Answering the Loyalty Question

"It's more important to bring in these programs to retain the loyalty of the younger workers."

• By Jerry Laws
• Sep 01, 2005

Editor's note: Motivating the younger generation of workers is a new, more challenging ballgame, employers everywhere are learning. Fortunately, recognition and incentive programs can help them win it, says Adrienne Forrest (aforrest@bulova.com), national director of special markets for Bulova Corp. (www.bulova.com) of Woodside, N.Y. She explained why in a June 27, 2005, conversation with Occupational Health & Safety's editor. Excerpts from the interview follow:

What does "special markets" mean in your title?

Adrienne Forrest: Some companies refer to it as special markets; some of them say premium incentives or incentive awards division. In our company, it refers to sales that are not going to a retail chain.

How is the incentive business going these days? Is it growing?

Forrest: It's a very, very big part of our business. I think Bulova Corporation was one of the original pioneers in the incentive business. It goes back over 50 years, I've been told. . . . It's not an abnormally large percentage of the company's business, but it's a very impressive part of the company's business. In other words, we're very meaningful to the company. . . .

It has continued to grow over the last few years. We have the benefit here at Bulova of having a multitude of brands and products. We're not just a watch company; we've got clocks, we've got grandfather clocks, and we have watches in a multitude of brands.

Are you aware of how well various categories of incentives are doing? Is any of them hotter than the others--travel, perhaps?

Forrest: Traditionally, the watch and clock category is a very important category, primarily in the recognition programs: service awards, years of service. A watch and a clock were always two of the top redeemers in any type of recognition and even incentive programs. In the last decade, we have had more and more competition from some of the lifestyle categories, such as electronics. Ten years back or even more, we never had to deal so much with the TVs, the iPods--the "sexy electronics," as we like to call them.

That's been the biggest change, I would say, in the last decade: the increase in products other than traditional award and incentive products.

I've assumed the "sexy electronics" appeal more to younger workers than to workers in their 40s and older. Is that accurate?

Forrest: Yes, but they're just becoming so much more prevalent now. There are so many additional categories that an end user or the recipient has to select from. Years ago, a company would offer them a watch or a clock, or maybe a piece of crystal or a piece of luggage. But the offerings now have been so diverse. That makes it a little bit more challenging for us. Plus, the buyers are getting younger. So what's interesting to them, as far as selections for their work programs, are some of these more contemporary lifestyle products.

If you take it further, even in our categories of the traditional products like a watch, 10 or 20 years ago there were probably a handful of watch companies out there in the business. Now you've got everybody and his brother, from designer shoe companies and luggage/handbag companies to clothing companies [who have] licensing agreements with some of these companies. Without mentioning all the names--I'm sure you can figure out who they are-- you've got 10 to 20 new watch companies out there in the market, too.

It must be an indication there's a bigger overall pie to seek, if there are so many new entrants.

Forrest: Exactly. Definitely, the pie is getting much, much larger.

That must be good, despite the competition for a larger slice of it. Do employers feel they need to offer a variety of incentives or awards, or just one? What do people usually opt for?

Forrest: I think primarily they go for a variety. Or they're going to go with something like a gift certificate, where they leave the choice up to the recipient. If they don't do either cash or a gift certificate, they tend to have a variety of offerings.

That's another category, by the way, that we've been plagued in the last few years. It keeps growing and growing: the gift certificates.

I thought that category had shot up in popularity. Does it continue to rise?

Forrest: It's definitely a growing category that we have to contend with.

Do you sense employers tend to do this with a very long view? If they find this is working for them, they might do it for 10, 20, or more years?

Forrest: It's a safe bet to say yes. I think in general, employers feel to offer these types of programs is beneficial for them. And if it's not broken, then why fix it? They tend to stick with something, definitely, if it's been going along, and then the key is just updating whatever the products are in the program. Once they've put a program together, they're going to stick with it.

What advice do you have for a manager who hasn't used incentives before but is considering them?

Forrest: You have to take a look and see what are the demographics of your workforce. What type of company is it? Is it a blue-collar type of environment? Then some of these travel awards or fancier electronics [might not be best]. You never know.

You have to take a look at the makeup of your group and your company, look at the age, and see what do these people like? And then put together a program that's geared to their specific group.

In doing that, it is sensible to survey the workers? Asking, if you don't already know it, "What would you be interested in getting if we were to offer an incentive program?"

Forrest: I think that's a great idea. Nobody's ever asked us that in our company or in any company that I've worked with, but I think that's a wonderful idea to get people involved in the process.

When you mentioned workforce demographics, you talked about which rewards might work well or might not. Are there certain industries or categories of workers that seem to be extraordinarily receptive?

Forrest: Receptive to an incentive program? I can't think of any workforce that would not be receptive to an incentive program. But I think certain types of programs, be it cash rewards versus merchandise [might work differently in different settings]. There are certain companies where maybe the people just want cash. Maybe that's the incentive; maybe that's going to be the best motivator.

So I think every company would be different. That's why your idea, that maybe the employer should go and survey their people, is a great idea.

