This spring Badgeville partnered with employee motivation research firm Make Their Day to survey over 1,200 workers in finding out what makes employees do their best work. The study found that employees most value Recognition, Opportunities for Growth, and a Fun Work Environment to keep them happy, engaged, and productive. Gamification for business offers a scalable solution for contemporary companies seeking to create positive work environments.

Employee Motivation

Key Findings:

No-Dollar Rewards and Recognition Are the Most Valuable Motivators

• “Free” recognition and virtual rewards have become increasingly important in today’s workforce over tangible, high-cost rewards.
• 83% of employees said recognition for contributions is more fulfilling than any rewards and gifts.
• 71% said the most meaningful recognition they have received had no dollar value.

The Type of Praise and Source Matters

• 69% said that being recognized as an individual over a team was more motivating.
• 76% found praise from their peers to be very or extremely motivating.
• 88% found praise from their managers to be very or extremely motivating.
• Only 14% said their best recognition or reward was of a gift over $1,000.

Keep Employees Happy with a Fun Work Environment

• 90% of respondents said that a fun work environment is very or extremely motivating.
• A fun work environment was ranked higher than other factors such as job titles, cash equivalents, and gifts, in regards to what motivates employees.

Q: How do you prove, and with what metrics, that gamification has worked, to a business who has signed up with you?

A (Brent Carter): We have a couple main metrics we focus on: active loyalty users and monthly loyalty repeat visits. The businesses who participate in our programs care deeply about the quality of the audience, how active they are and how often they come back. If diners have a positive experience with our site and with our business partners they are inherently more attractive to both parties. For example, we offer access to an online portal for our restaurant partners and they can review feedback from our diners on their specific dining experience at their restaurant. This is valuable insight for the restaurants to continually improve their experience. Gamification has increased the engagement of our loyalty users, thus increasing the downstream effects for our partners.

It goes like this: satisfied customers begin with satisfied employees. We’ve known that for decades. What we didn’t always know was that game design techniques — when properly integrated into a reward and recognition program — could lead to increased employee satisfaction.

If you think about the concept of reward and recognition programs, they’re already gamified to a degree. Employees perform behaviors, those behaviors are reinforced by members of a community, and points can be earned for achievements.

It’s simple. Perhaps too simple.

The truth is, it’s not just about rewarding behaviors. It’s about connecting employees to a purpose and creating a clear path to success. Success not only for the business, but for the individual as well. To successfully motivate and drive behavior, programs need to offer unique goals and objectives to individuals and provide feedback to increase the effectiveness of each one. Equally important is an attention strategy that is capable of onboarding and sustaining participation throughout the life of the program.

As a provider of reward and recognition programs to Fortune 500 companies, Maritz Motivation Solutions has always offered opportunities for recognition to our employees. But this year we made a special effort to update and upgrade our programs. And we used gamification to support this strategy.

Our online recognition platform called we.com incorporates peer-to-peer, manager-to-team, and social recognition capabilities. The system also accounts for top performing team and individual recognition, employee events and communications, and employee recognition training. An umbrella theme of Motivation Nation ties all the initiatives together and recalls the company mission: to make business better by understanding and motivating people.

Michelle Pokorny, solution leader for employee engagement and recognition, shared some of the results of the revamped and gamified we.com program in a presentation at the RPI Annual Meeting. Results included doubled participation and an increase of 115% in recognitions given year-over-year. Maritz Motivation Solutions also saw significant improvements in employee engagement scores after updating and relaunching recognition for its team members in the last year. Here’s how we did it:

1. Through our work with The Maritz Institute, we’ve uncovered solid evidence which suggests that people are motivated by opportunities to earn status and achieve mastery just as they are by opportunities to earn rewards of economic value. We’re leveraging the Badgeville platform in conjunction with our own to deliver a reward experience that speaks to each of these drives.
2. A critical element of goal-setting is the ability to view one’s progression. It is crucial that this is not overlooked in a motivation program. Programs that lack progress indicators risk causing confusion or even frustration for program users. By integrating Badgeville’s platform into our own, we are able to support dynamic, flexible, and visually interesting expertise tracks and progress indicators in real time.
3. We now support additional opportunities for choice by adding visual tracks toward achievements. By giving program users choice on which goals to pursue — and in what order — we’re creating personal meaning at the same time.

Creating meaningful recognition and reward experiences for our employees has led to clear business results not only for Maritz Motivation Solutions, but for our clients too. We realize that people don’t have relationships with brands. People have relationships with people. We consider ourselves leaders in the business of motivating people and we are excited that we can bring these results not only to our own organization, but to our clients as well.

