coaching as an incentive transcript

Insight on Coaching Coaching as an Incentive Transcript

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Confidential | June 2, 2008

Coaching As An Incentive Transcript

Time Speaker Transcript

00:21 Tom Floyd Hello everyone and welcome to Insight on Coaching.

Insight on Coaching explores the many facets, flavors and sides of the emerging Professional Coaching field.

I’m Tom Floyd, I’m the CEO of Insight Educational Consulting and your host for today’s show.

Well this week our topic is Coaching As An Incentive.

We’ll provide a big picture overview of how incentives and reward programs are being used within organizations.

We’ll talk about the types of incentives being used, as well as some of the challenges that come up in implementing incentive programs.

And most importantly we’ll talk about how coaching is being used as an incentive within many organizations.

With me to explore this topic today are four guests, and let me give you a quick overview of who we have with us today.

Our first guest, Dr. Thad Green is a tenured management professor and nationally known expert on employee motivation and performance.

Thad is the president and founder of Thad Green Partners, is a management consultant, and has also been a professor at the University of Georgia, Auburn University, Mississippi State University and Emory University.

He is also the author of 13 books on the subject of performance and workplace motivation, and his latest book is Motivation Management shows managers how to motivate employees to perform better.

Welcome to the show Thad.

01:32 Thad Green Thank you.

01:32 Tom Floyd Our next guest, Doug Jensen is the VP and National Executive Compensation Practice Leader of the Hay Group.

Doug has 37 years of experience in all facets of human resources with many years with reward and benefits, including being the Director of Compensation and Benefits at the Pillsbury Company.

He is also the co-author of the Hay Group’s The Manager’s Guide to Rewards: What You Need to Get the Best for – and from – Your Employees.

Welcome to the show Doug.

01:58 Doug Jensen Thank you.

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01:59 Tom Floyd Our next guest, Roger Stotz, is a Vice President and Managing Consultant for St. Louis-based Maritz Inc.

As a Certified Compensation Professional, Rodger is a faculty member for World@Work, and is on the Board of Trustees of the Incentive Research Foundation, also serving as the current Research Committee Chair.

He also chairs the Research Committee and serves on the Board of Trustees for the Forum for People Performance Management & Measurement at Northwestern University.

Welcome to the show Roger.

02:26 Roger Stotz Tom, thank you. Good to be with you.

02:27 Tom Floyd Good to have you here.

And our fourth guest, Alex Tabibi, is the CEO of Perks.com.

A former Oncologist, Alex founded Perks.com having recognized a need for online incentive management from his position as president of ZCapital.

His scientific background and interest in the fundamental principles of the psychological aspects of rewards on behaviors has been influential on The Science of Motivation Platform. .He has been profiled in Forbes, Inc., Business Week, The Los Angeles Times, The Los Angeles Business Journal, and other major news outlets.

Welcome to the show Alex.

03:00 Alex Tabibi Thank you for having me.

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03:02 Tom Floyd Well to set the stage as we always do, I’d like to share some data that our research team pulled together.

In a 2002 study by the Incentive Research Foundation, a look at the $27 billion incentive industry found that “incentives are more important than ever in motivating employees.”

According to the Society for Human Resource Management’s 2005 Rewards Program and Incentive Compensation Survey Report, an overwhelming majority of HR professionals say their organizations offer a monetary or non-monetary reward program. To highlight a few interesting findings from the report:

More than two-thirds of organizations offer a variable bonus based on company or individual performance. Of these, about one-third offer an additional bonus if an employee or a group surpasses the incentive compensation criteria.

Reward programs are most effective when employees are well aware of their existence and when they are reviewed frequently enough to keep up with the organization's evolving needs. However, almost one-third of HR professionals indicate their organizations never remind employees about the nomination process for reward programs, and more than one out of five indicate that their organizations never formally review their employee reward programs.

Although HR professionals rate monetary reward programs as more effective overall, non-monetary rewards tend to cost organizations less and are easier to implement and explain to employees.

All types of reward and incentive programs are rated as being the most effective in motivating top performers. But a large number of HR professionals say these programs are not at all effective in motivating underperforming employees to improve their level of achievement.

Doug, I’d like to start with you.

Can you set the stage for us in terms of the current “state of the state” of rewards and incentives programs, and how their use has evolved over the past several years?

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05:04 Doug Jensen Sure, I’d be glad to.

I think that what we have seen, as you stated in some of the information your research team found, is that incentive compensation has become a much more common approach to providing more effective rewards to employees.

More companies are putting them in and they’re putting them in not just at the executive level, but driving them down into the organization.

