Melissa Van Dyke, President Incentive Research Foundation

1. Transforming Measurement: Improving ROI in Incentive Programs MelissaVanDyke, President Incentive Research Foundation

2. “The Way We Were” THE MASTER MEASUREMENT MODEL - 2002 BENEFIT AND FEEDBACK REPORTS

3. Master Measurement Model • Step by Step • Measure Performance • Dollar Values • Program Budgets

4. Vital Elements • Base Data • New Data • New/Base Data • Weights • Weighted Results

5. Measuring Performance: 3 Tenets • Balance • Weight • Criticality

6. Proposed Family of Measures • Weighted calls per rep 25% • Total service cost per weighed call 25%* • Time between visits 20% • Customer satisfaction survey scores. 20% • Time to complete paperwork 10%* * A decrease means improvements for this measure

7. PERFORMNCE REPORT Critical: Total Weighted Result, 102.5. Performancerose 2.5%

8. Benefit Report: Moving to Financial Data

9. Current State: Simple ROI ABSENTEEISM EXAMPLE

10. SIMPLE ROI Set Goal Monetize Benefit Set Budget Calculate ROI

11. Example • Set Goal: • Improve Absenteeism Index by 8% • Monetize Benefit (Collaborate!) • 10 absences a week lead to $5000 in overtime and wasted management effort • 1 % change in index = $10,000 cost savings • Establish Program Budget/Cost • Calculate Program Benefit and ROI

12. Calculate ROI Benefit = ((New Data - Base Data) * $ Per Unit Improvement) ROI= (Program Benefit - Program Cost)/ (Program Cost)

13. Calculate ROI Benefit = (98-90) * $10,000) = $80,000 ROI= (80,000- 50,000)/50,000 = 60%

14. Safety Courtesy Show Effectiveness More than Just Tasks:Disney Recognizes 4 Attributes

15. Immediate Future IRF MMM TOOL

16. Missing Elements of MMM Adverse Impact Causality Confidence

18. Real Time Walk Through of Phase I IRF tool. http://www.myvirtualpartner.net/irf/

40. Near/Distant Future LINKAGE AND TARGETING

41. Additional Considerations Linkage Targeting

42. Lessons From HR & Human Capital Management Linkage & Predictive Analysis

43. Lessons From HR & Human Capital Management

44. Lessons From HR & Human Capital Management Measuring and Predicting the Impact of Human Capital Investments

45. Stages of Measurement

46. 10 Measurement Principles • Number and “ease” of measures: 2 to 5, not complex • Baseline data • Involvement • Targeting • Linkage • Causality • Predictive analysis • Unintended Consequences • Conservative financial assumptions • Demonstrating ROI

47. FUTURE?

48. Give us “The One Big Thing”