An internship at Google- examples of extrinsic employee rewards. Image by frakkin from Reddit
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Employee Rewards That Really Count
One of the biggest issues when it comes to designing a reward program for sales teams is that everyone is motivated differently.
Some people prefer extrinsic rewards – physical things such as vacations, bonuses, salary raises, trophies, or swag like the image above. Others would rather receive intrinsic motivation through recognition and public attention. Studies have been conflicted as to whether an extrinsic rewards system or an intrinsic motivational system is more effective. So how do you decide what to offer? How do you find out what your employees really want?
According to a report issued by the Incentive Research Foundation, the key to successful employee motivation is to have a well-designed program that equally emphasizes both extrinsic and intrinsic rewards.
In other words, offering raises, bonuses, and other forms of compensation is a great starting point, but a successful sales incentive program should go beyond that point.
The key to your employees finding value in the program might have nothing to do with the actual reward at all.
The corporate workplace is a harsh place. Well, harsh as in very few employees wake up every morning excited to go to work. More often than not, employees simply attempt to survive through the dreadful week of deliverables, reports, and politics, so they can finally have fun on the weekends.
In most environments, there is hardly any incentive for employees to work harder or learn new skills beyond what it takes to keep their paychecks. As a result, employees often only work hard enough to earn their paychecks and to not lose their jobs.
In fact, Gallup’s 142-country study shows that only 13% of employees are categorized as “engaged” with their work. In comparison, 24% of the workforce categorized as “Actively Disengaged,” which means they are so unhappy with their work that they minimize their productivity, spread negativity, and even sabotage productive efforts that require them to do more work to “keep their jobs.”
If you think about it, this means that a quarter of your company is poisonous! How can any organization be competitive at anything if 24% of the workforce is undermining itself? Of course, it’s actually not the employees’ fault they are disengaged. Companies like Zappos and Google are known to get their employees motivated, driven, and excited about work on a daily basis. From my own experiences as a Gamification Designer, I firmly believe that everyone has the capacity and the longing to become motivated and driven for something that is worth their cause. It’s bad environmental and cultural design that turns good employees into toxic cells.
Of course, you don’t need a Gallup study to know how disengaged employees are at work. Just think about how often people close to you complain about their work or their bosses. Think about how the movie Office Space is such a great hit because people can actually relate to the frustration and disengagement of the characters in the movie.
Why does all this matter? Because research has shown that the companies with disengaged and unmotivated employees on average only produce 50% of the profits and only 40% of revenue growth compared to companies with engaged and motivated employees.
If you knew you could double your profits and improve your revenue growth by 250%, without opening new markets and without introducing new breakthrough technologies, but simply making your workplace more engaging and motivating, would you do it? Of course you would.
What if I told you this would require your employees to “play” at work? I can immediately see many people shaking their heads and responding with, “But we don’t want our employees to play games and get distracted at work!”
Somehow, they forgot about the 250% revenue growth that comes along with this “distraction.”
Gamified Training: Playing is Learning
Developing competence, or ‘learning’ in other words, is one of three basic innate needs of human beings, along with creating autonomy and striving for relatedness. This “intrinsic motivation” for developing competence is what makes humans (and other primates) curious and makes us want to develop skills.
However, much of the prevailing educational and training system gets in the way of our innate desire to learn. Training often damages our intrinsic motivation to learn because of the dominance of extrinsic motivation (reward-dependent motivation) for results such as scores and passing rates.
Sir Ken Robinson, who has made the study of creativity in learning his life’s work, has observed that instead of fueling creativity through play, education systems actually kill it: “We have sold ourselves into a fast-food model of education, and it’s impoverishing our spirit and our energies as much as fast food is depleting our physical bodies. Imagination is the source of every form of human achievement”.
Our economy is gradually shifting towards a creativity-based economy where, increasingly, added value is created by non-linear problem-solving activities. Many non-linear activities like accounting are slowly being outsourced to low-income countries or are being taken over by computers. Education and training need to prepare for that new economy where problem-solving, innovation, and creativity is key. And through many time-tested studies, we learn that extrinsic rewards actually wipe out creativity. We are built to function at our best when autonomy and purpose are ingrained in our activities.
This is where a gamified workplace can motivate employees to do tasks in fun and engaging, while maximizing their learning and retention.