And having said that, I think one of the things that we’ll probably want to talk about quite a bit is that these are difficult to manage.

And as often as not, if the right measures aren’t put into place to be sure that they’re well managed, you’re going to get results that you didn’t expect.

05:51 Tom Floyd Has it been that over time, they’ve just gotten more and more complex as more types of benefits and rewards and things like that have been added?

06:02 Doug Jensen That’s certainly true in some cases.

Although I think one of the principles that many, at least compensation professionals, particularly those that Roger and I work with in the World at Work organization, really believe, is that one of the prime objectives of an incentive plan is to keep it simple.

Because if you don’t do that you’re going to have a very difficult time communicating to the participants what’s expected of them, how the plan works and how they can actually drive their performance to improve the end result.

And so I think while complexity is an issue, it’s probably a bigger issue when you’re talking about executive plans and executive equity plans.

But on the annual incentive program, I think more and more companies are trying to keep those just as simple as they can. So that they’re clear.

06:55 Tom Floyd In terms of the average person out there, would you say their expectations are the same regardless of whether the company is a small business, a medium sized business or a large Fortune 500 or 1000 corporation?

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07:23 Doug Jensen It would probably depend on the position that they’re applying for.

Certainly if they’re in the middle management ranks or high level professionals there’s going to be widespread use of incentive compensation.

Maybe not as frequently at the very small organization where they may not have the ability to put in programs like that.

But it’s pretty common now and people will be bringing with them expectations that part of the package, the total cash package, will have an incentive element.

07:54 Tom Floyd Okay. Thad, what were some of your thoughts on the data points from the SHRM Survey, when it indicated things such as HR professionals rating monetary rewards as more effective overall than non-monetary rewards?

08:11 Thad Green One of the things I think executive coaches want to keep in mind as they’re working with their people is the fundamental principle of motivation. Everybody is different.

And what’s an incentive to one person may not be to another.

What motivates one doesn’t motivate another.

Like if you’re going to open a shoe store, you wouldn’t open the store and stock it with just one size shoe. Because one size doesn’t fit all.

So I think the word of caution whether we’re talking about financial incentives or non-financial is everybody is different and we need to take that into account as we’re designing those plans and as we’re implementing them.

08:56 Tom Floyd So in terms of how to come up with that best or optimal balance since different things are going to appeal to different people, what’s the best way that companies are doing that right now?

Is it spray and pray?

Just kind of putting much different things up there?

Is it doing surveys on things like that internally to figure out what people are looking for?

What’s your take on that?

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09:21 Thad Green Well my experience is that when we really go back to the basics we come out ahead.

And if managers would simply ask their team members what it is that motivates them.

And if you want to know what will motivate a person to get them to work hard and perform better, if you want to know, ask.

And it’s such a simple thing but sometimes managers just forget to do that and play a guessing game rather than going straight to the person who knows what will move them and motivate them to do a better job.

So overall it’s just a very simple basic approach of each manager taking time to find out what the needs of the employees are and what will motivate them.

10:09 Tom Floyd Now Roger, according to another part of the survey that focused on the effectiveness of rewards and incentive programs on motivating employees, in terms of improving effectiveness, respondents within the survey indicated the programs had an effect on facts which included motivating top performing employees to continue a high level of achievement, achieving organizational goals, improving employee morale, retaining top performing employees, recruiting new employees, motivating under-performing employees.

In your experience how effective are rewards and incentives on motivating top performing employees as an example?

10:51 Roger Stotz Well I think, a couple of things.

One, there is an expectation in most cases for top performing employees to receive some type of additional rewards.

So one of the areas in terms of motivating them is almost the reverse of not de-motivating them as top performers and seeing the results they’re achieving and the feedback they’re getting regarding performance.

Many top performers are actually de-motivated if they don’t have something that shows for it.

So I think that’s an interesting reversal I think that we have to be aware of.

Secondly, I think that in terms of what we’re seeing is that there is an expectation that top performers are going to have the ability to earn and go after it in that vein.

So very much, I would say that my experience is indicating that one, they’re motivated by it, they expect it and frankly get de-motivated if it’s not there.

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11:54 Tom Floyd What were some of your thoughts, I know one of the findings from the survey indicated that rewards and incentive programs had no effect at all on motivating under-performing employees to improve their overall level of achievement?

Is that something that you found as well?

12:14 Roger Stotz I do not find that unusual and yes it happens.

But here is part of the rationale that we’ve seen that causes that.

Many incentive programs are established and designed for over and able or exceptional performance.

And for example, if someone is saying that we’re going to reward on how big are sales, for example, which is maybe more common, but we’re going to send the top 10% of the sales force on a trip to Hawaii.