In addition to pointing to Gartner research showing that 40% of global 2000 organizations are expected to have at least one gamified application by 2014, Capgemini also relates several examples of how gamification has driven recent organizational success, from an insurance company that saved $18 million per year using gamification to solicit ideas on process improvement from employees to successful implementations at EMC, Autodesk and Samsung.

Badgeville Co-Founder and Chief Strategy Officer Kris Duggan also provides key insights to readers on how leaders across organizations, from sales to HR and beyond, can motivate the valuable behaviors that foster employee collaboration and drive tool adoption. And the authors give strategic recommendations to ensure that a gamification program drives the right behaviors and continues to do so, through a combination of clear goals, continuous measurement, proactive management and an iterative approach.

While the past few years have seen gamification rise to prominence for its ability to drive customer loyalty and consumer engagement, the Digital Transformation Review is an important reminder of gamification’s power to measure and motivate behavior within organizations, as well. The problem of disengagement is not limited to external users only. Gallup reports that 70% of American workers aren’t engaged with their jobs; companies see adoption rates of just 50% for enterprise applications. In fact, evidence shows enormous IT investment levels have overwhelmed internal users, resulting in productivity losses averaging 17%.

The need for internal change, then, is clear on multiple fronts. We are glad Capgemini has highlighted strategies enterprises can use to drive it effectively with gamification.

Recap: Why the Old Way is Fading and What’s in the Future
As Emily detailed, today’s loyalty programs are siloed and stuck in a rut of rewarding for one behavior: purchasing. Before the web, this approach made more sense because transactions were one of the only behaviors companies could track, outside of phone calls and mail-in rebates. As she explained, this can become self-defeating because of the transactional relationship it creates. A customer buys nine sandwiches, he gets the tenth free. Another flies 30,000 miles, she gets a free flight.

Over time, the transparency of such a program can hinder long-term engagement, because as customers become conscious of needing to spend a specific amount of money in order to get something back, they realize you’ve set a dollar value on their overall worth to you. (If a sandwich is priced at $6, they need to spend $54 on nine sandwiches to get the tenth free — which is, still, only worth $6.) Even companies that launch without the burden of legacy loyalty programs still subscribe to this model.

Your Questions and Their Answers
We had a great Q&A at the end of the presentation but ran out of time for it all! Here are some additional questions we couldn’t get to during the event, along with answers…

Q: I imagine this won’t work for all industries; for example, I can’t see this working for an airline. Can you speak to that?

A: Gamification can work for almost any industry. It all depends on the context of the environment and the intelligence behind the design. From a design perspective, you can allow gamification to complement, rather than usurp or disrupt, your current loyalty program. For example, on an airline, you have your traditional mileage or status points. With gamification, you could add another point or reward bucket that focuses on engagement with another touchpoint, such as your mobile app or social media channels. As people check in to different cities, perhaps they earn could points and achievements related not to miles or upgrades but to special promotions and partnerships the airline has in that specific area. Or you could allow the gamification-based incentives to only account for a fraction of the traditional behaviors (such as purchasing plane tickets).

Q: I can see how this might be effective at the beginning, but I could see the risk of customers losing interest as they do not receive tangible rewards. Do you have proof of LONG TERM loyalty for customers?

A: Great question. Any gamification program is an ongoing, iterative process. Many of our customers are already nearly two years into their programs. Samsung, Bell Media, EMC and other major names have sustained their modern engagement programs by frequently listening to the rich behavior data in The Behavior Platform, and configuring new engagement mechanics to keep the experience fresh and engaging. That’s why many customers take advantage of our Behavior Lab and services.

Q: To build on the internal sell dilemma, is there any industry data that would demonstrate tangible value — either increased revenue or improved customer satisfaction?

A: Badgeville customers have driven massive increases in acquisition, retention and conversions, so it just depends on where you want to start and what’s most important to you. In the loyalty use cases, we often look at what key performance indicators you might have in place, such as repeat purchases or lifetime value. Then, we look to see what behaviors might drive in support of those KPIs. One I like is customer advocacy — looking at your most hyper-engaged customers. According to Deloitte, those customers can drive 2x as much revenue as a normal customer. Check out our customer case studies to see some of these in action.

Q: Are there tools we can use to implement gamification, or does it need to be custom-built by engineers?

A: There are absolutely tools! The Behavior Platform allows you to identify, measure, and reward user behavior with a vast set of game, reputation and social mechanics put at the hands of the business user. For gamified visualizations, we can integrate with your site or app using lightweight client-side languages, such as JavaScript, that weave seamlessly into the user experience.