Gamified Training: Wired to Learn
As mentioned above, our brains are wired to learn. Even games stop becoming fun when there is nothing left to learn. But we are also wired to learn in certain ways.
Our brains are not designed to be motivated towards reading long pieces of text, sitting through lectures, or going through a large deck and taking quizzes.
Rather, our brains like to learn by doing, trial and error, watching other people do it, and through stories. The part of our brain that dictates motivation came way before the invention of written text, but tribal villages were fully engaged in trying new methods and listening to their tribal elders share stories of their past.
Unfortunately, the things we needed to learn in a corporate environment in the last century became exponentially more complex and abstract – operations, management, accounting, HR, and systems; but the technology and medium of learning did not catch up to the learning materials. We were always stuck with text, pages, and slides.
This finally changed when we saw the invention of modern games. With advanced gaming platforms and Big Data methodologies, this is the first opportunity where we can revolutionize training by delivering immensely complex materials and subjects through immersive environments where people can learn by doing, by observing others, and learning through interactive storylines.
Gamification makes grunt work fun
One of the most interesting things about games that people don’t realize, is that they often consist of repetitive actions.
In Role-Playing Games (RPG), leveling up often involves killing the same monsters in the same stage over and over again for hours or weeks.
Gamers call this ‘grinding’ and it is fun and addicting. Children wake up behind their parents’ back at 3 am in the morning to level up (which demonstrates amazing “work ethics” for these children who commonly are referred to as having “No discipline and no persistence”). In the real world, similar repetitive workload is called grunt work – doing the same activities over and over again for hours upon hours. Grunt work is perceived as boring and torturous.
Even mobile-social games like Angry Birds or Candy Crush involve extremely repetitive movements: match 3 gems; match 3 gems; match 3 gems; fling out the bird; fling out the bird; fling out the bird. It’s almost a wonder how people can literally spend four hours a day on that for months.
If games can get kids to voluntarily do hours of repetitive work, it can likely get anyone engaged to anything. But it has to be designed well in order to work. Unfortunately, Gartner Research predicts that 80% of the gamified products now under development will fail due to bad design. Why is that?
A lot of failed Gamification design starts with adding what we called the “PBLs” – Points, Badges & Leaderboards to their work processes. On a bigger scale, people just think about how adding game elements into the system will automatically make it successful. This is when you see people believing that calling a task a “quest” would make it fun and engaging.
It’s important to note that, a game can have all the right “game elements” but still be boring or not motivational. In fact, every single game in the market has “game elements” and “game mechanics” in them, but most are still not engaging or successful. It’s fairly naive to think that once you plug game mechanics into your company or product, it will be successful. Good Gamification does not start with game elements but starts with our Core Drives.
Enterprise Gamification in Training
Many educators and policy makers still strongly believe that there is a lot of Core Drive 2: Development & Accomplishment in current training and education systems. However, if that were the case, students and employees would feel extremely excited when there would be an assessment, because that would be a new opportunity to feel developed and accomplished!
Unfortunately, that’s not the case. People (even good students!) abhor tests and do it just because they have to (Core Drive 8: Loss & Avoidance). Very few people look forward to assessments.
Luckily there has been quite an increase in interest in applying Gamification in education and training.
There have been a number of excellent attempts to introduce compelling gamified education products on the market that millions of individuals now use to bring FUN back into learning!
As mentioned above, the modern training challenge involves engaging employees, stimulating their interests, retaining their attention, and maintaining a positive attitude in a nurturing environment.
Key to these goals is the effort to maintain a rich communications environment that encourages feedback and reinforcement, not only between the training environment and employees, but also between the employees themselves. These socially interactive mechanisms, with the proper level of control for encouragement and discipline, can be designed in effective ways to create “fun” learning situations.
Example in Gamified Corporate Training
One great example of Gamified corporate training is done by one of my clients, Morf Media. Morf Media sets out to gamify various training activities for financial institutions such as SEC Compliance training, Fixed-Income Derivatives, and new Dodd-Frank regulations.
As imagined, this material is extremely dull, yet important. As a result, Morf Media created a immersive learning platform that makes sure customer employees are learning by going through a variety of scenarios, utilizing their creativity and seeing feedback, as well as accumulating points and scores towards meaningful stats that the employees can feel proud of.