And so as they perform the top ten will go. The challenge with that is that the under-performers, as you’ve described it, or in many cases the bottom 60%, 70%, 80% are not impacted by “that incentive” because they, after a short period of time realize that they’re not going to be in the top 10%. And once that realization occurs that incentive has no impact on them.

13:08 Tom Floyd What do you think, it’s funny you bring up sales as an example, I just literally last week heard of a funny story.

But I guess it was a bit disturbing as well.

A friend of mine works for another company. For their sales meeting, the top 10% of their sales force got put on this really extravagant bus going to the meeting. I mean it had everything.

The middle performers were on just an average bus. I don’t know if it had quite all of the perks that the other bus had.

And the folks that were in the lower 25% rode a different bus where they had to walk six to eight blocks just to get to the bus. It didn’t have any alcohol or food or anything fun at all, and wasn’t glamorous.

At first when I heard it, I thought it was kind of funny hearing that. But then when I thought about it, I thought there’s a part of that that could be kind of disturbing too.

When companies do things like that, is that helpful? Is it motivating?

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14:04 Roger Stotz Well in that particular case I can’t respond not knowing that particular case, but my general reaction would be it really depends on the culture of the organization and the message that they’re trying to send.

One of the things we haven’t spoken about yet, and I’m sure we will is that incentives, rewards, recognition sends some fairly strong messages of what’s important in an organization since you’re identifying what the organization is willing to hold up as exceptional performance and what they desire.

So obviously that example that was given about the three different types of busses is sending some fairly strong messages.

And in a position where it’s been outlined ahead of time where this is what we’re going to do and this is going to be your reward or penalty, it might be appropriate.

On the other hand it may be a way that really demoralizes your bottom 25% to the point where if they are people you are trying to retain in wanting to “motivate to a higher level” you might find out just the opposite and they actually end up leaving and saying “I don’t need to be humiliated or treated this way. I’m leaving.”

15:16 Tom Floyd I can tell you if was a salesperson it would stress me out because I’d want on that good bus.

Well Alex, based on hearing the list about the impact of rewards and incentives on employees, what are your thoughts or what are some of the things that you would add?

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15:31 Alex Tabibi Well I think that the conversation so far has been very interesting.

It really brings up many, many things that we deal with on a daily basis frankly.

That includes things that people do correctly and the things that people do, in our opinion, not the right way.

I do have to agree that of course it depends on the organization very much, specifically on what areas you’re trying to motivate.

So sales people do act very differently than others.

What we believe very much is that the reason we are in the business we’re in is because we believe in using technology as much as possible to drive incentive management. And what we’ve found, which addresses some of the problems, are basically taking mass customization and introducing it into the incentives base.

So what we do, for example for a Fortune 500 company, is for their sales teams, we actually completely individualize their rewards based on their individual and previous and how they’ve done previously.

For example, if there’s a Widget A that they’ve been selling at a certain rate, we don’t take the average of the entire sales force and expect everyone to achieve that average or that increase in order to achieve the goals that they’re supposed to be getting.

What we do is, for example, we set a goal of 20% above your own baseline.

And what happens then is each individual finds that that goal is attainable.

It’s also correct that the top performers almost perform irrelevant of what is given to motivate them because they’re motivated internally in large part.

But because they are high performers, they can get up and leave and go anywhere else they wanted.

So you do have to keep them motivated, just so that they’re happy.

17:32 Tom Floyd So it’s almost like because they are already the cream of the crop and already have those internal motivators and drive to really succeed, that regardless of if there are formal or informal rewards in place, they’re still going to lean towards performing in that manner.

17:52 Alex Tabibi Correct. Some people do well irrelevant.

17:54 Tom Floyd Okay.

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17:55 Alex Tabibi And you have to keep them happy obviously.

But then you’ve got the people at the very bottom and if you can increase—in fact we—our data shows that you get a lot more bang for your buck if you concentrate in the middle quartiles.

18:11 Tom Floyd Well I hate to interrupt you but I’m hearing the music for our first commercial break. Let’s go ahead and go on pause.

Stay tuned everyone, more from Insight on Coaching when we return.

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20:46 Tom Floyd Welcome back to Insight on Coaching, I’m Tom Floyd.

Today the topic is Coaching As An Incentive.

With me are Thad Greene, Management Consultant, Professor, and Author 13 publications including Motivation Management, Doug Jensen, VP and National Executive Compensation Practice Leader of the Hay Group, Rodger Stotz, Vice-President of Maritz Inc, and Alex Tabibi, CEO of Perks.Com.