I can't think of any situation where an incentive program would not be motivating to the employees.

It certainly should, if it's set up right and maintained.

Forrest: Yes. And it doesn't always have to be money; an incentive to get a day off, or something. You'd be the worker of the week. You have no accidents on the job and you get a day off, or you get the special parking spot in the parking lot. But it's singling somebody out for doing the job, and it's an incentive for them to do that job. It doesn't always have to be merchandise or money, even though our business is selling merchandise.

This gets back to what we were talking about a few minutes ago: You could offer a banquet, a buffet of choices, and some of them could be the simple things you're talking about that aren't very costly.

Forrest: A pat on the back in front of your fellow employees.

Yes, with your name and photo up on a bulletin board or in a newsletter. That could be effective. Should the manager set up a program that rewards individuals, or should it be team-oriented?

Forrest: I think the team suggestion is a very motivating one, especially if that's the type of environment they're working in. Like an assembly line where they are working on a team--it's to get more productivity out of the whole team; it's not just one person.

By singling out one person, it does not promote the teamwork spirit and the productivity of the whole team.

I could see situations where it could be divisive to do it individually. Do employers and managers sometime expect more than incentives can deliver? Do people you work with normally know what they want to accomplish and what they can accomplish with these programs?

Forrest: I would have to imagine that before you put one of these programs into place, you have a plan as to what your target goals are. You want 10 percent more sales or whatever the target's going to be. They should, but they don't have to, have a clear-cut idea of what to expect in the end.

Yes, but what if somebody said, "I want my sales up by 60 percent the first year" or "I want my recordable injuries down by 80 percent the first year." You could think this program would make a big change overnight, yet it might not be possible.

Forrest: They have to assess the program. One of the questions you asked me a few minutes ago was, do employers tend to do these programs over and over. If they feel it was a complete failure after the first year, that doing this wasn't going to give them the expected end results, then maybe the incentive wasn't the answer to the problem.

Good point. They might have thought of it as a quick or easy answer.

Forrest: But I would think the majority of the time, if it is working, that's when the employer wants to keep it going. I'm sure there are some instances where the incentives end up just being a total failure, and they kill it. That's the end of that.

I expect that would be worse than not having started it at all.

Forrest: Right, de-motivating for the employees.

You'd have a boomerang--exactly the opposite effect from what you intended to accomplish. Have you found incentives enhance an employee's long-term loyalty to an employer?

Forrest: I would have to say that they do. I think that these are the types of things that make people want to stay at their jobs, over and over.

There isn't any real recognition at some companies, and there, any kind is welcome. Even basic recognition efforts by an employer might go a long way to make somebody more loyal and happier.

Forrest: In terms of loyalty, you can look at younger people versus people that have been in the workforce a long time. At our company . . . we've got so many people with 30, 40, even 50 years of service, which you don't see nowadays, you know?

I think the loyalty is a different kind of animal nowadays with the younger people coming out of college. They don't have the same sense of staying with a company for their whole life that people used to. I think the younger people, it's probably a little more difficult to keep them. That's why it's more important to bring in these programs to retain the loyalty of the younger workers now.

That's a very good point. Everyone agrees the new generation of workers is strikingly less loyal to any workplace.

Forrest: I think there really must be motivating factors to keep them. They leave in three years, five years. You don't see too many of them staying around if they don't reach whatever they were looking to attain within a company.

Incentives could be a key way to cement long-term loyalty.

Forrest: It wasn't as hard with the people who started working 40 years ago because that was what they were told: You get a job and you stay there until you retire.

There really is a sea change in the way people come into the workplace these days. No matter what industry it is, I think that's true. Loyalty was assumed then, but it can't be now.

Forrest: You see it everywhere. Your credit card companies--how they're all battling to keep you happy. The airlines and the hotels: Everybody's looking to keep their people where they are.

The loyalty shown by employers is not as strong as it used to be, either. You mentioned the airlines--look at all the layoffs they've carried out. It's happening in so much of the manufacturing base of the United States. A lot of incentive programs are used in manufacturing, but can they be used in service industries, as well?

Forrest: We're doing a tremendous amount of programs in hospitals. It's special events and recognition, anniversary programs. Insurance companies recognizing big company milestones, giving somebody something: Again, it's another token to remind them of the loyalty the company has for them.

Health care has the reputation of being a high-turnover industry. Getting just a little accomplished in terms of increasing people's loyalty could go a long way.

Forrest: Incentives is a billions-and-billions-of-dollars-a-year industry, and it keeps increasing every year. There's some staggering number, very low, for the percentage of companies that actually use incentives. Probably under 20 percent of the companies in the country use incentive programs. And even with that low number, it's a multibillion-dollar industry.

You look at that and think. . .

Forrest: There's an awful lot of potential out there.

Exactly. There's so much growth potential for all of you, even with so many new entrants.

Forrest: We're always very optimistic. There's room for all of us out there.

This article appeared in the September 2005 issue of Occupational Health & Safety.

This article originally appeared in the September 2005 issue of Occupational Health & Safety.