TOP 9 RECOGNITION
BEST PRACTICES –
AND HOW TO
IMPLEMENT THEM
Introduction
We are what we repeatedly do.
Excellence, then, is not an act, but a habit.
Aristotle
It sounds like a simple concept: engaged employees perform
more brilliantly and produce greater results than employees
who are not engaged. Take the logic one step further and you
could say that the end result of having engaged employees
is greater business success. Despite this common sense value
proposition, many organizations have not yet invested in a
recognition strategy to engage employees and inspire them
to excel.
In this paper, we’ll look at how recognition plays an integral
role in building employee engagement and making excellence
a habit. We’ll share statistics and real-world examples that
demonstrate how recognition – when it’s done right – boosts
business performance and aids organizations in recruiting,
retaining and inspiring the kind of talented people that drive
business growth and results.
We will focus on nine key best practices that you can put to use
in your own organization to engage employees and achieve
business success. You can R&D these proven recognition
strategies in your own company – by R&D, we don’t mean
research and development, but “rip off and duplicate.” Why
reinvent the wheel when you can leverage the successful
practices of organizations that have already built a culture of
recognition based on engagement and results?
We’ll also look at what not to do when designing and
implementing a recognition strategy and point out common
pitfalls to avoid.
So, are you ready to become a recognition guru?
Let’s get started.
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What is Recognition and Why
Does Your Business Need it?
Receiving recognition for
achievements is one of the most
fundamental human needs. Rather
than making employees complacent,
recognition reinforces their
accomplishments, helping ensure
there will be more of them.
“Stop Demotivating Your Employees!”
Harvard Management Update,
Vol. 11
Recognition is an important – and often overlooked – component of
the total compensation and rewards package. Employee recognition has
proven to be instrumental in contributing to a positive workplace and
organizational success.
In Maslow’s hierarchy of needs, the intrinsic desire for recognition ranks
much higher than the need for salary or rewards. We all crave recognition
for our efforts and a little praise can go a long way toward engaging
employees. Top employers know that a sound recognition strategy can have
a dramatic impact on the success of employees, managers and the company
as a whole.
What recognition does for employees:
What recognition does for companies:
73% of managers report getting expected results
when they recognized others
The Fortune’s Best Places to Work list had a 233%
higher financial return than companies not on the list
(Souce: Russel Investment Group)
78% report it helps increase productivity
Companies with Higher Employee Satisfaction
Scores have a 700% higher shareholder return
(Incentive study)
80% say it makes getting work done easier
Incentive study found a direct correlation between
Recognition & Profitability
84% claim it helps increase performance
90% say it helps motivate people better
(Source: Dr. Bob Nelson doctoral research)
A comprehensive recognition strategy that focuses on the right things
will yield results. There are countless studies on the causal links between
employee engagement and financial performance and results.
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Impact of Employee Engagement on Financial Performance
19.2%
27.8%
13.7%
-3.8%
-11.2%
-32.7%
12 Month Change In
Operating Income
12 Month Net Income
Growth Rate
12 Month EP Groth Rate
Highly Employee Engagement
Low Employee Engagement
Source: Towers Perrin Sept. 2009
In the Towers Perrin 2009 study, for example, it is clear that companies
that scored high in employee engagement had greater financial success.
Engagement was linked to key business metrics including operating income,
net income growth rate and EPS growth rate. These are the kinds
of numbers your executive team needs to see in order to buy-in to the
concept of recognition.
It’s all well and good that you acknowledge that recognition is important,
but like most things in business, sound execution is everything. You need
the right tools and approach to see results from your employee recognition
efforts. A loose collection of ad hoc recognition programs will not work, nor
will antiquated approaches such as service awards, plaques and certificates
at quarter end or speeches at the annual holiday party. An effective
recognition strategy engages employers on a daily basis throughout the
year, creating sustained and consistent results over time.
In the next section, we’ll quickly look at where you should start to build a
successful recognition strategy within your organization – one that is based
on the latest thinking and research on employee engagement, as well as
best practices from top employers who have turned ideas into action.
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Where Do You Start?
In the past, companies rewarded the
use of their employees’ hands. In
today’s knowledge-based economy,
employers also need to win their
employees’ heads and hearts.