Well for those of you who are just joining us, in the first part of our show we set the stage in terms of the big picture and the overall impact that rewards and incentive programs are having within organizations.

I’d like to continue our conversation today by talking about what these rewards typically look like and some of the challenges that can come up in managing both the programs themselves as well as employees’ perceptions of various rewards and incentives.

Here’s some more data to set the stage:

According to Special Events Marketing magazine, “A company's superstars deserve super events – Cash is no longer king when it comes to motivating employees. An increasing number of corporations, from consumer products giants such as Coca-Cola to BIO-tech firms such as Centocor, are rewarding their top performers with once-in-a-lifetime events and experiences.

Additionally, the most recent statistics from the Society of Incentive Travel Executives show that, “American businesses are pumping $22.5 billion into the economy annually with incentive-travel and -event programs that reward employees for outstanding work.”

According to the Society of Human Resource Management 2005 Study that I mentioned earlier, monetary incentives typically include incentive compensation plans (69% [variable bonus based on company or individual performance], year-end bonuses (55%), new-hire referral bonus (50%), sign-on bonus (40%), profit sharing (36%), and spot bonuses (35%).

Non monetary rewards include things like specific reward programs: “Employee of the Month” or similar recognition (36%), non-cash, company wide performance rewards (34%), stock options (34%), safety achievement rewards (29%), extra days off (29%), educational achievement rewards (21%), suggestion box submission recognition (18%).

Now Thad I want to turn to you first. What’s your reaction to this list?

Is this pretty inclusive? Does it sound like anything’s missing?

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23:01 Thad Green Well I keep wanting to go back the point that everybody is different.

And when you look at the superstars and giving them special events and special travel, we have to keep in mind that everybody doesn’t like travel.

Some people don’t like to get on planes.

Some people have parents who are aging and they can’t travel.

So if we’re building incentive plans around one kind of event for people then that’s going to really motivate and stimulate certain people to perform better.

But it’s not going to have the desired effect on others.

23:40 Tom Floyd What are everybody else’s thoughts in terms of the list?

Does it seem like that includes everything?

Are those the types of incentives and rewards that people typically think of when they think of a rewards and incentives program?

23:53 Roger Stotz Tom, this is Roger.

Let me say that one of the trends that we’re seeing is still comes in line with that Thad’s saying and that’s personalization. And people wanting choice.

We’re seeing the employee taking on the same kind of attributes as the consumer.

And today’s consumer has a tremendous amount of choice in the marketplace.

And that same need or desire or expectation for choice, we’re seeing coming into the workplace and there is an expectation that they will be having a broad choice.

So one of the things, and it builds on what Thad said, is to give people a choice so that they select.

And we know through psychology that when someone selects the reward themselves they put more value on it even though it may be of the same “monetary” value, the psychological value goes up.

The second issue is we’re seeing much more moving into various types of awards, like experiential awards.

People who may not even know this was available who all of a sudden see they have a choice to attend American Idol as a show, and they can get tickets to it and those can be provided.

We’re also looking at things like pets. People have many more pets today and we actually had seen some people wanting matching jewelry, they and their pets have the same jewelry.

On the opposite end— [Interposing]

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25:28 Tom Floyd Really.

25:27 Roger Stotz —is geopolitical tensions where people are saying I would like to select a generator or security system.

So it just gives you a flavor of how diverse this is as well as the many typical ones in terms of dining out or merchandise items.

25:43 Tom Floyd So are those types of merchandising examples and thing likes that, are those things that companies would offer everybody?

Like that’s listed as part of their programs? Or is that kind of if a manager knows what each of his or her team members values, that he or she would individually say, “hey I know that if I get a gift certificate for a Boutique Pet Shop or something for one of my employees that’s going to mean more than if I just give a Starbucks card to her.”

26:14 Roger Stotz Right. In answer to your question, I’ve seen both.

One, where there is a broad selection which those types of awards would all be included and the employee actually chooses based on their earnings, if you will, in the incentive program.

And I’ve also seen other organizations where managers, following up on our conversation earlier, where they’ve actually done the due diligence of listening to what people really value and what they would find motivating, coming back and saying “here I’ve got a certificate for the particular item you were talking about. Enjoy.”

26:47 Tom Floyd Any thoughts from anyone else?

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26:49 Alex Tabibi Yeah. This is Alex Tabibi.

In our case we provide a point-based system for the most part which then allows the individual to choose whatever they want within their point range that they’ve achieved.

So we have as many as 5,000 products in a catalog and many of those are actually gift certificates which obviously allow millions of choices with added up.

For example, for pets, we have dog.com certificates; we have Amazon certificates if you want books or electronics. So the choice is there.

