Most employee incentive programs are based on the presumed power of delayed gratification. Dangle a big prize or bonus in front of employees, the thinking goes, and they'll work hard for months to earn it.

A new kind of incentive program built around online gaming aims to change all that. Using Web-based software, the program allows employees to earn tokens for small accomplishments--coming back early from lunch, say, or shaving time off a sales call--and gamble for prizes, from iPods to prime parking spots. With its emphasis on immediate, rather than delayed, gratification, the system allows managers to skip the pep talks in favor of a kind of Pavlovian conditioning, says Brooks Mitchell, a management professor at the University of Wyoming and the founder of Snowfly, a software company in Laramie that designs such systems. "If you want your kid to get an A, don't give him 50 bucks at the end of the year," Mitchell says. "Instead, play soccer with him every day after he does his homework."

That argument makes sense to Fred Weiner, CEO of the Connection, a call-center operator based in Burnsville, Minnesota. For 25 years, Weiner has been searching for a way to motivate the customer service representatives at his five call centers, doling out incentive prizes such as cash and gift cards almost every month. But nothing seemed to work.

Last January, Weiner noticed a Snowfly brochure in an office trash can, fished it out, and gave Mitchell a call. Intrigued with what he heard, he decided to try the program. Now each time call center reps convert a sale, for example, they log on to their accounts, record their accomplishments, and receive a virtual token, which they can use as a wager in one of several games--such as a horse racing derby--that take seconds to complete. Employees can win up to 5,000 points at a time and redeem them for prizes, such as a 15-minute break (250 points) or a day off (7,600 points). And since they can't lose points, everyone's a winner.

Weiner has seen an improvement in measurable metrics, such as sales conversion, talk time, and attendance. "They are absolutely performing better," he says. The program has gotten a thumbs-up from staffers, as well. Mary Fournier, a supervisor in the Carlsbad, New Mexico, call center, works hard to earn tokens and plays games during downtime. She recently hoarded tokens for four months and used 11,000 points to buy a $100 Cuisinart, an item on the Connection's incentive list. "I enjoy the gambling aspect of it," she says. "It's a little bit of a rush."

Of course, the system could produce diminishing returns as the novelty wears off. Regular small rewards may be effective in the short term, but splashy prizes get better results over the long haul, argues Scott May, a senior vice president at Loyaltyworks, an Atlanta company that administers traditional incentive programs. "Whatever you're rewarding the employee with, it has to be compelling," he says.

On the other hand, online incentive games are particularly well suited for employees who grew up playing Nintendo, says John Beck, president of the Attention Company, a Phoenix consulting firm, and co-author of The Kids Are Alright: How the Gamer Generation Is Changing the Workplace. Younger workers are far more likely to crave performance monitoring, Beck says. "Immediate feedback manages people's attention in a way that nothing else could," he says.

Besides motivating employees, the program cuts down on paperwork and helps managers spot high achievers and laggards more easily. And unlike many incentive companies, which charge clients an administrative fee each time a point is rewarded and can bill hundreds of dollars per employee each year, Snowfly charges a flat monthly fee, which amounts to between $50 and $120 per employee each year. "It's a no-brainer from a cost standpoint," Weiner says.

In some ways, the program is priceless, according to Shelly Jameson, who supervises 250 employees at the Connection's Carlsbad call center. Before, Jameson was happy to hear a perfunctory "thank you" when she doled out year-end bonuses. Now, grateful employees approach her on a regular basis. "Some of those people never would have talked to me one-on-one," she says. "It's just a good opportunity to get to know them on a personal level."


For more information on incentive plans, go to the Incentive Marketing Association's website. The site features case studies, research, tips, and a directory of companies that offer incentive products and consulting.