Are Employees Gaming Your Incentive Program?

Nov 29, 2011 by Confero Inc.

People tend to do those things for which they are rewarded. To encourage employees to provide the customer service promised to our customers, employee incentive and recognition programs are put into place to reward employees who engage in desired behaviors or who achieve specific outcomes. 

Desired behaviors can be measured by mystery shopping programs, manager reports, audits, customer feedback measures and performance reviews. Specific outcomes can be measured by sales amounts, referral numbers and the like.

No incentive program is perfect and, over time, sometimes employees figure out a way around the system to “earn” the incentive. In other words, sometimes employees “game the system”.

Here are some common games we see. We hope they help you in planning to avoid them.

The Game: Trick the Technology

If an organization uses technology alone to measure key service metrics and reward performance with incentives, the system is usually an easy target for gaming the system.

The modify the order trick. A mystery shopper overheard a training conversation at the first of two drive through windows at a quick service restaurant. When the mystery shopper attempted to hand the employee payment, the mystery shopper heard the trainer saying “No, never just accept the payment. Always be sure to click on Modify Order then click Ok  before you accept the customer’s payment. This will restart the timer on our transactions so our service times will look good.”

The ring up single items as multiples trick. At a grocery store checkout, the cashier entered a fresh bagel purchase as 12 separate items rather than as 1 item (a dozen). Why? Cashiers received a bonus based on average transaction ring times. Changing up transactions like this helped the cashier  improve their average.

The hand pick only happy customers to survey trick. A classic example comes from early interactive voice response (IVR) and comment card-type customer feedback. In older programs, employees could be selective about distribution, so that customers who complained were not given the opportunity to provide feedback. Technology has come a long way since then, allowing feedback to be solicited on random receipts, automatically when a free item is listed or automatically when a coupon is used. These enhancements still leave room for gaming the system. For example, restaurant managers often offer a free dessert as a service recovery effort with an unhappy customer. If the restaurant’s POS system is set up to automatically offer a bounce-back free appetizer offer for the next visit only if the customer has a free dessert showing on the ticket, a store manager might elect to just give the customer a dessert and show a higher shrinkage rate on desserts, rather than have the system recognize the “unhappy customer free dessert” and issue a survey to the unhappy customer.

The Game: Change the Timing of Sales

Commissions are the purist form of incentives and salespersons have over time perfected the art of gaming the system. This is so commonly understood that most consumers know to shop for major purchases at month or quarter end, when salespersons are usually most eager to make sales and will offer better discounts.

Sometimes, though, the incentive program rewards delayed sales. In the current economy, a delayed sale is usually the last thing an organization wants to encourage.

For example, during a bank merger transition, a bank customer (during a mystery shop) was encouraged to wait three (3) weeks to open an account because, after that time the banks would have merged and the “ rates might be better”. In reality, the bank had announced its sales incentives for employees which would go into effect after the merger. This bank employee was so intent on getting the sales incentive post-merger that he was willing to risk missing getting an account right now.  Certainly, the incentive planners had not envisioned this happening inside their incentive system and they were not happy about the negative impact on customer experience that resulted.

So how do you avoid gaming?

 Gaming cannot be 100% avoided. But it can be planned for and managed. Here are some considerations to think through as you plan and manage your employee incentive program.

Think like an insider. Play “what if” with your program.  It may feel like you are taking a visit to the dark side, but thinking about how to abuse your own system can help you make sure you are not taken advantage of by gaming. For example, if you were the manager of a restaurant with such a system in place and you had to earn a specific satisfaction rating in order for your bonus to kick in, what would you do in these circumstances? If you were the cashier at the grocery store who was rewarded for average items rung up per minute, what would you do to  improve  your average? 

Think like a gamer. Create your own cheat codes.  Video games are a popular use of technology. Did you know that “cheat codes” can be openly purchased, from reputable publishers, for most any video game?   Wikipedia defines a cheat code as “non-standard methods for creating an advantage beyond normal gameplay, usually to make the game easier….Cheats sometimes may take the form of "secrets" placed by game developers themselves.” As you contemplate your incentive program, think of yourself as the game developer. Think ahead to metrics or triggers that would seem to point to a gaming of your incentive system.  Consider, also, how inconsistencies in data are reviewed. If something does not seem quite right, then maybe gaming is going on. In the quick service example above, if the owner had noticed that customer complaints about long wait times were increasing while internal reports of service times were improving, this inconsistency should trigger further investigation. Monitor those and, with the trigger in place, you’ll know when things need recalibrating.

Play fair.  An easily gamed system is inherently unfair. And everyone wants to be treated fairly. If your workforce includes employees age 30 and younger, pay extra attention to fairness.  The Millennial Generation, the first generation to “come of age” after the new millennium, continues to impact the workforce of most transaction-based service businesses.  And the Millennial Generation is increasingly motivated by fairness and, at times, what seems to be new a new form of fairness. Incentives programs in which only a few people can “win” will likely not be perceived well by this group.  Team incentives or more readily-attainable incentives are more likely to motivate the millennial generation more than hyper-challenging, more lucrative, few-will-win types of incentives. 

Keep the Rules Simple. If you cannot state the program in a sentence or two, it’s too complicated to be communicated effectively. To do this, you may need to reduce the behaviors or outcomes included so the incentive can be easily communicated and understood effectively. One way to achieve this is to roll out incentives one by one over time in a cumulative fashion. We see this often with mystery shopping programs which reward for customer greeting and thanking (send off) first. Once a milestone for greeting and thanking is met, move up a level to “conversational engagement” or “add on sales” milestones.

Change the game. Raise the bar or level for experience. Playing the same video game over and over again is boring. That’s why most games offer increasing levels of difficulty based on achievements within the game.  Creating an incentive program based on levels allows you to increase expectations for longer term employees and keep the program simple for newer employees. And the change aspect of the incentive will prevent it from being perceived as a given. This will go a long way toward achieving ever-increasing fairness goal.  Plus, it’s harder to game an ever-changing system.

The first rule should always be that you can change the rules. Always reserve the right to retract or recalibrate the incentive.

When you are ready to think about the specific incentives or rewards to be used in your employee incentive program, you may find our recent article Employee Incentive and Rewards Ideas helpful.

Tagged: mystery shopper, mystery shopping, on the spot rewards, employee recognition, employee recognition & on the spot rewards, performance consulting, mystery shopper & mystery shoppers, employee incentive and reward ideas, employee recognition program,

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