While we all crave recognition, providing that recognition doesn’t always
come naturally – even for the most well-intentioned managers. Recognition
best practices are seldom a core competency for business leaders or HR
departments. As a result, many organizations don’t know where to begin
when planning a recognition strategy. Below you will find some tips for
getting started.
1
Clear Your Mind – Forget everything you thought you knew about
employee recognition. When it comes to recognition, many
companies seem stuck in the 1900s when service awards – the
proverbial gold watch – were given to employees to recognize their
years of loyal service to the company. This industrial-age mindset
recognizes presence, not performance – that is, recognition is given
based on the employee showing up for work, not for how well the
employee performs when he or she is at work. While service awards
have their place, too much emphasis has been placed on this method
of recognizing employees. Modern recognition strategies are more
results-oriented.
2
Ask Your Employees – Do you have a good idea how your
employees feel about your current HR practices including rewards
and recognition? An employee survey is a great first step in
ascertaining where your organization is in relation to its employee
engagement and recognition goals. The survey results will also give
you ammunition when it comes to selling your recognition strategy
to senior management and obtaining buy-in and budget. Start by
asking some of these basic questions: Do you feel that your efforts
on behalf of the company are recognized by your manager? How
would you rate your level of engagement today? How would you like
to be rewarded for doing good work? The results will also provide a
baseline for measuring future success.
3
Obtain Executive Buy-in (and Budget) – When it comes to obtaining
executive buy-in and budget for a new recognition program, you
need to make a strong business case for the investment and speak to
your executives in their own terms. If you don’t, your CFO or CEO will
send you back to the drawing board to explain how your requested
budget for rewards and recognition will deliver a return on investment.
There is ample research and statistics available that connect employee
engagement with positive financial results. Use hard data to show the
business validity of investing in a recognition strategy. For example,
the graph below from the Russell Investment Group study shows that
the Fortune 100 “Best Companies to Work For” have consistently
outperformed the S&P 500 for the past 11 years.
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Fortune “100 Best Companies to Work For”
Versus S&P 500 1998 - 2009
10.30%
6.44%
2.95%
“100 Best”
Reset Annually
“100 Best”
Buy and Hold
S&P 500
Executives hate losing, especially to their competition. When seeking
buy-in, look at your competitors’ recognition and rewards programs.
This competitive intelligence and analysis can be an advantage
in convincing executives that a recognition program is needed.
Organizing a pilot program within a single department and measuring
the results can often make believers of the most resistant CEOs
and CFOs.
Top 9 Recognition Best Practices –
And How to Implement Them
Let’s assume that you’ve done your homework to make a rock-solid business
case and obtain executive buy-in for a recognition program. Before you
start planning your vacation, there are still some key decisions to make and
some heavy lifting to do in order to build the foundation of your recognition
strategy. Below we’ll look at what works and what doesn’t – not only WHAT
elements are important, but HOW to make your recognition program a
success in the real world.when planning a recognition strategy. Below you
will find some tips for getting started.
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1
Define Employee Behaviors You Want to Encourage
What specific behaviors do we want to see more of in your workforce?
When defining desired behaviors, think about results-based
recognition: how do employee behaviors relate to company success
and your high-level company goals? Remember that an effective
strategy recognizes and encourages employee performance, not
simply presence. Below are a few examples of specific actions and
behaviors that our clients determined they wanted to see more of:
UÊ Living Company Values – Your corporate values – you have
values, right? – can provide a great base for a recognition
program: Encourage employees to start living the company
values – and recognize them accordingly when they do. Values
are a key part of a unique corporate culture. A large majority
of our clients use values as a base to build their rewards and
recognition program.
UÊ Cost Saving – Motivate everyone in your organization to look
twice and how company money is spent. Recognize employees
who spend wisely, treat company funds as their own and find
innovate ways to save money.
UÊ Innovation – Encourage employees to contribute innovative
ideas and recognize managers who champion those good ideas,
so that they can be put into action. Examples of innovation
may include recommendations for process or productivity
improvements, ways to better serve customers or ideas for new
products or services.
UÊ Employee Referrals – Referrals are the least expensive way
to recruit talent – and generally deliver a higher caliber of
candidate. Recognize employees who refer top talent to your
organization and encourage your workforce to get involved in
your recruiting efforts by posting open positions to their social
networks. