Incentive Compensation – Behavior Matters!

Category: Incentive Compensation Page 1 of 5

Creating Your Total Rewards Budget? Think: “Culture, Trust, Communication”

Message us here or email us at behavior@lanterngoup.com for help to optimize your reward program communications & impact.  

The New Year is rapidly approaching. If you are in the IC world, the pressure is on you to formulate and calculate budgets for next year’s incentive and rewards programs. 

Like most, you need to balance: rewarding top performers, targeting the right motivators, harmonizing cash and non-cash incentives, and staying aligned with your corporate philosophy. All the while, fitting these factors into your overarching financial budgets.

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IC Managers – was your plan launch effective?

As an IC Director or an IC Manager, a lot of responsibility falls on your shoulders to drive performance, build motivation, and clearly communicate the new IC plan. 

So, your finalizing and launching your annual IC plans, but its not over yet! With the next plan period kicking off and the follwoing just around the corner, your probably wondering, how will they be received by the field? Are the communications used to deliver them effective and are driving the right behaviors amongst your sales force.

With over 20 years of successfully communicating incentive plans, we have learned a lot.

One of the most valuable lessons has been that a plan is only as good as the communications used to deliver it. If your sales team does not understand their plan then they are less likely to accept it, less like to trust it, and less likely to leverage its power to drive sales. This can lead to diminished performance and frustrations amongst the field.

Now is a valuable time to ask yourself:

  • Are your incentives driving the right behaviors in your sales force?
  • Were they communicated in a way that drives understanding, buy-in, and value?

Think of it this way: you can design the best performance jet in the world but if people don’t understand how to fly it, that jet isn’t going to get them anywhere.

It’s not too late to ensure your plans are understood. Every plan period is a new opportunity to dial your plans in towards field buy-in and increased sales. In fact – now is the ideal time to conduct an audit and see what is and is not working.

So how do you ensure that your plans are understood and that they drive the behaviors that mean success for your sales team, your organization, and yourself?

Leverage behavioral science!

Behavioral sciences such as psychology, sociology, and behavioral economics help improve organizational communication and drive both action and behavior change. These cutting-edge scientific concepts are currently being used heavily in consumer marketing with positive results – and now they are being implemented by many companies as part of their internal employee communications. Behavioral science can help you communicate your plan to drive greater buy-in, increase motivation, and get your sales representatives to change their behaviors.

At the Lantern Group, we conduct field audits to understand what the sales force thinks of the plan and how well they understand it. We also combine modern graphic design with behavioral science to help you craft IC communications that get results.  We have designed communications for thousands of incentive plans and helped many companies achieve success. Let us help you!

Email us at behavior@lanterngroup.com with the subject “Free IC Webinar” and we will set up a free 1-hour workshop personalized to you and your plans!

We will also include a free white paper that dives deeper into how behavioral science can optimize the power of your communications. Click to learn more or reach out now!

IC Directors – Make APRIL Count!

As an IC Directors, a lot of responsibility falls on your shoulders to drive performance, build motivation, and clearly communicate the new IC plan. 

While many companies have already launched their 2018 IC plans, you are heading full force into the bulk of the busy season. With April around the corner, it’s time to finalize your 2018 Incentive Plans and figure out how you will effectively communicate them to the field.

With over 20 years of successfully communicating incentive plans, we have learned a lot.

One of the most valuable lessons has been that a plan is only as good as the communications used to deliver it. If your sales team does not understand their plan then they are less likely to accept it, less like to trust it, and less likely to leverage its power to drive sales. This can lead to diminished performance and frustrations amongst the field.

Now is a valuable time to ask yourself:

  • When you launch in April, will your FY18 incentives be driving the right behaviors in your sales force?
  • Will they be communicated in a way that drives understanding, buy-in, and value?

Think of it this way: you can design the best performance jet in the world but if people don’t understand how to fly it, that jet isn’t going to get them anywhere.

So how do you ensure that your plans are understood and that they drive the behaviors that mean success for your sales team, your organization, and yourself?