And I think that you’d be surprised at the range of products indeed that people do look for and which they’re interested in.

Also in regard to travel, I would also like to add that some companies that we’ve dealt with have got the same program.

Like they take 200 people to the Caribbean every year.

And frankly it’s the same people winning over and over again, which we were discussing in the first segment.

So what you’re actually seeing is people not necessarily wanting to go on those trips again for the fifth time with all their colleagues.

They’d really rather have a plasma television or a generator, as was mentioned previously.

So I do think the choice is very, very important.

28:12 Tom Floyd So it’s almost like the points programs being used are almost similar to the points programs being used successfully by hotels like Starwood?

Companies are starting to take that same concept and use that internally also?

28:29 Alex Tabibi Absolutely.

28:30 Tom Floyd Interesting.

A question for everybody, why don’t you think we heard coaching as an item in that list of non-monetary rewards?

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28:45 Roger Stotz Well, this is Roger.

What I’m seeing is that’s an emerging, and I think one of the areas that’s driving it is that the new employee, the employees of Gen-X and Gen-Y, are very much motivated, are very highly motivated by developmental opportunities.

And the whole issue of coaching has started to emerge as an issue at that point.

The second area that we’re seeing is coaching coming into leadership and management development.

And there again as people see a personal need to increase their skill level, to accept a new position or something, they’re asking for can I get coaching.

And some organizations are actually saying “we’ve got a number of people who may be eligible or could be promoted and you can earn this through an incentive program and get coaching and personal instruction.”

29:42 Tom Floyd So I’m just going to recap.

One, it could be because now that it is becoming more of a trend, so to speak, people are asking for it more, it’s more important to Generation X and Generation Y and also seeing coaching—because it still is an emerging field for many folks.

And in terms of getting used to it and comfortable with it, it’s fitting in more within succession planning and leadership and management development and things like that.

30:12 Roger Stotz Absolutely. And another term you have that is very similar is mentoring.

30:16 Tom Floyd Got it. Yes one of the ways that I try to differentiate that, it’s come up on our show several times before, but mentoring being more informal and coming from somebody who’s been there and done that internally in the company, within the job. And then coaching being somebody who’s not necessarily done the job but could be a full-time or external person who really comes in and helps focus on—[Interposing]

30:39 Roger Stotz Absolutely.

30:39 Tom Floyd —specific goals and things like. Would you concur with that definition?

30:44 Roger Stotz Yes.

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30:45 Tom Floyd Okay.

30:47 Doug Jensen Tom, this is Doug.

I actually believe that coaching is not an incentive in most organizations today.

It’s really part of leadership development programs where it’s really expected, particularly by the high performers, but by also everybody that gets to certain levels in management, that they really believe that one of the most important things that the company has to offer is the opportunity to grow and develop and to move up their career paths.

So it’s almost a disincentive if you don’t have it.

31:19 Tom Floyd A disincentive to not have coaching.

31:21 Doug Jensen Right.

31:23 Tom Floyd Got it. Any thoughts from anyone else?

31:26 Alex Tabibi This is Alex.

We actually, for ourselves, have made coaching an ongoing education apart from the bonus plan for many of our employees so that when they arrive at six months or a year from when they’ve started, they actually are guaranteed to be educated in their area of specialty.

And we found that is a great advantage when we’re hiring people.

31:58 Roger Stotz Yes, this is Roger.

I would add one more thing and concur with the other speakers.

But I would add that in some cultures, in the past coaching has been used to help out managers or leaders who are in trouble.

32:14 Tom Floyd Right.

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32:14 Roger Stotz And so you have to be careful that you change the culture that says if someone is starting to get coaching and you’re just introducing that in your organization, it’s seen as a positive, as something special, rather than is a remedial application.

32:31 Tom Floyd You know it’s amazing that theme has come up on our show. That consistently comes up time and time again.

But companies have really learned from introducing coaching programs to make sure people don’t view it as a “fix-it” solution. That they view it as a growth solution and as a development solution.

Well I want to refer back to another part of the SHRM survey.

And I want to spend some time talking about the section that focused on challenges of implementing employee reward programs.

And according to the survey, some things listed in terms of factors that were classified by respondents as either being very challenging or somewhat challenging when it came to rewards and incentive programs, 69% indicated that having insufficient resources to truly rewards star performers was a challenge, 74% indicated that employees were feeling resentful that they do not get rewards, so some that didn’t get rewards felt that that could be a challenge.

For 62% deciding who among nominated or eligible employees will receive a rewards, 46% funding the reward program, the list goes on and on from there.

