Your employees may never say no to a bonus, but that doesn't mean it's the ideal way to credit their work. Examples from Foursquare and other innovative companies show how to make your rewards as creative as the ideas they're rewarding.
July 19, 2011
Projet Créatif, video game developer Frima Studio's program for pitching product ideas, requires its employees to work for the company for a year before presenting an independent project. That was too long for David Moss to wait. Less than a year after joining Frima, Moss compiled a creative team to start designing Ravenmark, a mythological adventure for young boys set in fourteenth century Scotland.
Originally designing Ravenmark as a digital short, Moss and his team were inspired by the innovative nature of Projet Créatif to do more. "We thought, this is a creative project," Moss says. "We're supposed to be able to pitch about anything we want so let's make a TV show."
So in March 2010, the Ravenmark team presented its idea to a jury of their peers. "Everyone was kind of confused that we were pitching a television show," Moss recalls. "But by the end of the presentation, everyone's eyes lit up and they could see the potential."
The jury decided Ravenmark was a smart idea; Frima's upper management agreed. Moss and his team were given time and funds to develop Ravenmark. With Ravenmark ready to hit the market, Moss maintains ownership of his idea and will get part of its revenue throughout his career.
For plenty of creatives, Moss's opportunity is a dream come true. Frima, like many online creative companies, understands how to foster and reward its employees' ideas. But rewarding great ideas is vital to the success and productivity of any company. According to a study by employee motivation agency Maritz, 55 percent of employees strongly agree that the quality of their company's recognition programs affects their performance, but only 10 percent of those polled are satisfied with these efforts.
Especially at fast-growing small companies, ideas are king and should be acknowledged. But rewarding great ideas should include much more than a token bonus. There are lots of strategies for rewarding productive creativity; some are tangible, others are intellectual. Some recognition is public, some private. Determining the best reward programs for your company takes time and a profound understanding of your employees' motivations. But the right program will not only recognize great ideas but also bring more to the table.
Before You Start Rewarding, Foster an Innovative Culture
Long before your company can reward the great ideas, you must first foster the creation of those ideas. According to Maritz, driving performance requires companies to focus on their No. 1 asset: their employees. "What drives innovation?" Mike Barbee, COO at Maritz Loyalty and Motivation asks. "It's not coming from technology or processes. It's coming from people."
Programs such as Frima's Projet Créatif are an effective way to foster such innovation. Since it started last year, 10 ideas have been pitched, and six of them are in production. Ravenmark is the first to reach a marketable stage. At its core is the idea that employees judge each others' ideas without the initial influence of senior leadership. "Ideas don't just come from upper management," says Steve Couture, Frima's CEO. "You need a channel to listen to all ideas."
Other companies feature similar opportunities for idea pitches. At Foursquare, the company behind the location-aware app of the same name, employees in its New York City office are welcome to showcase ideas in the form of a venture capital pitch in what the company calls Demo Days. They're held almost weekly.
"People can show what they're working on just to get a fresh set of eyes on something or to propose a major new direction for the company," says Morgan Missen, Foursquare's head of talent. "Our employees love the opportunity to share what they're thinking, and as a growing company we don't really have a choice not to innovate. It's mutually beneficial."
Firstborn, a creative digital agency also based in New York City, also capitalizes on mutual benefit, allowing its employees to work on side projects so long as present their findings at a semi-regular open forum called Group Therapy. "It's not about giving people time to experiment," says Firstborn's president Dan LaCivita. "It's transferring knowledge to the rest of the company."
When ideas are flowing, it's time to decide which ideas are worth rewarding. The good ideas—the ideas that will improve, grow, or transform the company—deserve the most plaudits. But, distinguishing these ideas, especially when they require time to mature, is sometimes difficult. That's why produce delivery company The FruitGuys prefers a different method.
"We try to encourage and reward all ideas that come up," says CEO Chris Mittelstaedt. You want a culture that celebrates almost the wackiest of the ideas for the bravery in putting it out there."
Dig Deeper: 7 Steps to a Culture of Innovation
Points, Prizes, and Other Perks
When great ideas emerge, bonuses are the most common solution for companies with a large enough cash flow. Although an extra check is rarely unwelcome, many more creative options exist to reward employees in a meaningful way.
While Projet Créatif stands to showcase major innovations, Frima also recognizes smaller ideas with a rewards system call Frima Points. When an employee comes forward with a fresh idea, they earn points which can later be traded for tangible gifts. Frima's gifts, such as payment for babysitters, home repair services, and the like, emphasize work-family balance—a core value for Frima—while also fostering productivity.
"We've found that if people spend more time at home with their families than doing household chores on the weekends, they come back to work on Monday ready to do better work," Couture says.
At RockYou, a social game developing and advertising company, great ideas are recognized monthly with their You Rock Awards. Driven by peer nominations, RockYou awards employees for solving a problem, designing a game or otherwise showing innovation. You Rock nominees spin a wheel to choose an award such as concert tickets, an extra day off, or an iPad. All You Rock recipients also receive a golden bobble-head cow trophy.