Leverage behavioral science!

Behavioral sciences such as psychology, sociology, and behavioral economics help improve organizational communication and drive both action and behavior change. These cutting-edge scientific concepts are currently being used heavily in consumer marketing with positive results – and now they are being implemented by many companies as part of their internal employee communications. Behavioral science can help you communicate your plan to drive greater buy-in, increase motivation, and get your sales representatives to change their behaviors.

At the Lantern Group, we combine modern graphic design with behavioral science to help companies craft communications that get them results.  We have designed communications for thousands of incentive plans and helped many companies achieve success. Let us help you!

Email us at behavior@lanterngroup.com with the subject “Free IC Webinar” and we will set up a free 1-hour workshop personalized to you and your plans!

We will also include a free white paper that dives deeper into how behavioral science can optimize the power of your communications. Click to learn more or reach out now!

Cognitive Load – What it is & Why it Matters

Back in January we introduced you to the concept of integrating Behavioral Science into Graphic Design. If you did not have a chance to read it, or for a recap, click here

Today we will expand a bit more on the idea of “cognitive load”.
Not only is cognitive load a valuable resource to utilize in graphic design; but it is also extremely valuable in communications, speaking engagements, presentation’s and an all-around useful tool for increasing the understanding of any subject.

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Behavioral Science & Graphic Design

By pure definition graphic design and behavioral science may seem like two very different areas of study with very little connection to each other.

  • Graphic design is defined as: The art and profession of visual communication that combines images, words, and ideas to convey information to an audience to produce a specific effect.
  • Behavioral science is defined as: The branches of science (such as psychology, sociology, economics or anthropology) that deals primarily with human action and often seeks to generalize human behavior in society.

However, by utilizing behavioral science principles when practicing graphic design, the result is a more cohesive, higher quality design.

Your design not only looks good, but can increase the impact of the message you are presenting and drive the behaviors of the audience. In fact, many marketing firms and advertising agencies are already utilizing these concepts in their designs to increase the effectiveness of everything from how you shop to what you buy, how you perceive a product or idea and much more. These trailblazing concepts are shaping the world around you and by utilizing them in your own designs you can drive the level of impact you are having when you communicate to the next level.

Here are two ways YOU can start using behavioral science RIGHT NOW to optimize the impact of your designs and join the growing list of professionals who are moving toward the new standard in design.


Reduce Cognitive Load

Let’s talk about cognitive load, the power of simplicity and how it can increase understanding.

Cognitive load refers to the total amount of mental effort being used in  working memory. Rationally, we would think that the more information that a person is given, the better informed they would be; therefore they would make more sound decisions. However, this is not typically the case.

People can become overloaded with information and it doesn’t always provide optimal outcomes.

For instance, if we are trying to present the high-level concept of the 4-Drive Model of Employee Motivation, let’s take a look at these two images:

cognitive-load-1cognitive-load-2

How long did it take you to understand the concept being presented in the first image? How about the second?

The simplicity of the second allows the brain to focus immediately on what’s important.

The first image is hectic, unorganized and does not allow you to focus in on the key concepts being presented. It is important to design so that you present the most important concepts and key takeaways in an easy to understand manner that does not get lost in the ‘fluff’.

In many cases, less really is more when it comes to making sure your audience interprets the message you are trying to convey.

Think of a billboard – you are cruising by at 65 mph (well probably 80 but I’m not supposed to be promoting speeding over here, let’s focus on design and the human brain)… you are cruising by at 65 mph, you glance up to see something that catches your eye but you have very little time to interpret the message.

With this in mind, the designer needs to ensure that the most important and key message jumps out and stays with you. Ask yourself when creating your design, what do I want my audience to understand IMMEDIATELY? Design around that intent and allow the rest of the design to compliment it without taking away from the main point.

So how can you reduce cognitive load in your designs and maximize the impact of the content and messaging? Remember:

key-callouts

Simplify and reduce.
Do you absolutely need to convey that information at this time?