Adhering to the intrinsic motivations explaining in the article, the platform prevents the employees from reading long pieces of text, but has the employee become a rising star in a simulated company and utilizing interactive onboarding tutorials to teach them the skills to help all their coworkers resolve the most pressing issues that will determine the company’s fate.
It is this type of game-play that allows children to memorize more details than the periodic table, gamers to resolve 15-year HIV virus protein structure problems in 10 days, and employees to accumulate competitive skills and stay engaged in the workplace.
Training Gamified Correctly can make all the difference
If we successfully gamify education and training, then “assessments” will be seen as an exciting opportunity for employees to unlock new materials and skill-sets instead of always being a distraction from their work.
Not only will training be more fun, engaging and interactive, it will also prepare our firms for a new economy where creativity and problem-solving will become the competitive advantage over factual knowledge.
Many of you probably love to play games for recreation and entertainment. But as I have mentioned in my other posts, they can also be used to enhance and enrich educational experiences. These are called serious games.
The combination of learning and fun is a potent force in today’s corporate world. To generate innovation and maintain competitive edge, organizations need to align themselves with market changes, both domestically and globally. As far as processes are concerned, this means that employees must adapt by continuously learning new skills and sharpening their abilities to solve problems- just doing the job in the same routine fashion doesn’t lead to the same growth.
Traditional ways of teaching often mirror conventional classrooms. These include lectures with whiteboards, hand outs in the form of quizzes and surveys and instructional videos. Most people passively react to such formats. Participants may remember terms and information and they may be able to pass certain tests but this can offer a false sense of comfort as their ability to apply their new knowledge to actual, real-life problems remains untested.
Besides training team members, there is also the challenge of educating and training clients. Clients often need to have a deep level understanding of how a particular product works. If there are enormous technical complexities, the information can be particularly daunting and frustrating- not very good for maintaining a happy customer base.
And in addition to employees and clients, corporate decision-makers also need to maintain regular learning initiatives to understand the perspectives and preferences of their clients. And with these insights, they must continuously make decisions to develop their products so that they are relevant to the needs of their customers.
All these objectives require effective learning where information is quickly assimilated in order to be applied for the best possible results. Very little time can be afforded to make transitions from conceptual knowledge to astute action. This is where the power of games can make a huge difference.
Here are five companies (in no ranking order) who are dedicated to developing software and platforms that optimize learning experiences through game mechanics.
This infographic (courtesy of our friends at Officevibe) looks at the poor state of employee engagement across the U.S. One stat pulled from Gartner shows how gamification is rapidly becoming a strategy for companies to improve engagement levels (and therefore employee output). But as you all know, it’s not gamification principles and mechanics themselves per sé that make work more meaningful, enjoyable, etc.- it’s all about how you apply them.
Share with us how your company- or you- are employing gamification techniques to keep you and your team motivated.
Competitive gamification is certainly becoming a hot, new business theme in modern corporate development these days. It has been demonstrated to be effective in sales, where game mechanics based on competitive models are used to promote a “competitive interest” in engaging customers and closing deals. Now management is exploring other business functions which might benefit from competitive gamification mechanics and techniques.
But competition may not be effective, or even desirable in the enterprise setting. Why? Because it tends to create an unhealthy environment where employees put self interests above corporate and even customer interests. Instead of working towards a win for the company, a win for the customer, the individual just focuses on beating the internal competition – his colleagues and fellow employees. (To win the brass ring; that cash award or trip to Cancun.)
“a contest between individuals and entities for territory, a niche, or a location of resources, for resources and goods, for prestige, recognition, awards, mates, or group or social status, for leadership.”
Notice the emphasis on the individual (or entity), and the need to “contend” or “contest” for something; implying that there will be a winner, as well as a loser. Maybe many losers.
In the enterprise this implies that we will have people competing with other people within the company. OK, that seems reasonable. But Mario Herger points out that this is contrary to the essential meaning of the corporation; yes, the very nature of an enterprise. For corporations are formed to bring people together and pool their different strengths in a collaborative setting. The fundamental design of an effective corporation taps the talents of its constituents to build something greater than the component parts. And yes, even more competitive in the external environment – the marketplace, where it faces the challenges brought forth by the other companies.
So now, do we want to introduce an anti-collaborative element – competition among the internal players, and potentially reduce their effectiveness as corporate team members? Possibly for customer engagement, but only after thoughtful analysis indicates that the benefits outweigh the risks, and possible long term detriment to the employees and ultimately the enterprise.
