Get on the inside track

For some time now the main focus for many companies has been the customer. Now attitudes are changing and many businesses are realising that happy staff are often the best promoters of a brand and a great way to generate customer loyalty

One idea that inevitably emerges every January with the same predictability as a post-New Year hangover, is the sense that half the workforce has “find new job” as one of their New Year’s resolutions. Even in those companies where this might in fact be the case, the reasons why staff may have such seasonally itchy feet, as well as the ways they might be motivated to stay, are unlikely to be well-understood by management.

Two misconceptions that need to be tackled head-on, says Maritz account group manager Andy Cattell, are the belief that staff discontent is usually pay-related, and that short-term incentives are a quick-fix solution. Of course, he says, pay and conditions may be a factor, but far more commonly a lack of value will be to blame: staff feel unvalued and do not value the company or brand.

“You have to ask all those line managers out there, how many times they have been at an exit interview and been surprised by the reasons that the employee gives for leaving,” says Cattell. These are likely to have more to do with lack of career development, lack of recognition and poor communication, he believes, than with poor pay.

On staff motivation, Cattell explains: “There’s been a shift in thinking, away from conventional incentives towards ways in which you can involve staff in a brand. We internalise brands. If a client comes to me and says, ‘I’ve got a problem with staff attrition’, the last thing we would do now is put together an incentive programme.”

Cattell’s colleague, Maritz planning director Anne Gilbert, emphasises that attrition, in the sense of actual staff loss, is only the most extreme form of “opting-out” of a brand. The employee may turn up and come to work, but mentally may be elsewhere, and not engaging positively with the job or the company. If that individual is dealing directly with consumers, in a retail environment for example, such demotivation will be noticed. What may be lacking, says Gilbert, is not only a sense of pride in the job, but pride in the brand.

A major financial institution approached Maritz with just this sort of problem, Gilbert says, in the wake of a campaign that generated expectation in the consumer. “We organised a series of activities with staff, starting with establishing what the brand meant to them,” she says. “If you want to prevent opting out, you have to find a catalyst that will engage staff and get them behind the brand.”

Shift in focus

Projectlink chairman Richard Kirk believes that the limitations of the Nineties’ focus on customer relationship management (CRM) are there for all to see. Instead of thinking that a database and targeted communications can provide an alternative to value and service, he says, companies are coming to realise that staff are their greatest asset.

“People appreciation” is by no means a new concept, but this latest philosophy to be endorsed by US management gurus fits in particularly well with two related business trends, says Kirk.

One of these is the evolution in company structures, which is seeing more important functions outsourced to suppliers who, for the periods that they are retained, are treated well. The corollary of this, though, is that those staff who remain the core of the business tend to be treated less well. “Now companies are trying to ensure that this kind of discrepancy is eliminated so that retention of core staff can be improved,” says Kirk.

The second trend to underpin people appreciation is the shift from personnel to human resources. This move is not just a cosmetic one, Kirk maintains, but brings with it a centralising of recognition and reward programmes. Putting “recognition” above “reward” is itself significant, he says, and demonstrates a clearer understanding of what matters to staff.

“For recognition strategies to work, you have to know what motivates each person,” Kirk argues. “And to do that, you have to know the individual.” It is, he says, often surprising how little line managers know about their own staff.

Behavioural patterns

Beyond the question of who is gaining recognition, there is the issue of what behaviour should be rewarded. Being an active communicator, having a can-do attitude and avoiding the cynical middle-management trap could all be worthy of recognition, says Kirk.

Like Kirk, Capital Incentives managing director Graham Povey places great emphasis on this new-found focus on the employee. Unlike Kirk, he prefers the term employee relationship management (ERM) to people appreciation – and sees it as an internal complement to CRM.

Whatever workplace tensions and dissatisfactions may surface in the New Year, says Povey, it may simply be too late to tackle them. Clearly, any strategic approach to motivating staff must see this as a year-round concern. The ERM perspective has meant that incentive schemes are no longer solely the preserve of sales teams, rewarded for hitting a given target, but apply equally to non-sales staff. This means that criteria have had to become more subjective, argues Povey.

Companies working in performance and motivation like to be seen to practise what they preach. With around 100 staff, Capital Incentives loses only about five per cent a year, says Povey. He, like others, points out that the company can motivate staff with its own products – vouchers, travel and events.

Povey admits: “Being in the North-west, we’re not surrounded by competitors, and therefore not so likely to have staff poached. Then again, I don’t think that’s the only reason for a low turnover.”

For Maritz with its UK office in the South-east, the problem of local competition is a real one, and puts pressure on the company to pay even more attention to staff motivation. Once again, Cattell stresses factors other than pay rates concerning retaining staff. “We look more at development issues, asking people what career aspirations they have and how we can help them achieve them,” he says.

The same logic is true for other businesses, says Cattell. “One retailer we have been advising had a high staff turnover and wanted to know how to retain staff,” he says. “The options were either to award staff an extra 5p an hour, or to set that aside for personal development and skills for life. There is probably a greater sense of value in skills of this sort.”

Communicate the right message

Equally valuable is a willingness on the part of the company to communicate: staff want to know how the company is doing, says Cattell, and value the feeling of fitting into the organisation.

Gilbert adds: “The top team has to know what the key messages are and how to convey them,” she says. “The same consideration should be given to internal messages as external ones. It takes more than a message on a mousemat to get staff to think about the way they work and are engaged in the company’s future.”

Directors of P&I consultancies acknowledge that the fact they are “supposed to be an incentive company” can be thrown back in their faces by their own employees. But, as you might expect from businesses that advise others on staff motivation and retention, most pride themselves on having low rates of staff turnover, as in the case of Capital Incentives.

As you might also expect from companies that sell ideas, ways of sparking inspiration among staff are given great importance. At Maritz, Cattell stresses the role of ideas programmes where individuals are given full recognition for their contributions, and the company is clearly represented as one that is continually learning and open to change.

For its part, Projectlink runs an internal programme, the Projectlink Gold Cup. According to Kirk, the scheme takes its inspiration from horse racing, with the relative progress of staff shown graphically – and publicly – on a “track”.

Staff can be nominated by managers, by their peers or by customers for valid suggestions in or outside their own area of responsibility, for exceptional customer service or for demonstrating commitment. Kirk, like many others, will be hoping that his workers do not fall at the first hurdle in January.

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