A recent article by Forbes asks an intriguing question about what motivates employees more – incentives vs. recognition. You can read the entire article for elaboration on each question (below) that companies should ask themselves:

It takes two to tango. These days, however, many chief executive officers worry they may be dancing alone with their employees standing idle on the sidelines. The recession has pummeled employee engagement, and poor employee morale has left CEOs feeling out of step with their workforce. What can you do to get your workers moving again? How do you capture their hearts and give them back the drive to do their very best?

Two tools are often prescribed to CEOs by their human resources experts: incentive programs and recognition programs. Incentive programs are contests usually limited to a specific group within a company, such as sales, in which employees compete to win some prize. By contrast, recognition programs acknowledge and reinforce the accomplishments of the majority of employees. They are more about long-term goals and values.

When and how these two approaches are best used can get confusing. As a CEO who has dealt with incentives and recognition for more than a decade, I offer five questions for you to ask to help you determine which may work best for you.

1. Is your company morale in a state of emergency?
2. Do you know what really motivates your employees?
3. Do you just need to hit a quarterly target or deadline?
4. Are you trying to motivate your entire workforce or just your star performers?
5. Are you and your team committed to making employee engagement both an art and a science?

BusinessWeek offers thoughts on how to turn around a struggling business by studying your customers and paying close attention to your brand:

As you study your customers, look for things that aren’t working for them. The better you understand the pain points within and around your industry, the better you can enhance your brand’s relevance. Run-flat tires reduce the inconvenience (and danger) people feel when they run over a nail. Satellite radio eliminates the annoyance of static on lonely interstate highways. The Egg McMuffin lessens the hassle of eating in the car. Even minor enhancements can have a major impact on customer satisfaction, from a curved shower rod (who would have thought you could keep that clingy curtain at bay) to a Web form that remembers personal data (key in my address? again?) to a simple apple slicer (great for you and me, even if it’s not so good for Band-Aid).

Once you have a solid list of pain points, brainstorm about how you might relieve them. This is where understanding the changing lifestyles of your target is vital, as it gives you a sense of what they’ll be wanting/needing/expecting down the road. Some new ideas may require a costly and significant overhaul of the way you do business, while others will only require a simple process change, ordering option, or service enhancement. Over time you’ll probably implement a variety of ideas encompassing all of the above.

Need a head start? Try imagining solutions from the perspective of well-known, well-respected brands. For each pain point, ask: "How would Nordstrom (JWN) overcome this problem if they were in our business?" "How would Southwest Airlines (LUV) approach this challenge?" "What would the Marines Corps do about this issue?" Nike (NKE), Ritz-Carlton, Harley-Davidson (HOG), the Mayo Clinic—you can drop any number of companies into this equation that will cause you to consider different ways of relieving the pain. Many of your ideas won’t be practical (and some may not even be possible), but the exercise will open your mind to creative solutions.

Regardless of how you go about innovating, make sure you’re continually pursuing the next thing, because a company’s commitment to staying relevant must never cease. As you consistently address your customers’ evolving expectations and overcome the things that frustrate them, improvements that by themselves may only be measured in inches will move your company miles from where it is today. That’s where your customers will be. As long as you’re there to meet them, they’re likely to stick around.

Interesting numbers from the Tax Foundation, which is in the business of analyzing interesting (tax) numbers. Its annual review of what states did with their tax policies included some strong praise for Indiana. A few excerpts from the release and a link to the full study, which takes some to task for targeted tax hikes and accounting gimmicks (instead of reducing spending).

Nine states increased individual income tax rates (five states reduced their rates), six states raised general sales tax rates, 17 states increased excise taxes on cigarettes and five states increased rates of alcohol excise taxes.
 
“Two states – Arkansas and Indiana – managed to roll back spending growth commitments and take actions to limit spending, but other states have either kicked the budget can down the road or increased taxes,” said Tax Foundation Director of State Projects Joseph Henchman, who authored Tax Foundation Fiscal Fact No. 204, “A Review of Significant State Tax Changes During 2009.”  

“With state revenues declining due to the tough economic situation, most state leaders in 2009 have tapped high-income earners, smokers, out-of-state business transactions, or other targeted groups, those being the only people that politicians feel safe raising taxes on,” Henchman notes. 

California, Connecticut, Delaware, Hawaii, New Jersey, New York, North Carolina, Oregon and Wisconsin increased individual income tax rates. States that increased sales taxes include California, Massachusetts, Minnesota, Nevada, North Carolina and the District of Columbia.
 
Other miscellaneous tax changes in 2009 include obesity and soda taxes, excise taxes on plastic bags (often mischaracterized as “fees”) and “Amazon” taxes, which force out-of-state retailers to collect sales taxes from customers if the companies have affiliate and advertising relationships with in-state businesses.

The blog of Directions marketing agency (Neenah, Wisconsin) has an interesting tale about a company that turned a customer’s negative blog reaction to its product into a ringing endorsement through engagement and sincere customer service. (My holiday favor to you: The company makes toilet seats and I won’t even attempt one pun on the matter.) Read about the exchange here and take heed of the lessons learned:

1) To paraphrase David, this is how social media is supposed to work and this is how a business that really cares about its customers and product reputation is supposed to interact with today’s consumers.

2) Reaction to negative postings should be swift, honest, transparent and never defensive. Your demeanor and words should convey that you simply want to get to the bottom of the situation and that in the interim you want to make the customer whole.

