Have we learned the lesson yet?

Peter Gray, an independent Motivation Consultant, presents a regular Business Events News feature on current issues in the Conference and Incentive industries.

IF NOTHING else, the one thing the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry proved is that incentives work!

As I pointed out in this column in July last year, the main problems were caused not by the incentives but by a lack of incentive expertise; by failing to set out adequate rules for the protection of customers, in setting out precisely what was on offer in terms of the rewards and for what. There was a distinct lack of control and care at all levels. And yet little has changed. We still read of major financial bodies that have been discovered doing much the same thing for which the Banking Royal Commission criticised them.

It’s the attitude of “why change if we haven’t been caught’ that’s destroying confidence in the use of incentives. Clearly the major institutions are still not using adequately qualified or experienced incentive practitioners who can design programs that work for the sponsor, the participants and the end-user. More importantly programs should be ethical in their application and this will only enhance the sponsor’s reputation.

While there is an expectation that financial institution employees will participate in any number of incentive programs during their careers it’s the duty of the sponsors (the financial institutions) to ensure that pressure is not being applied for participants to be unethical in their dealings or, if they are discovered being so, to apply appropriate sanctions which will affect the employees’ ability to succeed or even continue in the program. Financial incentive programs can produce extraordinary results and still be entertaining and exciting as well as personally challenging. While the regulation of the finance sector in the UK differs from that in Australia a six-to-one (or even higher) net incremental return on investment could be achieved in that market by tight program control, well communicated terms and conditions and the right reward. ‘Closed’ programs - whereby the number of successful participants is limited - can also increase competition. The use of incentives is a proven and successful marketing strategy; the incentive industry must ensure that it remains above the level of unscrupulous sponsors.

Peter Gray is an independent, Accredited Incentive Practitioner and motivation consultant. He can be contacted at peter.gray@motivatingpeople.net.