Keys to Success with an Innovation Reward Program

Cash, gift cards, electronics, extravagant trips…these are the rewards that make people innovate, right? Tee them up, announce their availability and let innovative minds go to work.

When I say “rewards” and “innovation”, is that what springs to your mind? You’re not alone. It’s the default our minds run to. Maybe we’ve watched too many game shows. We’ve been conditioned to think of gaudy baubles of value as “rewards”. I can’t tell you the number of times Daniel Pink’s name has been invoked as a response to any - I mean *any* - mention of rewards. My hunch is that people think of rewards as the caricature I’ve just described.

There is some truth in the response to rewards, of course. People have experienced ham-handed attempts to incentivize participation in innovation, collaboration, learning, knowledge sharing, etc. Which is why it’s worth laying out a better framework for understanding their use. Rewards are part of valuables, one of the four categories of gamification. Gamification is powerful, when done right. When done wrong, as you’ll see, it can have the negative consequences.

The reward spectrum

Think of rewards as a spectrum of increasing levels of, let's say, aspiration. They come in many flavors, but to simplify things, the ranking below is useful:

Cash, merchandise: The definition of rewards in popular culture; extends to gift cards, trips to vacation hotspots, electronics and the like. It's often implemented as it is an "appeals-to-most-people" tactic. They are familiar items, and are the sorts of things one might find in a credit card rewards program. It's hard to argue that cash, iPads, and vacations aren't broadly valued by people.

Workplace: These rewards are associated to privileges and extras in the work environment. Employee of the Month parking space. Extra personal time off (PTO). Lunch with a senior executive. Choice of a new office. They offer a bit of workplace status to the recipient. There's a logic to this reward, as the innovation program is occurring at work. These rewards have a more narrow appeal than cash & merchandise, steering away from the cash value orientation. 

Corporate values: Rewards that relate to the mission, the culture, the values of the organization. While these rewards can overlap the cash & merchandise type, they reflect the philosophy of the organization. A nice example of this is the reward program of Frima Studio, a video game maker. Employees earn points for ideas, which can be redeemed for babysitting services, home repair, etc. These reflect the company's emphasis on work-family balance. Others examples could be: (i) corporate donations to selected charities; (ii) opportunity to help determine the company's collaboration strategy; (iii) week-long trip for a course on a career-enhancing subject. 

Innovation program: Rewards here are aligned with the objectives of innovation in the organization. One example is the use of innovation tournaments for money to find big ideas. The reward is the funding of the program, and even a chance to work on the subsequent project to make it reality. Another example would be a design thinking workshop to prototype and develop the idea. Top performers could become part of special internal group with broader innovation duties for the organization.

As you read these, notice the escalating level of aspiration and mission in the types of rewards. Clearly, rewards are a richer field than the stereotypes we always default to.

Know your participants' interests

Here's an actual story about how employees viewed what might seem like a valuable reward:

Some winning employees in an internal contest got a chance to spin a prize wheel. One of the prizes was lunch with the CEO. For a couple employees, this is the prize that came up on the wheel. Lucky day for them? Not so much. They immediately asked for a re-spin. The idea of sitting through lunch with a powerful executive of the company was more a source of fear than interest. It also promised plenty of awkward conversational moments.

This story illustrates the point that a given reward will not appeal to all people. Which is a core principle to remember for planning any type of rewards program. To help flesh out the basis of interest for different types of rewards, think in terms of this matrix:

In the matrix, two attributes of employees' work are plotted: ambition level and cognitive complexity. To help make these characterizations more accessible, sample occupations are added to the matrix. Note: These example occupations are generalizations. Of course there are cases of individuals in these occupations that would be represented in other parts of the matrix.

OK, an explanation of the two attributes.

Cognitive complexity: Work that is cognitively complex will involve high levels of creativity, knowledge accumulation and/or analysis. Tasks tend to be unique on a day-to-day basis, with fewer rules to follow to be successful. A terrific survey that examined this sort of work was completed by The Work Foundation (pdf link). Work that is not cognitively complex can be described as following generally well-known rules. The level of uncertainty when approaching a new task is lower.

Ambition level: Ambition in this context relates to the desire for ever-increasing responsibilities that have greater impact on an organization's performance. How strong is the ambition a person has? Certain occupations will attract people with larger ambitions.