants converted from a three- manager system to a five manager system to allow a 50-hour week with two days off. At the Cheesecake Factory managers get two days off in a row every week, just like a “real job”.

Recognize employees who talk up your company

Recognize people not only for their performance, but also pay attention to what they say about your restaurant when they’re not at work. If your employees promote the company’s image and reputation by publishing articles in trade publications, make presentations at restaurant shows, or writes a simple letter to the editor of the local newspaper touting your restaurant, be sure to recognize that fact. If you’re lucky, you’ll find more employees working hard to spread the good name of your organization to others.

Variety is the Spice of Life

Boston Pizza training director Shannon Washbrook points out that one of the most cost-effective and fun rewards is merely ordering in food that your restaurant doesn’t serve as an employee meal. For instance, Boston Pizza managers often order in Chinese food after a busy lunch rush, or send out for staff Slurpies from the local convenience staff. “The little things mean a lot,” Shannon says.

What’s your appreciation ratio?

And finally, understand that recognition is a philosophy, not a program. Everyday in your Daytimer, or “to-do” list, write down the name of each employee working that shift. After you compliment or recognize each team member, cross their name off the list. In these days of triple digit turnover ratios, this task is as critical as anything else you accomplish that shift.

Bottom line? You get more than you give when you give more than you get, and don’t forget: a pat on the back is just a few vertebrae up from a kick in the ass.