Incentive Plans Case Study (outcome 4)
SUPPLEMENTAL CASE: Chapter 12
Case: Incentive Plans for Fun and Travel
For incentive plans to pay off for companies, the plans must stimulate employee interest and
motivate them to perform well. Firms in several different industries have been creative in
developing incentive plans, which have resulted in the companies receiving “Top Motivator
Awards” from Incentive magazine. A look at two of the recent winners illustrates the variety of
plans being used.
Houston-based Pappas Restaurants has over 10,000 employees working in restaurants such as
Pappadeux Seafood Kitchen, Pappas Pizza, and others. As a key part of creating and maintaining
a “fun culture,” Pappas has created an unusual job as part of its management structure, a
“Director of Fun Stuff.” This individual’s role is to develop and conduct activities that reinforce
the performance-oriented, fun culture that Pappas wants. By stressing this culture, the firm
hopes to ensure that both customers and employees enjoy Pappas restaurants. One successful
incentive program is called “Rising Stars.” Employees working as bartenders, food servers, and in
other customer contact jobs receive $20 gift certificates weekly for such actions as favorable
customer comments, attendance, and working extra shifts as needed. But employees without
primary customer roles are not forgotten, because Pappas has a “Kitchen Superstars” program
for its dishwashers, cooks, and clean-up workers, who can receive gift certificates also.
Purchased from well-known retailers such as Target, Blockbuster, and other retailers located
near Pappas restaurants, the gift certificates provide immediate reinforcement for positive
actions, as well as providing an easily used reward.
In a very different work setting, Washington Mutual, an insurance and financial services firm
based in Seattle, has used sales incentive programs effectively. One successful program was
called “Fresh Perspectives.” To motivate sales employees to generate a greater number and
volume of home loans, the company developed several different incentive plans. In the primary
plan, the firm’s sales representatives accumulated points for loan product sales. Sales results for
employees were tracked and posted monthly so that everyone knew where they were in
comparison to other sales representatives. The 400 top-producing salespeople became
members of the President’s Club. To provide special recognition of their accomplishments, the
President’s Club members were rewarded with a five-day trip to Cancun. Unique entertainment
events, jungle safaris, and other activities were participated in by the club members and key
executives. The Cancun trip was both an incentive to encourage performance and a reward for
the top sales performers.
Numerous other firms spend considerable time and money on various incentive programs. The
key focus of those programs, as well as the ones used at Pappas Restaurants and Washington
Mutual, are to motivate and reward performance.
1. Why might the use of incentives in the form of gift certificates be better than just providing
cash to employees?
2. What are some advantages and disadvantages of a sales incentive program in which the top
performers receive a trip or other large reward, while other sales individuals receive lesser
or different types of rewards?
6-7 pages, APA style.
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