3) Even a few years ago, an unhappy customer such as David might have picked up the phone and called the toll-free customer service hotline. Or he might have just complained loudly to friends and acquaintances. In today’s world, the Internet is where complaints go to be aired, amplified and live on forever. You can’t react if you aren’t actively listening in the first place.

4) Viral can be a positive or negative force. Commenting on the outcome, a Realtor in Utah posted the following: “This is a company that knows exactly what the new age media is all about. Hats off to Bemis for knowing a bad situation can be handled in such a way as to make a loyal customer for life.”

When the Indiana Chamber Foundation released its Workforce Wise report last week, it invited Mac Parker and Martha Lamkin to the event to add some perspective. Neither disappointed. Their personal stories are symbolic of the entire study — taking advantage (both on the job and in the community) of the experiences and passions of the Baby Boomer generation.

A few of their insights and comments:

• Parker, an attorney with Baker & Daniels for more than 50 years, brought with him nearly 20-year-old magazine clippings broaching this same subject — the consequences of an aging workforce. While the tendency then was to "push this back" and "talk about that tomorrow," Parker emphasized that "tomorrow is here now."
• He noted the dramatic difference in 75 million Baby Boomers and 25 million members of Generation X.
• Finally, Parker said he was glad to see attention to the subject of what communities can do for potential retirees, describing that group as "very desirable new residents."

Lamkin has enjoyed a long and successful career in education-related issues, philanthropy and community involvement. She sees tremendous value in not forgetting about older Hoosiers both in the workplace and in society.

"Employers need to value this mature, reliable element of the workforce. We want to keep those persons engaged in the workplace and in a mentoring role," she says. "I also encourage every person to be engaged in community life. For older adults, it’s personal fulfillment, an opportunity to own our community responsibilities."

Helping educate young people is one of those areas of responsibility. While sons and daughters may have already passed through the education system, older Hoosiers can still, Lamkin explains, "run for the school board, mentor students, be part of booster organizations," and in the big picture, simply be a "positive influence in students’ lives."

The Workforce Wise web site has the latest report, as well as other informative studies. Lamkin and Mark Lawrance, the Chamber VP who oversaw the study over the past year, will appear on Inside INdiana Business with Gerry Dick to discuss the latest. See when the show airs in your area (during Christmas week).

What should be done with online retailers and sales tax? The story is the same in most states – they’re not required to pay and most consumers don’t volunteer for the "use tax" in place in many areas. With state fiscal challenges and online sales both growing, don’t expect this issue to go away soon. The Pittsburgh Post-Gazette writes:

If you buy Christmas gifts online this year, you may be saving money on your end, but you might also be costing the state treasury its fair share of sales tax revenue.

State revenue departments across the country have complained for years that big online retailers aren’t remitting their share of sales taxes. At stake are the hundreds of millions of dollars that Pennsylvania and other states are losing when a shopper buys a CD, book or television online, instead of in a bricks-and-mortar store.

In Pennsylvania, the Department of Revenue estimates that the state is missing out on nearly $300 million in sales tax every year.

"Pennsylvania is not the only state in this boat," said Stephanie Weyant, spokeswoman for the revenue department.

Every year since Internet shopping began being measured, the amount spent online has increased annually. On Cyber Monday alone — the Monday after Thanksgiving — about $900 million was spent online this year, either at stores that operate exclusively in the cybersphere, such as Amazon.com, or at the online divisions of actual stores, such as Best Buy.

Online retailers that do not maintain a physical presence in Pennsylvania are not required to remit a sales tax (though some do so voluntarily), thanks to a 1992 court decision that predates the era of Internet shopping. In Quill Corp. v. North Dakota, the Supreme Court ruled that a retailer or purveyor of goods couldn’t be forced to remit sales taxes to another state unless it had some kind of "nexus" there, a physical presence such as a store or warehouse.

For years, Congress has been debating federal legislation requiring all retailers to figure out how to remit the sales tax to the appropriate state, but so far, the law has gained little traction and has been opposed by Amazon.com, considered to be the biggest cyber-fish out there.

While Congress has been inactive on the issue, New York has been proactive, passing a law that requires Amazon.com and other Internet retailers to collect sales taxes on transactions with New York customers. Amazon challenged the law, lost in January, and now a New York appeals court is expected to issue its own ruling soon, according to a report in The New York Times. If the law stands, other state legislatures would be tempted to follow the same legislative path, especially given the depleted condition of many state treasuries.

A new initiative from the Indiana Chamber Foundation that was released today has a cool name (Workforce Wise) and an intriguing logo (check it out on the report or web site). Even better — and on a much more substantive level — it includes very pertinent information to help address a growing workforce challenge.

That challenge is not new — the aging workforce. But this compilation of prior research, newly commissioned studies and additional input is comprehensive and looks at ways to turn the challenges into opportunities. You can read the official language in the press release and report. Here’s my view on key takeaways:

• Employers, don’t lose your greatest asset (people who know how your organization works) because you weren’t prepared. Be flexibile, figure out ways to make it work for you and these key employees and you won’t be sorry
• Employees, your job is to learn new skills and also adjust to changing circumstances (most of you are willing, and employers and educators are there to help)
• Communities have a big stake here. People who continue to contrbute on the job and in society in general are far preferred to those who are shut out and primarily become users of public resources

A number of people put in a lot of good work to make this report possible. It’s one of those projects that can — and will — have a lasting impact. Invest a little time in the 32 pages, including informative charts. It will be worth the effort.