The Measurement Moment Has Arrived for Rewards and Recognition...The Tools Already Exist
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As the incentive, rewards, and recognition field faces growing pressure to prove business impact, the Enterprise Engagement Alliance points to a suite of transparent measurement tools based on statistical process controls long used in total quality management.The Case for Transparent Measurement
The EEA Measurement Toolkit
Why This Matters to Rewards and Recognition Providers
The Advantage of Open Methods
A Timely Opportunity for the IRR Field
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The incentive, rewards, and recognition industry appears to be entering a new era of accountability. For years, most organizations have believed that incentives, recognition, loyalty, motivational events, and related engagement efforts create value. The challenge has been proving it in a way that finance, procurement, senior management, and clients can compare, trust, and act upon. Recent research from the Incentive Research Foundation underscores the problem: most incentive travel program owners believe their programs drive business outcomes, but far fewer are confident in their ability to demonstrate that success through credible metrics and KPIs. One report on the IRF study notes that 85% of program owners rated the impact of their incentive travel programs on business objectives as good or excellent, while only 4% were very confident their approach accurately isolates program impact, and fewer than one in four track ROI or cost-benefit analysis.
For the Enterprise Engagement Alliance, this is not a new issue. It is the issue. The EEA has long argued that the rewards and recognition field will not earn full respect from senior management until it can move beyond participation rates, redemption reports, satisfaction surveys, and anecdotal testimonials to the same type of disciplined measurement used in other areas of business.
The Case for Transparent Measurement 
The EEA’s position is that measurement should not be a black box. In the world of total quality management, standard statistical process controls and other transparent metrics are generally used. When a company uses a proprietary model whose formulas, assumptions, benchmarks, and data logic cannot be independently examined or audited, it may get a report, but it does not necessarily get a management system. A proprietary score may be useful within one vendor’s ecosystem, but it is difficult to compare programs, suppliers, organizations, or time periods if the underlying methodology is not transparent.
That does not mean proprietary analytics have no value. Many platforms can provide useful dashboards and correlations. The issue is whether the organization can understand how the result was produced, whether the same method can be repeated by others, whether the assumptions can be challenged, and whether the process helps management improve decisions rather than merely justify a program.
This is where the EEA believes the field should look to proven business disciplines rather than reinvent measurement from scratch. Its engagement program evaluation page states that the organization draws upon systems long used in total quality management, including statistical process controls that correlate results against behavior data using information most organizations already have but rarely use for this purpose.
The EEA Measurement Toolkit
The EEA now offers several related tools designed to help organizations, solution providers, and advisors evaluate engagement strategies and specific programs using transparent methods.
The Enterprise Engagement Index, or EEI, is designed to rapidly appraise how effectively organizations create value through people. According to the EEA, the EEI uses basic financial information and employee counts to analyze how well companies and industries create value through employees and customers. The EEA describes the formula as free and open source and says organizations can compare their EEI rating with customer and employee engagement, turnover, willingness to recommend, productivity, quality, and other internal measures.
The People Value Impact Calculator, or PVIC, is the more tactical tool for organizations seeking to measure specific engagement investments. The EEA says PVIC enables companies to calculate where stakeholder value is created; estimate the cost of low engagement by stakeholder group; and evaluate the impact of incentive, recognition, loyalty, and other engagement initiatives involving employees, customers, distribution partners, supply chain partners, volunteers, or other stakeholders.
PVIC is especially relevant to the IRR field because it addresses the question senior management is increasingly asking: what value was created by this investment? The EEA says the platform can correlate existing organizational data with surveys, incentives, recognition, motivational events, communications, learning, innovation, collaboration, and other engagement activities to help isolate correlation from causation.
The Stakeholder Management Assessment Calculator, powered by the Maturity Institute’s Omindex methodology, adds another layer by assessing the maturity and alignment of an organization’s stakeholder management practices. The EEA describes this as a way to identify risks and opportunities in how organizations manage relationships with employees, customers, suppliers, communities, and other stakeholders.) An enhanced version can also provide an “outsider’s view” of how an organization may appear based on publicly available information, including business and social media, ratings sites, disclosures, legal actions, and other sources.
The Master Measurement Model for Employee Performance, produced by the American Productivity and Quality Center, published by the Incentive Research Foundation, provides a free tool to help any organization apply standard statistical process controls to any type of employee or customer engagement activity.
Why This Matters to Rewards and Recognition Providers 
For rewards, recognition, incentive, loyalty, and gifting companies, the measurement issue is no longer academic. As budgets come under greater scrutiny, programs that cannot be connected to business objectives risk being viewed as discretionary, even when they are strategically important. A recognition program that improves retention, service quality, safety, sales performance, referrals, or customer loyalty should be able to show that relationship in a disciplined way.
The EEA approach also changes the sales conversation. Instead of asking clients simply to buy points, awards, trips, merchandise, gift cards, communications, or technology, providers can help clients define the purpose, goals, objectives, behaviors, measures, and financial outcomes that matter before a program begins. That turns the provider from a vendor into an advisor. This is a critical distinction. If the industry wants to be treated as part of the performance-management infrastructure of an organization, it must be able to show how its tools affect performance. That requires more than a dashboard. It requires a methodology that links tactics to behavior, behavior to outcomes, and outcomes to value creation.
The Advantage of Open Methods
The EEA’s argument for transparency is practical. Open methods can be learned, tested, challenged, improved, and compared, as is done in total quality management every day. They allow clients and advisors to examine the assumptions. They enable apples-to-apples comparisons across programs and time periods. They also reduce the risk that measurement becomes a sales tool designed to validate a provider’s own solution rather than an objective management process.
The EEA’s engagement measurement process begins with identifying the program to be measured, its purpose, goals, objectives, current evaluation process, and the related data available. If the relevant data exists, templates can be used to simplify data capture and accelerate analysis. The resulting report can include projected ROI, a key-indicator dashboard, and graphical analysis to help distinguish correlations from causation.
This is the same discipline that made total quality management powerful: define the objective, measure the process, track the indicators, analyze the variation, and improve continuously. The EEA’s position is that engagement should be managed with the same rigor and that there is no need to reinvent the wheel.
A Timely Opportunity for the IRR Field
The IRR industry has often been held back by the perception that rewards and recognition are “nice to have” rather than essential tools for achieving strategic objectives. That perception will not change through slogans. It will change when providers and clients can demonstrate how their programs influence sales, retention, productivity, safety, quality, customer experience, referrals, or other concrete outcomes.
The timing could be important. The IRF’s latest focus on measurement suggests that the broader incentive field is waking up to the need for stronger business-impact tools. The EEA’s message is that the field does not have to wait for another proprietary model to solve the problem. Transparent, comparable, process-based measurement tools already exist, and they are grounded in disciplines used for decades to improve business performance. For rewards and recognition providers, the opportunity is not simply to prove that programs work. It is to help clients design programs that work better. That starts with a willingness to be meaningfully measured.
Enterprise Engagement Alliance Services
Celebrating our 17th year, the Enterprise Engagement Alliance helps organizations enhance performance through:1. Information and marketing opportunities on stakeholder management and total rewards:
- ESM Weekly on stakeholder management since 2009. Click here to subscribe; click here for media kit.
- RRN Weekly on total rewards since 1996. Click here to subscribe; click here for media kit.
- EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020
Management Academy to enhance future equity value for your organization.3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.
4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.
5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.
Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.