Q: I am VERY intrigued with how we can use this in our golf course. Our management company manages over 25 different golf courses on the West Coast and are always looking to blaze the trail in our industry.

Many Badgevillagers (including our CEO) are golfers. We’d move mountains to help this loyalty use case! We’ll reach out to you right away.

In an email today, Marketo CEO Phil Fernandez — along with thanking the “Marketing Nation” that includes customers, partners, employees and 27,000 online community members — said, “In today’s data-centric, multi-channel business environment, marketing professionals are being pushed to fundamentally change how they engage and interact with prospects and customers.” We completely agree. Marketo’s online community uses Behavior Platform-powered gamification to achieve this critical customer engagement quite successfully.

Marketo is a rockstar today

Marketo was already finding success with their Community, but they wanted to increase adoption of and accelerate customers to maturity with their software even more quickly. By identifying and rewarding high-value behaviors like asking questions, submitting and voting on ideas, watching videos and more, they drove impressive lift in the daily activities that power healthy, active, engaged communities.

The success of Marketo’s launch today (as of this writing, the rise is impressive) highlights the importance of being to go beyond reaching out to customers and prospects to identify, incentivize and reward the key behaviors that are the nuts and bolts of what turn users into knowledgeable, valuable advocates. Marketo’s marketing automation and The Behavior Platform’s proven engagement mechanics allow marketers to do that. It also highlights the success companies can achieve when they do. That’s why we’re very proud to power Marketo’s “Marketing Nation,” and proud to congratulate their work today.

Badgeville helps companies use gamification to incent and reward employees for completing the important, but often repetitive and less naturally rewarding, tasks that underpin business success. Additionally, it enhances daily work practices by making all enterprise applications more engaging and social. Here are six critical examples of how Sales, Finance and Human Resources can drive success with gamification:

1. Keep the Pipeline Clean. It’s extremely important that pipelines be kept clean and accurate to optimize the marketing budget and sales team growth. But for sales reps, celebrating a solid close to the prior quarter or diving back into selling to make up for a rough couple of months usually take priority over updating their pipeline. Sales managers can use gamification to reward reps for having the most accurate pipeline each quarter.

2. Encourage Contribution to a Deal. Most sales teams have reps with their own unique areas of expertise and experience. While the rep who closes the deal and his/her sales development representative will likely be the only team members to obtain a spiff, gamification enables the sales manager to reward others who contributed along the way. Implementing gamification within the company CRM system lets a sales manager offer a thank you badge to team members across the organization, even beyond the sales team, a sales manager can encourage cross-functional collaboration and creating a more efficient sales team.

 3. Incentivize Paperwork and Other Administrative Requirements. Paperwork is unavoidable in areas like expense management and benefits enrollment. DocuSign can make paperwork simpler and more secure, but when employees find other tasks more exciting and pressing, you still need a way to get them to do it. Why not make it fun? Rewarding employees with either peer or management recognition — or even tangible incentives — for completing required forms can create a friendly competition where employees try to outdo one another.

4. Manage Budgets and Reduce Costs. Most times, one’s reward for reducing costs within a department is…being given less budget to work with in the future. Budget management is another prime area in which peer or management recognition can go a long way towards encouraging people to put more effort toward reducing costs for the organization.

5. Motivate Employees to Learn and Participate in Training. Gamification can help spur employees to complete things like mandatory HR training, which is often not high on their list of things to do during their busy day. You can use a gamified platform to track these activities and opportunities and to showcase employee participation. As an added benefit, the platform maintains a record of all employee activities in the program, which is quite valuable information when it comes time to consider promotions, raises and other tangible rewards.

6. Map the Path to Career Success. Peer mentorship is a powerful motivator that drives employees to want to succeed. Using gamification, HR departments can create transparent, mission-based career paths that show the steps employees have taken to level up in the organization. By showcasing this behavior in a gamified platform, other employees can see what it takes to become the top salesperson as this mentor provides a breadcrumb path to show peers the way to the top. You can even design such programs to allow team members to recognize one another for contributions made toward a common goal.

• SIIA Codies — Badgeville named Best Cloud Platform as a Service
• Gartner/1to1 Media CRM Excellence Awards — Badgeville-powered implementation wins customer Autodesk top recognition in Integrated Marketing Performance for its use of gamification in software trial marketing
• Edison Awards — Badgeville wins a Thomas A. Edison Marketing Award in the category of Measurement & Management Tools, alongside Optify Connect
• AlwaysOn OnDemand 100 — Badgeville selected as a top SaaS and Cloud Computing company; makes the AlwaysOn list of 100 top private companies for the second year in a row
• 2013 CRM WizKids — Badgeville named a winner and cited as outstanding in the CRM market

We are honored to be recognized alongside the top companies in cloud computing, SaaS, marketing and CRM. These awards highlight the magnitude of gamification’s impact on mission-critical areas of the enterprise.