White space is good
Fill the page with too much information and the brain can become overloaded.

callouts

Visuals.png

 

Visually represent your ideas.
Visually representing information in an info-graphic or diagram can significantly reduce cognitive load.

 


Build Consistency and a Strong Identity with The Power of Branding

Creating a consistent brand, look & feel and color pallet within your design helps the audience link to understanding. If your design is part of a larger project, communication or campaign, utilizing a brand throughout the individual pieces creates a mental stamp for the audience to connect the pieces within that campaign.

At the Lantern Group, we have done a significant amount of work in the area of incentive compensation communications. With every client and project that we work on we start with one thing: establishing a brand and a look and feel for the campaign that we will utilize throughout every part of the project.

What we are achieving by doing this is establishing the expectation with our audience that when they see that brand their brain automatically connects it to the content and concept.

branding-and-understanding

Additionally, this can drive increased understanding – seeing that brand can help the user (often subconsciously) trigger what they have already learned in previous communications. These cues and reminders help provide a more immediate understanding of what the content will be and can lay out much of the legwork to capture the audience for you.

Let’s go back to the highway – you are cruising along at 65 mph (I’m willing to bet you think this is a wisecrack about speeding before you even read it, why? Because it feels the same as the previous comment)…

Anyways, you see a large yellow “M” – the golden arches. There is a good chance you already know what the golden arches represent without even needing to see the name of the establishment. The brand is so ingrained in your mind that the link to what you are seeing and what it represents become automatic (a strong established brand).

This same concept can be applied to communications and graphic design!

Now let’s go even further, there is also a good chance that you can remember what that restaurant will look like, what is on the menu, how the ordering process works,  etc. The cue has been planted with the yellow “M” and your brain connects the pieces.

Now incentive communications may not be as exciting as a Big Mac, a milkshake, and some fries BUT we can create that same visual cue through a strong brand and increase the power of the information we are presenting.  We are allowing our incentive brand to initiate the understanding amongst our audience every time we send out a communication.

You too can have that same impact on your audience when communicating the information you need to get across, the advertisement you are creating, or the logo you are designing by establishing a strong brand.

We hope this has helped you begin to understand the benefits of applying behavioral science to your designs. Next time you begin a design start by establishing a strong brand and evaluating exactly what NEEDS to be portrayed to reduce cognitive load so you can redefine yourself as a behavioral graphic designer.

  • Behavioral graphic design is defined as: The profession of visual communication that applies scientific principles dealing primarily with human behavior to the art of combining images, words, and ideas to convey information to an audience and drive human behavior.

Questions or comments? Use the form below or email them to behavior@lanterngroup.com

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Don’t Be A Communications Relic – Using behavioral Science to Make Communications More Effective

Over the past few years, we have seen a shift in how organizations value their internal communications.  In the past, employee focused communications were often an afterthought.  Companies would spend significant time, effort and money on developing out their incentive plans, making sure they were designed to drive the right behaviors and performance, only to communicate it to the field in an e-mail with a 30-page, single-spaced legal contract attached.

Thankfully, this is starting to change.

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A bike, some lights and motivation: what a stationary bike hooked up to an LED panel of lights can teach us about motivation!

Kurt Nelson, PhD and Ben Granlund

IMG_4449

As part of our exhibit booth at the World at Work 2016 Total Rewards Conference, we designed a method for giving away our promotional t-shirts that simultaneously acted as an experiment to help us understand what motivates people.

What we found out was intriguing and reinforces some key behavioral insights about intrinsic and extrinsic motivation, recognizing accomplishments and having specific goals.

Our process involved a stationary bike that was hooked up to a bank of LED lights1 – the faster and longer you peddled, the more lights lit up, sounds basic enough right?

The six LED light panels set up on a vertical pole that lit up from the bottom to the top – once all six lights were lit up, all the lights flashed and the process was over.

We set our process up a little differently

To earn a very cool “Behavior Matters” t-shirt, all people needed to do was get on the bike and light up one of the lights.

