Numerous studies have clearly shown that successful employee engagement programs contribute to improved business outcomes. According to the Russell Investment Group, “From 1998 – 2010, companies listed on Fortune’s 100 Best Companies to Work For returned three times the value to investors as the rest of the stock market.”

It makes sense that engaged employees will make a difference in a competitive marketplace by increasing productivity, inspiring innovation, and delivering best results to clients and consumers.

While numbers like these are encouraging, the reality is that companies face formidable challenges in workforce engagement. In July 2013, the Incentive Research Foundation released a report that found that an astonishing 71 – 78% of workers in the U.S. reported that they are “not engaged” or “disengaged.”

5 Key Steps to Strong Program Design

With these thoughts in mind, it’s imperative to design engagement and recognition programs that have a strong foundation based on strategic objectives and that include key steps along the way. Here are five key steps to consider when designing your program:

Step 1: Build a Strategic Foundation

It’s crucial to gain clarity and agreement up front on the goals you are trying to accomplish. Which behaviors are you trying to encourage? Are you trying to reinforce corporate values such as customer service or innovation, or are you trying to provide incentives for sales during a slow-selling season? Set a time frame and be sure you have the resources and executive buy-in you need to ensure success.

Step 2: Assess the Situation

“Understand the playing field in which your audience works,” says  Roger Stotz and Bruce Bolger in the Incentive Marketing Association’s Principles of Results Based Incentive Program Design.  Be sure to take a holistic view of the organization, including external and internal factors. The assessment stage can be a good opportunity for employees to feel engaged in the process of goal-setting and development. This is also a good time to take baseline measurements of the behaviors and outcomes targeted by the program.

Step 3: Create a Framework

Having determined the goals and the audience, you can now establish the structure of the program, including: Program qualifications and rules; administration planning, including tracking and reporting; and determining program type and duration.

For budgeting purposes, a 2011 World at Work survey estimates average allocation to be 2% of payroll. A 2013 Dittman Incentive Marketing survey and white paper analyzed client data to provide rough guidelines for Milestone (years of service) programs. We determined an average of $45 per employee.

Step 4: Communicate

Strong, consistent communication is extremely important to keep the program top of mind. Some guidelines: Know your audience demographics, select appropriate vehicles including print and electronic, consider a dramatic launch, communicate success, and recognize publicly those employees demonstrating the behaviors you are trying to encourage.

Step 5: Measure, Reward and Refine

Whether for short-term incentives or long-term recognition or engagement programs, you should collect data at pre-determined periods to uncover any trends in the success of the program.  These measurements can include customer service scores, program participation, surveys pertaining to engagement, and retention, among others.

Of key importance, your organization must deliver on its promises to reward employees so as to establish or reinforce trust, an essential component of engagement. Consider personal delivery of recognition and rewards, such as at a company event or, for virtual employees, a phone call from senior management.

The reward experience should be so memorable that it sets in motion the motivation to achieve again and also inspires others in the company.

It’s also essential to remember that engagement programs are not static, they must change with the circumstances, market conditions, and in response to the program’s success. The data and measurements collected should point the way to areas that need attention, refinement, or additional training and support. We recommend that you conduct a full assessment of your engagement programs annually to ensure that they are on track, reaching the intended audience, and achieving the goals you set out at the start.