"I don't actually know the relevance of the cow," RockYou's CFO Steve van Horne admits. "But it's a source of pride for employees to have on their desk."
At Firstborn, innovation is rewarded not by a trophy, but with a three-week vacation. Recognizing that their employees put forth great ideas on a daily basis, their accomplishments culminate in this extended paid time off after five years. "Whether you take a cooking class or go to Europe or sit at home and play video games, it's realizing people want to have that break to get a mental refresher," LaCivita says.
Dig Deeper: 5 Atypical Employee Benefits
Create a Culture of Acknowledgement
In many small businesses, spending money on extraneous prizes is not feasible, but other rewards options still stand. Especially in growing companies, employees are rewarded most through verbal acknowledgement for a specific idea or simply being part of a team that daily embraces innovation.
"In terms of traditional compensation rewards, it tends not to motivate our employees," says Missen about Foursquare. "It's not why a lot of us joined. We have a lot of unmitigated stars in the company that receive press and praise. Recognition and idea implementation are more important."
The FruitGuys, Mittelstaedt constantly reminds himself to call attention to those collaborating under him. Inspired by the "five R philosophy" his company employs with their customers, he makes sure his employees are remembered positively for their efforts. (The other R's include being respectful, responsive, realistic and responsible.)
"A leader is not the greatest person in an organization, so they shouldn't be the one getting the glory," he says. "Helping other people get the glory or acknowledge a success is in our unwritten code of conduct."
For smaller companies, like The FruitGuys' 25-strong, such personal recognition is manageable. Other alternatives like having employees nominate one another and training managers to recognize ideas as they emerge prevents upper management from overlooking great ideas no matter how small and also helps maintain a sense of intimacy no matter how large a company grows.
Dig Deeper: Rethinking Employee Awards
No Two Employees Are Alike
From its research and experience with clients, Maritz postulates that the best reward programs involve purposeful choice on the part of both employees and employers. Roughly only 30 percent of employees who want to be recognized in a certain way – for instance with cash bonuses, public recognition, or symbolic awards – are recognized in that way. Communication about what employees want versus what the company is able to provide helps determine the best options.
"Rewards always need to be meaningful, memorable and motivating, but there's not a one size fits all solution," Barbee says. "By offering choice to your employees you get much more engagement and can drive the kind of results that they want."
Open and frequent communication with Firstborn's 70 employees is a key part of how the agency determines its reward policies. "Some people need that time away more than others. Others may want a nice bonus instead," LaCivita says. "As a company you employ individuals and you are a team, but at your core you're still individuals with different feelings and different needs. You really need to talk to everyone and know who they are as people to really know how to reward them."
As important as honoring all your employees' accomplishments is, companies should be wary of overcompensation. At ngmoco (stands for "Next Generation Mobile Company"), a free-to-play gaming company, rewards are limited to those ideas that exemplify the core values of delight and ownership.
"Delight means setting and exceeding expectations, ownership means carrying a project through to its end," says Justin Hall, ngmoco's director of culture and communication. "If you just reward people for working long hours you're rewarding them for being inefficient and if you reward people for being on time, you're rewarding them for something expected. You have to make sure your expectations permeate across the organization so that the great ideas have a chance to be recognized."
With rewards and recognition natural sense of competition may arise, something healthy for companies seeking a truly innovative culture. Companies should recognize a group with great ideas when merited, but LaCivita maintains that there's nothing wrong with recognizing an individual doing something incredible.
"If a group comes to the table and one person has had the eureka moment that inspires everyone else, I don't think it's wrong to tell or show that person how much his work mattered," he says. "That's how innovation works."
Dig Deeper: 10 Tips for Boosting Employee Morale
Give More to Get More out of Your Workers
With one critical eureka moment often comes the expectation that more great ideas will follow. One of the easiest ways to both recognize innovation and guarantee more in the future is to let your most creative employees take on more responsibility.
At ngmoco, two engineers realized the benefits of creating a gaming platform that would allow downloads both for android and iOS devices. Today ngmoco's efforts center on that platform. The two engineers serve now as vice president of global technology and director of first-party technology, respectively. Similarly, The FruitGuys' head of customer service worked her way up from answering the phones thanks in part to her creativity in leading weekly meetings.
Added responsibilities do not necessarily translate to promotions, however. Given the freedom to choose their next projects or assignments allows great innovators to work in the most inspiring possible environments. "Foursquare's employees come in wanting to work on anything they think they could help the company improve," says Missen. "It's the low fruit, the slow gazelle, and they can fix it."
For Moss, Ravenmark has provided new opportunities for new creative projects. While Frima's jury considered Ravenmark's future for a week before reaching a decision, Moss estimates deliberations took ten minutes for his most recent pitch. "Just showing that level of trust and confidence in the fact that I know what I'm doing, that's all I need," he says.
The employee loyalty built by Frima's recognition of innovation turns any short-term costs long-term investment. "It's important to find creative people, great resources," Couture says. "But it's even more important to keep them when you have them. We keep them by rewarding them."
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