Send to a friend

FEATURESTORY

Reflections on Rewards

The world’s largest manufacturer of corrective lenses clearly sees the value of non-cash incentives

by Paul Nolan

Rick Piper still smiles when he recounts the conversation he overheard during dinner at this year's national sales meeting of independent distributors for Essilor, the world's largest manufacturer of eyeglass lenses.

Distributors from three different companies were sitting together and reps from two of the companies were talking enthusiastically about the new cameras and electronics they had ordered and vacations they had taken in the previous year using points earned in Essilor's Advantage Plan incentive program.

The owner of the third distributor company, which wasn't participating in the program, turned to his assistant and asked, "Why aren't we doing this?'" recalls Piper, Essilor's Director of Marketing for its Independent Distribution Division.

That summarizes the strength of non-cash incentives in a very real fashion. "If we gave those guys cash, they would have paid their electric bills or bought groceries and no one would have said a word about it when we were sitting together," Piper says. Indeed, research indicates they would have long since forgotten about a cash reward.

The Clash With Cash

"It seems the first tendency for a firm, if employees are dissatisfied or unproductive, is to throw money at them. That's often not the best answer," says Scott Jeffrey, an assistant professor of Management Sciences at the University of Waterloo in Southern Ontario. Jeffrey has done extensive research on goals, incentives and other aspects of employee performance management.

Employees - especially hard-driving, high-earning salespeople - will most likely tell their managers that they prefer cash incentives. Jeffrey has long argued that smart companies recognize that it's not a matter of what their employees say they want, but rather what they will work harder to achieve. His research and work done by others has shown that non-cash incentives consistently produce better performance in workplace environments than cash.

Piper is a believer. In fact, when Essilor made the switch from cash payouts to non-cash incentives in 2006, it increased the number of independent distributors participating in the program from less than 10 to 58 (out of a total of 94). The distributor companies didn't approve of their reps receiving cash payouts from a manufacturer, but they were OK with them earning points for non-cash rewards. "It was so hit and miss that we weren't getting anything from it," Piper says of the cash incentives.

What a difference a change in strategy makes! Essilor's Advantage Plan points program, which was developed by BI, a Minneapolis-based provider of business improvement services, motivated many of Essilor's independent reps to complete 14 online training courses (also created by BI) and promote Essilor brands to eye care professionals.

The program, which launched in March 2006, was designed to support two of Essilor's high-end lens lines, Varilux and Crizal. Using the 13 months prior to the campaign launch as a baseline and measuring 13 months after the launch, Piper says the labs at which half or more of the reps completed the training experienced a sales growth of 10.5 percent with the Varilux line compared to a decline of 3.3 percent at the labs where half or more of the reps did not complete the training. Results for the Crizal lenses were even more impressive, with sales increasing 43.3 percent in the time period for those who participated in the incentive program versus 21.7 percent for those who did not complete the training.

Essilor ran a fourth-quarter push for both lines last year and 20 reps qualified to go to Super Bowl XLI in Miami.

"We're still getting our feet wet," Piper says. "We're learning and building and gaining a lot of momentum. I see us broadening this out and doing things differently, but we'll always use this model in some fashion."

.

See also in the article: Reflections on Rewards

Study Shows Increased Use of Non-Cash Incentives

You Were Always On My Mind

Who Loves Ya, Baby?

---

 

Your feedback on our editorial is welcome at . We need to remind you that our articles are copyrighted. If you would like to distribute or post our material elsewhere, please contact .  Click here to subscribe today!