Incentives Energize Employees - Just Ask HSBC

Five- and six-figure cash awards aren´t unusual for employees with great ideas that save the financial services firm money. And, says HSBC (www.hsbc.com)  vice president of compensation Chuck Dwyer in this installment of HR at the Frontline produced on Veritude´s Workforce Insights (www.veritude.com), you don´t have to be a senior executive to win one.

In today´s workplace, incentives tailored to the needs of employees play a critical role in motivating them. In a 2004 Maritz survey of 1,002 employed adults, two out of three maintained that an incentive awards program is a factor in their future employment at a company. Seventy-four percent of 18- to 34-year-olds feel that way. And 68 percent of respondents said additional incentives would motivate them to be more productive at their jobs.

Still, 55 percent reported they aren´t happy with their own employers´ incentive programs. This high percentage coupled with the greater importance that younger employees place on incentives, should concern companies that haven´t updated their programs for a while. Younger workers are more apt to change jobs and, as the economy improves, companies risk experiencing a higher turnover, which costs money and hurts morale.

Surveys show that today´s employees also favor incentives of real value to them. Employees younger than 40 tend to favor flexible work arrangements, skill development, feedback galore and tangible rewards such as money and tickets to sports and entertainment events. Baby Boomers, those born between 1946 and 1963, prefer retirement planning help, flexible retirement options, training and sabbaticals. Older workers, even those of retirement age, value flexible schedules, part-time hours and temporary employment.

Incentives Are Ingrained in the HSBC Culture and Get Results.
HSBC - North America is one company whose employee incentive programs are gaining increasing recognition, helping the financial-services company gain coveted spots on "the best places to work" rosters compiled by national and regional organizations. Employee engagement isn´t new at HSBC; it dates back to the early 1980s when employee suggestion programs acknowledged employee expertise in getting things done better, faster, cheaper and smarter.

HSBC is gaining positive attention for its tailor-made rewards programs developed to recognize employee achievement. In addition, its 200-plus incentive programs span all levels. More than four in five employees - managerial, non-managerial, professional and nonprofessional - receive an annual bonus or incentive reward.

Indeed, top employees exceeding their business performance goals receive cash incentives, merchandise awards, exotic trips, family vacations, SUV and sports car leases, new home furnishings, home additions and scholarship annuities for their children. For just two of the company´s incentives programs - Great Ideas and 4* Star Performance - the company awarded 10 top-performing employees rewards that totaled nearly three-quarters of a million dollars.

Since 2002, more than 2,200 employees have submitted more than 3,400 suggestions for "valuable and viable efficiency and cost improvement." The company has adopted more than 240 of these "great ideas" suggestions and benefited by saving more than $6 million. Employees rewarded for their ideas receive generous cash, stock and merchandise.

Simple Formula: Save the Company A Lot of Money, Get A Lot of Money.
Janice Stanley is one HSBC employee who benefited from having a say in how the organization operates. As an underwriting director, she was determined to streamline a consumer-lending underwriting process using innovative technology. She saw a way to make the process much more efficient and productive for bank branches that sell loans and for back-office teams that make sure those loans are underwritten and processed as quickly and accurately as possible.

She suggested an online paper-processing environment for faster turnaround, easier document retrieval and better data retention. She was even put in charge of the approved project. In its first year, the online underwriting process generated tangible savings of nearly $2 million. For her efforts, Ms. Stanley received $100,000 from her business unit senior management and an additional $100,000 from the company chairman.

Another HSBC incentive program, the 4* Star Performance program, honors outstanding collections, bankruptcy and credit-counseling employees in various business units. Each year, nine eligible employees receive $50,000 plus a $10,000 dream award. In addition to these annual performance awards, quarterly, monthly and on-the-spot cash and merchandise awards are earned by exceptional employees in each business unit.

In today´s competitive environment, when talent really matters, your employees´ intellectual capital ranks by far as your organization´s great asset. It´s critical, therefore, that companies not only attract the most talented people, but also work to retain them. Incentives play an important role in achieving this goal. But the one-size-fits-all approach to incentive programs doesn´t suit today´s multigenerational workforce.
Are you giving your employees the incentives they want and deserve?

The article originally appeared in to Workforce Insights, an online resource about emerging labor trends and issues produced by Veritude (www.veritude.com), a provider of strategic human resources and a wholly owned subsidiary of Fidelity Investments Company. Headquartered in Boston, Veritude serves clients throughout the United States and Canada. To review other articles, research and expert analysis relevant to HR professionals seeking to stay informed, please visit www.veritude.comFor more information, contact: inquiry@veritude.com;

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^©2005 Veritude, LLC.  Reprinted with permission.  This article originally appeared in the June 2005 issue of Workforce Insights.