Read more about Badgeville’s award wins here.

• Reward the user with virtual badges
• Reward the user with prizes and monetary rewards

I’ll skip right to the big reveal: successful Gamification usually involves neither of these. The first thing to understand is that there’s no such thing as a virtual reward. Badges aren’t rewards — they’re symbols of rewards. A Gamification program that starts and ends with badges is destined for failure. Most people get this on an intuitive level, which is why so many assume that prizes and monetary rewards are the solution. So it might come as a surprise to learn that offering monetary rewards doesn’t work very well, either.

The extrinsic rewards problem  (a.k.a. “Pay them More”)
The benefit to extrinsic rewards, and the reason why they seem so appealing, is that they’re really easy to design. Cash bonuses, gifts and the like don’t take much thought. The problem is, monetary rewards invite employees to do math. And when people do math, they almost always come to the conclusion that they aren’t being paid enough. It’s human nature. “I worked the weekend for a $100 coupon? That’s only $6.25 an hour!”

The obvious solution, then, is to offer more money,  but unfortunately there’s a limit on the amount of money you can give your employees before it becomes unprofitable. Salaries tend to be market driven, and it usually isn’t feasible to exceed them significantly.

It gets worse
And we haven’t even started talking about the studies that show monetary rewards can actually hurt performance. The thing about monetary rewards is if the math is bad, employees feel insulted and if the math is good, they have all this stress over all the money they’re going to lose if they screw up. Salaries are guaranteed but incentive programs aren’t. Plenty of studies have shown that nothing hurts performance as much as stress. The bottom line is, motivationally, extrinsic rewards are often a lose-lose proposition.

So what’s the alternative?
If the answer isn’t badges for the sake of badges, and it’s not badges for the sake of prizes, what could the answer possibly be? Before you throw up your hands and walk away, I’ll say that there is a solution — it’s just not a terribly obvious one. And it involves discussing human motivation.

What motivates people?
Why do people do the things they do? This is possibly the single most complicated question facing humans. Fortunately, we can frame it a little because we’re specifically talking about workplace motivation.

Employees at Work
Employees are people who are being paid for their time and effort. The employee-employer relationship is a directed relationship (the boss tells the employee what to do), but it is also a voluntary relationship (the employee can quit their job if they want). It’s important to recognize the voluntary nature of work because it means employees have options — they choose a particular job not only for its salary but for its benefits and opportunities:

• Developing skills and reputation
• Interesting challenges
• Building professional connections
• The satisfaction of getting stuff done (tasks that have a meaningful and structured end)

Early last century, employees might have stuck with a job simply for the pay. These days if an employee feels like they aren’t getting all of the points above, there’s a stronger chance they’ll start looking for a new job. According to researchers, skilled employees are only going to become more difficult to find and retain in the future, and fulfilling all of their motivations is going to be essential in doing so.

Remembering the complexities of employee motivation can be hard. To simplify it, think about the list of motivations from the perspective of how employees want to feel:

• Smart
• Successful
• Socially relevant
• Structured

How does Gamification address these motivators?
The long answer would take at least four more articles to explain. The short answer is: by connecting badges to meaningful personal stories of learning, success, social connections and structure. Gamification is all about setting goals, tracking progress and substantiating the kinds of personal success that typically go unnoticed or underappreciated.

So…when to use money as a motivator?
Is there any time when it’s a good idea to do so in the workplace? The answer is almost always no. You can offer employees bounties to do extra jobs, such as with referral bonuses, but this isn’t really Gamification. It’s just another employment contract. (In the case of a referral bonus, employees are given the opportunity to work part-time as a recruiter).

Monetary rewards to motivate core workplace responsibilities only make sense in the rare cases where employees already feel smart, successful, socially relevant and structured. If these intrinsic motivations are already met, and the company still wants to incentivize a little more performance out of those willing to go the extra distance, a monetary prize, for top users, might be appropriate — but only if the intrinsic motivators have been addressed first.

Badgeville’s Omar Divina appeared on CNBC’s Big Data Download today to discuss the rising trend of gamification in the enterprise. Watch the clip to hear all about how hi-tech leader EMC improved key behaviors within its EMC Community Network with gamification:

• 21% increase in user activity
• 10% increase in website visits
• 15% increase in replies to discussion threads

You’ll get the inside track on EMC’s success and a few key facts about gamification’s rise, too. Check out the interview (3:40) and recap on Yahoo! Finance.