The How and Why of Contact Center Employee Incentives

By Bob Cowen

Two words reveal the secret of successful contact center incentive programs: feedback and reinforcement. These are two of the four core tenets driving behaviors that affect Key Performance Indicators (KPIs). As a child and young adult, you learned that continuous feedback guided you in your pursuit of learning. You received regular grades for homework, tests, reports, and the dreaded final exams, thus conditioning you to expect continuous feedback. Once out of school and into the workplace, continuous feedback abruptly stopped and changed to quarterly goals, MBO (management by objective), and annual reviews that often have little relevance to your daily tasks and challenges. Now you’re a manager, and you need to motivate and incentivize your team to improve a myriad of KPIs that could make or break your career and company. You may have been doing this for a while, or perhaps you’re new at it.  How do you do it or improve what you’re already doing?

Feedback: Keep in mind that you and your team were conditioned for continuous positive feedback through your educational processes. We crave positive feedback because it’s emotionally rewarding. I injected the word “positive” because a note from your teacher praising your work was more desirable and elicited more renewed efforts than a negative one. Just because you’re out of school doesn’t mean that continuous positive feedback is no longer a powerful motivator to you or your staff. In fact, look at the continuous positive feedback received by those who play games online or on a specialized gaming system such as a PlayStation, Xbox, or Wii. They generate and receive positive feedback multiple times per minute.

Because anything that provides positive feedback will be repeated, it’s no surprise that employee incentive programs running longer than six months produce nearly twice the results of shorter duration programs.  Successful incentive programs do not have an end date, although they should be frequently evaluated and updated. Lesson number one is to use “continuous positive feedback.”  It’s the emotion that gets activities started. Take large activities and break them down into their smallest measurable components. Then, reward those activities continuously, as they occur; doing so will capitalize on the motivational affects that we’ve learned during the first twenty years or so of our lives. Depending upon the tasks and number of employees, this may be laborious, but the bottom line results are well worth the effort. An added bonus is that morale follows performance.

Reinforcement: Did you know that more than 85 percent of the revenue earned by Las Vegas comes from slot machines? Imagine if your HR department tasked you to create a job description for a slot machine operator. You might come up with something like this: “You will sit before a machine, drop a piece of metal into a slot, and pull a lever over and over again. The odds are that you will slowly lose all of the money you brought to work.”

Let me expand on the term “reinforcement” and precede it with the term “random intermittent.”  The magic of Las Vegas is “random intermittent reinforcement.”  It’s one of the most powerful motivators in existence when you realize the amount of money that is taken to Las Vegas and stays there. I’m not suggesting that your incentive program include gambling. It’s a losing proposition, and I also do not recommend offering lottery tickets in an employee incentive program. My point is that you have witnessed the power of “random intermittent reinforcement” when you have a reward that depends on spin-the-wheel, take a ticket from a fish bowl, or select a sealed envelope.

Lesson number two is to use random intermittent reinforcement to generate the emotion that keeps activities going. It should be utilized in every employee incentive program for every activity, not just at special times or for special events. Injecting a game with a random but controlled result in the reward process also gives additional reinforcement to the activity. Yes, your traditional top performers will remain the top earners. The primary benefit will be to improve those who are not at the top and to insure that the new hires are successful; it will also help prevent discouragement – and you know where that slippery slope leads.

The Other Two Core Tenets: Third, pay incentives immediately and separately from payroll. The more closely you tie the reward with the activity, the greater the reinforcement. The fourth tenet is to provide a choice of desirable rewards. Incredibly, one third of incentive programs produce negative results. A sure-fire way to kill an incentive program is to offer merchandise that employees see as overpriced. While not overtly saying so, they wonder why your company wasted the incentive reward they earned on something that could have been purchased on the Internet for 30 to 50 percent less. When given a choice, most employees choose to put their reward redemptions onto a Visa or MasterCard debit card – and use them for year-end purchases.

Home Agent Considerations: Having agents working from home is achieving a long overdue critical mass. While this is good news overall, there is one major loss. Home agents lose the highly motivating power of being part of a team and the feeling of camaraderie. If you are using or considering using home agents, be extra diligent about following the advice above.

Monthly Cost: What is the right amount to spend on incentives? What is the magic number that is not too much and not too little? I call this the “Goldilocks” amount because it’s just right to elicit the optimum performance improvement for the money. Whether our agents are inbound, outbound, blended, customer service, or sales, we would all like to improve major contact center metrics: schedule adherence, attendance, tardiness, sales per hour, dollars collected, first call resolution, quality scores, better data accuracy, and reduced turnover. Yet we all face the conundrum of spending too much or too little.

When an incentive program is properly designed and administered, KPIs can easily be improved by at least 20 percent when spending two hours’ worth of labor cost per FTE per month. Spending more than 3 percent of payroll does not generate incremental improvement. Therefore, the rule of thumb is the “two hour” rule. If spending $12 per hour for labor, plan to spend around $24 per month for each FTE. That produces an excellent ROI that even the most frugal CFO will heartily endorse.

Robert Cowen is with Snowfly, an Internet-based employee incentive and loyalty program. He can be reached at 877- 766-9359 x709 or

[From Connection Magazine October 2011]

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