Doug, are these some of the typical challenges that you’ve seen as well?

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33:46 Doug Jensen Oh yes. They really hit the nail on the head.

I think one of the problems is a lot of companies are finding it difficult to fund these programs.

You can’t really put an incentive plan in as something extra any more because cost management is so important.

So you’ve got to figure out how to blend it into the mix of compensation that you already have.

So if all you have is base salary, then you’ve got to be willing to address whether you’re going to reduce the base salary over time or at least hold it flat while you introduce incentive plans. And so insufficient resources is a big one.

The other thing that they mentioned was those resentful when they didn’t get it, that’s part of the importance of making the objectives of the program very clear and the rules of the road very transparent so that people understand how it works and what measures are going to be used and how they’re going to be applied.

The “haves” and the “have nots” is an issue with incentive plans all the time because you really are trying to differentiate and so you better be able to back it up with criteria that are meaningful.

34:53 Tom Floyd So in terms of some of the funding and costs things that you mentioned, I’d think that probably all these things factor up into the hourly cost, daily cost, however they calculate it, of what each employee costs the organization.

Are those some of the things that they’re looking at in terms of really figuring out “okay how much funding can we really allocate to this?”

35:10 Doug Jensen Yes.

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35:12 Roger Stotz Yes I would add to that, Tom, regarding the funding.

When you look at incentives they should be for above and beyond or something above normal.

If you’re looking at a sales, again, which is an easy example, is you’re looking at providing an incentive generally for performance above quote or some previous performance, as was mentioned before.

And there should be a cost relationship to that so that you can say “I’m willing to provide X incentive for a Y performance.”

And the Y performance more than offsets that X percent of the percentage of the incentive.

And I think one of the things that happens is sometimes the design process gets lost and people aren’t looking at the financial impact of the improvement and then the financial impact of the incentive and that’s where they end up missing out on having adequate resources.

36:06 Tom Floyd Got it. Thad, anything that you would add?

36:09 Thad Green Yes, Tom.

I was working here in Atlanta with a customer care group recently and when we were bringing up the subject of cost of these programs, there actually is a no-cost way to give people an incentive to perform better.

I’ve seen this for years and years. If you ask the employees what it is they want they will say things like “I’d like to have more time with my manager. I’d like for my manager to communicate more with me or listen to me or to value me more, respect me more, to accept me.”

Sounds almost like a married couple in counseling, doesn’t it?

36:52 Tom Floyd [Laughs]

36:53 Thad Green But.

36:5 Tom Floyd Honey, you’re just not home enough for me.

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36:57 Thad Green One of the big issues that people have, is that there’s a lot of discontent in the workplace because they’re not treated as well or in the way that they want to be.

And it doesn’t cost any money at all for a manager to make some minor alterations in the way they work with employees so that they actually get people to work hard and perform better, just by managing a little bit differently and a little bit better.

And part of this, I think, has grown over the years because there’s so many dysfunctional families out there.

And people are starting to turn to their jobs for meeting needs that aren’t getting met elsewhere.

37:43 Tom Floyd Interesting. Well let’s go ahead and go on pause.

I’m hearing the music for our next break. Stay tuned everyone.

More from Insight on Coaching when we return.

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40:26 Tom Floyd Welcome back to Insight on Coaching. I’m Tom Floyd.

Today the topic is Coaching As An Incentive.

And with me are Dr. Thad Green, Doug Jensen, Roger Stotz and Alex Tabibi.

Well in this last segment of our show, I’d like to focus specifically on coaching as an incentive.

Now in presentations at the Society for Human Resource Management’s EMA Annual Conference in Washington, D.C in 2004, in talking about the impact of Rewards and Incentives on employees, Bill Erikson Vice Chairman of Kenexa, a Lincoln, Nebraska-based HR consulting and recruiting firm identified six drivers of engagement that employers can influence with employees:

Involvement and belonging. Helping employees feel cared about and part of a team. Relationships matter, and managers can forge them without surrendering their need to maintain objectivity in matters such as performance evaluations.

Future vision. Most people prefer working for a cause then a company. Even mundane jobs should have a mission that can provide motivation beyond a paycheck.

Leadership trust. Employees respond to leaders who earn their trust by being honest and overboard in their behavior.

Communication. Employees won't hear unless they feel they're being listened to, no matter how professionally you handle top-down communications.

Recognition and rewards. Remember effective recognition is in the eye of the beholder. Some employees beam when asked to stand and be praised; others are embarrassed and would respond better to a symbolic token of esteem.