We did not require that people light all six lights, and we did not assign a time length for peddling to earn a t-shirt.  All they had to do was light up one light – a relatively easy process.IMG_4473

Additionally, people could get their name written on our leader board if they were one of the five fastest people to light up all the lights.  This white board with hand written names on it was updated whenever someone earned one of the top five spots.

Our original concept was to have people read one of two sets of written rules – one positive and encouraging; the other bland and discouraging.  The intent was to see if the different messages impacted how people performed or felt about the activity.  We quickly realized that our original plans were not working – too many people wanted to ride the bike and the process ended up being us telling participants the rules instead of them reading them thus invalidating the initial study.

Luckily for us, this is where things got interesting!

Results

While the original communication experiment didn’t pan out, we were still able to gather very interesting findings.  Specifically we were intrigued by some of the insights we gained into extrinsic and intrinsic motivation, the power of leader boards, and the impact that specific goals have on performance.  First, let’s look at the overall results:

A total of 103 people rode the bike over the two days the exhibit hall was open (some participants rode multiple times).  Their performance is shown in table below.

Highest number of lights lit up 1 2 3 4 5 6
# of people achieving level 1 0 6 14 34 48
% of people achieving level 0.9% 0.0% 5.8% 13.6% 33.0% 46.6%
Average time to reach level
(in seconds)
15 0 68.7 46.1 32.5 20.6

The average ride time was 31.7 seconds – with the fastest time being 4.8 seconds and the longest time being 80 seconds.   There is some obvious differences based on physical fitness here as shown by the inverse time required to reach the different levels of lights (i.e., more time on average to reach 3 lights than 4 lights, etc.) which played out in how well people did.

Insights

Do you just want a shirt or are you looking for something more? 

We needed to have an incentive to get most people on the bike.  True, there were some who just wanted to get on the bike and see how many lights they could get, but the vast majority of the people got on the bike to earn the t-shirt.  In other words, they needed an extrinsic reward to participate.

But that’s not the interesting part…

The interesting part was that only one person stopped at the first light (1 out of 103, that’s less than 1%)!  Once they were on, the majority of participants moved past the threshold for earning a t-shirt and continued peddling to see what they could do.  This was not easy – we had the settings on the bike be rather hard. This meant that peddling for more than 15 seconds was difficult for most non-athletes.

We believe once they started the activity, they intrinsic motivation of the bike  kicked in.  The lights tracked their progress immediately and they could directly see how they were doing against the goal.  They wanted to see what they could accomplish.  They no longer worried about the t-shirt – but instead, focused on the event.

 In other words, they challenged themselves to see how many lights could they light up?

They had already committed to participate in order to acquire a t-shirt (the reward) – now they were pushing beyond what was required for the shirt because of the challenge that they were presented with.  If we think about the 4-Drive Model of Employee Motivation (for more info see here, here, here) we see that the Acquire component was instrumental in the motivation to initiate the event, but the ongoing motivation was propelled by the intrinsic drive to Challenge oneself and see how they could do.

Application:

The idea of using an extrinsic motivator to entice people to participate in programs or activities that they are not excited about and then allowing their natural Challenge drive take-over should not be undervalued.  Additionally, the more that a program uses a measure of goal progression, highlighting an individual’s progress, the more a participants Challenge drive is activated.  In other words, the design of your extrinsic incentive program can impact the intrinsic motivation that is activated. Finding cohesion between these extrinsic and intrinsic motivators can certainly help drive the right behaviors.

What’s up with the leader board?

We had a leader board where riders got their name featured if they were one of the five fastest people to light up all six lights.  They did not earn any additional extrinsic reward for being on the leader board – no fancy give-away, no grand prize, not even an extra t-shirt.

So did it make a difference?

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Our new commercial

Whose job is it to motivate?

I had a client send me an e-mail the other day – with this question – “Whose job is it to motivate?”  Here is the response that I sent her…

“Whose job is it to motivate?