In general, adding the additional stress of competition to the challenges that employees face on a daily basis, will only result in a deteriorating situation with increased probability of burnout and uneven performance. Employees will become more motivated – to look for new opportunities elsewhere.
The Different Types of Competition
One perspective that we can view competition from is that of whether it can be deemed as healthy versus unhealthy. Mario Herger distinguishes between a “good” adaptive competitiveness and a “bad” maladaptive competitiveness by a set of specific characteristics.
Adaptive competitiveness has the following characteristics:
Perseverance and determination to rise to the challenge, but bound by an abiding respect for the rules.
The ability to feel genuine satisfaction at having put in a worthy effort, even if you lose.
The fact that you don’t have to be best at everything, just in the domain you train for.
Being able to deter or discourage gratification.
Being marked by constant desire to strive for excellence, but not for the desperate concerns of rank.
Maladaptive competitiveness in contrast, is characterized by:
Psychological insecurity and displaced urges.
A person who cannot accept the losing part of competition.
One who competes when others around are not competing.
A person who has to be best at everything.
One who doesn’t stop when the whistle blows.
An individual who drags others into competition.
One who will resort to cheating when he/she can’t win.
How Winners and Losers React
Now that we see that competition can be thought of in terms of adaptive and maladaptive forms, how do we view the players in these competitions? What are the common reactions that “players” have? Herger cites two Hungarian researchers – Martá Fülöp and Mihaly Berkics. They found that there are four common reactions for winners and losers.
Winners typically can either show:
Joy, expressed through gleeful enthusiasm.
Satisfaction with ones own competence.
Denial of the win as way of social cautiousness. Those players would feel guilty and fearful of the losers’ reactions, like retaliation, so winners would mask their inner joy and not express it openly.
Narcissistic self-enhancement, where the winners would feel a malicious superiority over the losers.
Culture Management is essential for growth stage companies
Our company has been through many cycles and products throughout the years, but it’s the passion and bond between teammates that have always carried on with us. That will continue to carry on no matter what size we grow to. We are a team, and we are a family.
This places an enormous emphasis on having the right Culture. Culture is something intangible but very impactful. It affects team morale, productivity, conflict resolution, decision-making, and hiring — basically everything that moves the company forward in the right direction. It is something that needs to be nurtured and maintained, as it could easily be diluted as the company grows.
Therefore, I spent a lot of time researching about companies that boast their cultures as a competitive edge, including Apple, Zappos, Netflix, Yammer and more (yes, I’m not pretending I came up with all this stuff. The giants get the credit and I get the shoulders). I also made a list on what most of my friends love about their jobs, and what they hate about their jobs to figure out how can we create a system that automatically generates the former and eliminates the latter.
It seemed striking to me that, everyone complains about their managers, but when these complainers become managers themselves, nothing has changed, as people below them still complain about their managers. Clearly the “bad manager” syndrome is not based on an individual’s capability, but an overall system flaw.
Culture is the system that either creates the right environment where everyone can easily be good managers, or where bad managers are kicked out, so good people do not lose motivation.
A culture based on Gamification
There’s a certain DNA within the Octalysis Group Team Members that keeps us all bonded together. We call it a DNA because it isn’t just rules that look nice, but it should be something that is ingrained deep inside every member, which is reflected upon daily conduct.
These are not just fancy statements we put on walls and badges, but all team member are evaluated (and rewarded) based on how well they have this ingrained into them. Hiring and firing should not only be based on performance output, but also environment output.
1) Put positive energy into the company
Bad attitude in the company is UNACCEPTABLE. Your responsibility in the company is not only to perform, but to make everyone around you better in every way you can. Don’t be the “Game over man!” guy you see in movies. Be that person who is always thinking positively and encouraging others. Always inspire hope and ideas to new solutions.
2) In whatever you do, be exceptional and over-impressive
Our competitors are filled with good people. That’s why we all need to be excellent. We believe the best people are 10x compared to the average, and we should always strive to be that 10x. You need to care intensively about outperforming expectations and getting more wins together as a team.
You need to maintain calm poise in stressful situations and be a strong pillar, especially when it takes many pillars to hold up a roof. We don’t care about being over-impressed with your hours. We want you to create WOW moments for the rest of the team. Do whatever it takes to achieve that.