Growth and development. Taking on challenges and stretching promotes engagement, but the challenges should be suited to the individual. Pressing employees to exceed in areas where they're talents don't lie is a recipe for creating frustration, which can actually decrease their productivity and work quality

And Roger, I’d like to start with you.

In terms of how coaching can be beneficial in terms of helping employees feel more cared about and really belonging within an organization, can you speak a little bit more to that?

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42:53 Roger Stotz Yes I believe one of the techniques that we’ve seen used in some organization is a simple approach called GROW, that talks about a process that coaches have used to establish the employee’s goals for the G.

R is really check into reality.

O is then determine some objectives that they need to achieve.

And then do a Wrap up and sort of say whatever are next plans.

And the result of that, in fact in some of the conversations that we had earlier in this hour, it made the employees feel like the manager and/or the coach who’s ever doing this is actually working with them to help them achieve their, the employee’s objectives, not just the company’s objectives.

And it also helped to connect with some of the things that you just mentioned in terms of mission.

It helped to improve leadership trust because here you had the manager working closely with the employee and on their behalf.

And it opened up those communications channels as you talked about because here you have a coach or in this case a manager listening rather than just telling and directing.

So I think a lot of what you just mentioned relates very closely to what we’ve seen work.

And this model has been used and used effectively.

44:10 Tom Floyd So it’s really helping, coaching in this case, is really helping employees feel like they have more of a voice, more of a say.

That people are really listening.

44:20 Roger Stotz Absolutely. And one of the things that was interesting, I have some psychological studies about motivation, is that one of the areas that employees look at first is “do I feel supported by the organization.”

If you’re telling me I have to achieve something and we have to work harder and do something more and produce more, whatever, one of the questions is “well are you as an organization and my manager going to support me?”

And the coaching really does make that come to life and demonstrate that “yes the organization, the boss, is really trying to support him.”

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44:49 Tom Floyd So that almost sounds like that relates to that other theme that I mentioned, too, about really helping employees feel like the company cares about them.

That they really belong within the organization, too.

44:57 Roger Stotz Absolutely.

44:58 Tom Floyd I want to open that same question up to the rest of the group.

Any examples the rest of you would add?

45:06 Thad Green Tom, this is Thad. I have an example for you.

I went from here in Atlanta where I live up to Philadelphia to work with, do some coaching with a group of about 100 salespeople.

I was doing coaching with the sales managers.

And one of the things that we decided to do there was have the employees attend some of the coaching sessions and the employees were actually giving some feedback to the sales manager and they were jointly working to get together to figure out better ways to work more effectively together.

And this was a sales organization that had been meeting 1 of 16 sales goals for months.

They were certainly in trouble.

And 3 months after these coaching sessions, they were meeting, this group in total, was meeting 15 of the 16 monthly goals.

So it just shows that the power of coaching and especially when you involve employees then in ways that show the employee that the company does care about them.

46:20 Doug Jensen Thad, I’d like to build on that.

I don’t know of you’ve seen the study by the Sales Executive Council in 2003; they did a study about shifting the performance curve and exporting high performance sales disciplines to the core.

And they looked at coaching in the sales environment and they found that where the sales people had at least three hours of coaching per month by their manager, their revenue per rep increased by 25%.

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46:50 Tom Floyd Wow.

46:50 Doug Jensen And it was interesting that less than three hours it started to fall off but more than three hours in this study, it did not go up.

And the final thing they saw was that coaching not only improved that core, that middle 80%, but it also improved to some degree the top performers also, not to the same degree, obviously because they’re already top performers, but it actually did improve their performance also.

47:16 Tom Floyd Do you think that coaching as an incentive appeals more at the executive level to folks, so that if that’s back to what we talked about in terms of how you really have to make sure what you’re offering as an incentive appeals to people, that it’s something that they really want and value?

Do you think it appeals more to folks in management or in executive roles?

I think there’s definitely a perception around that from my own perspective but in hearing the example Doug that you just shared, I think it can really appeal to individual contributors or middle managers, particularly in sales, for example.

The example you just used was fantastic.

I could definitely see where it would appeal because you feel like - I’ve been in sales before for example - and you’re out there and one of the things you just want is somebody to vent to and talk to, and you know you’re dealing with a customer who’s not responsive and you’re trying to get in and they’re killing you and you’d really want some guidance around that.

So you’re yearning for that.

That would provide immense value in that case at that level.

48:12 Doug Jensen Tom, I really agree. I think that maybe a difference is that at the executive level the expectations are often that the coach will be an external coach.

Somebody outside of the company, a professional coach.

But at other levels, many of our clients are putting internal coaches in place, more than just mentoring, but they’re actually making it part of sometimes their own incentive measures is how well they actually coach their employees and help them through their own growth and development.

