This appliance retailer replaced expected, predictable bonuses with dynamic rewards, motivating employees to perform at a higher level.
“If they sell more, they can earn more. But now it doesn’t take me hours each month to figure it all out.”
Cathey’s started as a small family business in 1954. Since that time it has expanded to four bustling store and service-center locations across Tucson and South Arizona, and has grown to a headcount of 37 employees. The business now specializes in service and sales for sewing machines, vacuums, and home theater, with sewing machines making up the bulk of sales. The business is also transitioning to a ‘brick and click’ model, with eCommerce supplementing in-store sales.
Matthew Crandell is the Operations Manager at Cathey’s, part of the 3rd generation of family members working in the business. “Even as we’ve grown larger we’ve tried to keep the same culture and attitude,” he says.
While proud of its culture, Matthew had been challenged to solve a growing problem in the business: the time taken to manage its rewards program. In particular, admin and fulfilment tasks related to bonuses had become a major drain on Matthew’s productivity, consuming hours of valuable time each week. He needed a way to eliminate this time sink without reducing the effectiveness of rewards.
In addition to this, Matthew faced another challenge. This time-consuming, manual system of rewards wasn’t succeeding in its aim: to motivate a higher level of performance. Bonuses were the same each month, and therefore, they had become expected. Employees tended to think of these regular cash bonuses as an extension of their salary, giving them no more power to motivate than a regular paycheck.
Matthew was spending several hours each week on the administration and fulfilment of cash rewards and bonuses. This highly sensitive task could not be delegated, even though it took time away from more valuable tasks like hiring talented sales associates, a constant need in the business as it grew. Matthew knew that automating as much of the rewards process as possible was the only workable solution to a growing problem.
Employees couldn’t visualize their progress toward goals without making an enquiry. This had a negative impact on two fronts. First, it meant that the link between positive actions (such as sales) and rewards was weakened, because employees couldn’t see how their positive actions helped them progress toward their goals. A Chicago Booth Business School study demonstrated that being able to visualize progress toward a goal, as well as the remaining work required, increases commitment and motivation. The current system didn’t allow this. Secondly, employees couldn’t gain insight into their progress without taking up more of Matthew’s limited time.
In a recent study of over 1,000 employees, 62% said they had used their bonuses to pay bills, or couldn’t even remember how they had spent their bonus money. This is because employees feel obliged to spend cash bonuses on ‘needs’ rather than ‘wants’. The employees rated gift cards as much more motivating than bonuses, simply because they could not be spent on basic expenses, alleviating employee guilt about treating themselves to something truly rewarding. Matthew needed a way to replace aspects of the company’s familiar cash bonuses system with rewards that employees would actually get excited about winning.
Matthew decided to roll out Arcade across his stores. Since adopting the platform, Matthew has been able to reduce the time spent managing rewards by 20x. “I used to dedicate hours every week to tracking rewards, figuring out totals, and updating people,” he says. “Now it’s maybe 5 minutes a week.”
Matthew no longer needs to field enquiries about where sales associates are tracking in relation to their sales goals. Instead, sales associates can get live updates on their progress via the Arcade app. They have instant visibility on what they’ve achieved and what still needs to be done, motivating them to perform at a higher level to unlock their next reward.
“Arcade has sewn an atmosphere of competition and camaraderie within our company, and has given us the ability to recognize each other in ways we may not have otherwise done. All in all, a valuable tool for the entire team here at Cathey's.”
— Shane Miller, Store Manager at Cathey’s.
With Arcade, Cathey’s has significantly reduced its reliance on expected bonuses. Instead, the company has shifted its focus toward offering powerful dynamic rewards. With Arcade, employees can see how many ‘tokens’ they’ve earned (the rewards currency in Arcade) and redeem tokens for their choice of reward. Rewards can include gift cards for their favourite store, restaurant, or theme park. These meaningful rewards create long-lasting memories that have significantly lifted motivation.
Matthew says he’s impressed with the level of support he’s received from the Arcade team. “Everything has been really good,” he says. Arcade’s support team has driven the onboarding process for Cathey’s stores, allowing Matthew to focus on growing the business. Since launch, a dedicated account manager has been on-hand at all times to give suggestions and advice, and to assist with every aspect of automating rewards using Arcade. Matthew’s account manager ensures he and his staff are always getting the most from the platform and its features.
Matthew has saved enormous amounts of time by automating reward fulfillment and administration with Arcade. He says that his staff are more motivated than ever before and love having increased visibility on their progress. He’s noticed an uptick in performance among sales associates using Arcade.
In short, Arcade has improved motivation while reducing the amount of time and effort spent on rewards by 20x.
See how 10,000+ teams are using gamification to increase employee performance and earnings!