This was an interesting question – one that, at first glance, seemed like it could be quickly answered if I did not spend too much time thinking about it.   So I spent some time thinking on it…and like the proverbial onion, it has many layers.

A quick response would be that it is the manager’s job to motivate.   They are in charge of their team of people and one of the responsibilities that they have is to make sure that their team is doing their job.  You get people to do their job by motivating them.  As a manager, you are likely to be in control of many of the motivational levers that organizations typically use, such as performance ratings, incentive components, special role assignments, recognition and a host of other tools that are designed to help motivate employees.  As a manager, you are often the closest link to the organization that employees have – as such, you are key to ensuring that they know the strategy and vision for the company.

So the job of motivating is the managers….

Except that when you peel away another layer, and ask the question, “can a manager really motivate his or her employees?”  This comes down to a theoretical question about our ability or lack of ability to really motivate another person?  Sure, you can motivate through fear and intimidation, but those are not typically the types of motivational forces that we think of when we think of a manager (outside of the threat of firing).   The question is revolves around the idea of having someone else motivate me or do I need to motivate myself.  You can put all of the rewards and accolades in front of me, but if I choose not to be motivated by that, then is there anything that you can do to motivate me?

Think about this in another way as a hypothetical question – what would motivate you to bring great physical harm to another person?  Would any amount of money sway you to do that?  Would any type of promotion or praise get you to do this?  Probably not.  You would have to have an intrinsic motivation to be able to do this (if even that would suffice for many people).

If we go down this path, then motivation is self-derived and is ultimately the job of the employee…

However, you peel away another layer and look at the role that our environment plays in our behavior and attitudes.  For instance, we know that people eat more when their plate is larger – even if they are not motivated to do so, or more ominously, motivated to not eat more (i.e., on a diet).   It has been shown that the work environment that we are in can have a significant impact on our attitudes and ultimately our performance.  We know that people’s behavior is changed when they are presented with an incentive or reward for doing something.   Studies, as well as our own experience, show that we will work longer, harder and more tenaciously if we know that there will be a luxurious reward as the result of our effort.  This points to the fact that a company’s leadership and the culture, environment, systems and processes that they develop are key to motivation.

Taking that line of thought, it is leadership’s job to motivate…

Except they do not often have an immediate presence or interaction with the employees.  That is relegated to the manager and how those systems, environments and culture are interpreted often relies on their actual practice of them…so we are back to the manager…and to the individual…

Ultimately, it comes down to a combination of all three.  That the job of motivating is everyone’s job.  

This is not a simple matter to say that “motivation” falls within someone’s job description…it is indeed a larger issue that has its roots in so much of what everyone in the company does every day.  We know that employees are complex individuals.  That each of us is driven by different needs and different goals.  The Four Drive Model helps us put those drives into categories, but those drives are still hugely complex in their nature, and that it takes a large amount of effort by the company, managers and individuals to really motivate us to our fullest potential.

Ok – hope I didn’t get too long winded or philosophical and that this was insightful to you…

Let me know if you have further questions.

Thanks.

Kurt Nelson, PhD.”

 

How the internet took me to Malaysia

So on Friday night, around 7:00 PM, I will board a plane and fly for over 20 hours to Kuala Lumpur, Malaysia to conduct a workshop on Sales Incentive Management for a group of various executives from around southern Asia whom I’ve never met and the only interaction I’ve had with the organizers is via e-mail.

kuala_lumpur_malaysia-normal

Kaula Lumpur

And no…I did not wire them any money in advance.  In fact, they wired me money.

The saga began back in December 19th when I was busy with a number of other programs.  Going through my e-mail quickly, there was one that almost got put in the trash immediately “Trainer invite for Sale Compensation Management.”  It started out, “Dear Mr. Nelson, Good day to you.  We are pleased to formally invite you, on behalf of UNI Strategic, to be the trainer four our 2 day training on Sales Compensation Management…”   It went on to talk about what they wanted and how they “specialize in the provision of business-to-business intelligence.”  It was signed by Ramesh, Conference Producer.

Yeah – I thought it was spam as well.

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