48:50 Tom Floyd Thoughts from anyone else? That’s a great point.

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48:53 Thad Green Yes. Tom this is Thad again.

What seems to be happening over the last few years is that coaching is becoming more and more respected at the higher levels.

And my experience is that when you bring coaching down to the lower levels it just sends a wonderful message to those people that they are important, that they— [Interposing]

49:12 Tom Floyd Yes.

49:12 Thad Green —do count. And they tend to really respond extremely well with it.

49:17 Doug Jensen And I like to, Tom, add another comment regarding the intersection of incentives and coaching.

One of the techniques that we’ve seen used very effectively is having managers; again we’re not talking executives now because I agree those are usually outside coaches, but having managers at the mid and lower levels and particularly sales managers to actually use the incentive program as part of the discussion in coaching.

And the phrase that we use is “how can I help you, my employee, to achieve your incentive awards?”

And so all of a sudden what I’m doing as a coach and manager is I’m trying to work with you and give you support in activities and insights in terms of how we can get you the award you’re after, whether it’s a cash award or it’s the trip or it’s some other unique item, we’re all on the same team.

And that’s seen as very helpful rather than the manager coming in and saying “you didn’t achieve your metrics. You’re not doing what I need you to do. You’ve got to get higher.”

And so the whole concept is turned around and the incentive becomes a great vehicle to talk about it.

50:24 Tom Floyd So in terms of how it’s used as an incentive, in that case the incentive for the employee is having their manager really work with them and coach them and serve as their internal coach.

And then it also sounds like coaching is important as a skill for managers then, in terms of making sure they’re positioning incentives, and talking about rewards, and having this conversation from the right perspective.

50:48 Doug Jensen Absolutely.

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50:49 Tom Floyd The study I mentioned indicated one of the drivers of engagement for employees was feeling like they were working for a cause.

Do you think that coaching can help with that?

Particularly internally, if we’re talking about managers themselves being coaches for example.

Can that really help employees feel like “you know what, I’m not just coming in here and working from 9:00 to 5:00 and checking out, getting my paycheck. I’m actually working for something that I believe in.”

51:23 Doug Jensen Well there’s a couple of things.

First of all I think overall I would agree and I’ve seen this time and again where organizations that really look at creating the higher purpose have a tremendous advantage in terms of connecting and engaging employees.

And to the study you referenced the employees are looking for doing not just the work but doing purposeful work.

And one of the things that we’ve seen again in coaching is making sure that people understand that the five key questions that every employee is going to ask, whether they ask it to you or they are just thinking about it, what is it that you want me to do; why is it important.

And that’s the second question that’s often missed, why is it important?

And that goes to not only the importance to the business but to the higher cause.

How do you want me to do it is the third one.

How will I know how well I’m doing, in other words how will I be measured?

And then what’s in it for me, what’s going to happen, whether it be in terms of just feeling appreciated, feeling success or actually having an incentive.

Those five questions are critical.

And one of them that gets left out is “why is it important?”

52:30 Tom Floyd Yes, that question totally fascinates me.

I’m amazed at how many times when I’m on an engagement with a client or talking to people too, and I ask them, for example, to explain what they do.

I’ll ask because I’m trying to figure out a job process or something like that.

And then I ask them the question “so why do you do that?” and they’re like, “I don’t know.”

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52:49 Doug Jensen Yes.

52:49 Tom Floyd I don’t know, it’s just part of my job. [Chuckles] and I think, “huh, interesting.”

52:54 Doug Jensen Right.

52:55 Tom Floyd Alex, anything that you would add to any of this?

52:58 Alex Tabibi I think that the discussion is excellent but in terms of coaching we recently had a client that we were engaging and we asked a very simple question which was of the employees that we looked at those that mentored their employees and those that didn’t and was in the same company, we found that there was two to three times the attrition in those groups that felts like they weren’t mentored.

So it just shows the importance of that in terms of retention itself.

I think that the coaching is very important because it makes people feel like they have an opportunity to rise within the organization.

And it gives them the confidence to continue to educate themselves and to push themselves further.

53:51 Tom Floyd Well huge thank you to the four of you today.

And as always a huge thank you to our listeners as well.

For more information about our show, you can look us up on the Voice of America Business Channel, you can visit our website at www.ieconsulting.biz and you can always feel free to drop me an e-mail at [email protected].

And don’t forget the podcast version of this show is available on Apple iTunes.

Open up iTunes, go to the iTunes store, click podcasts on the left side of the screen, and just enter Insight on Coaching in the search field.

Thanks everyone, we’ll see you next week.

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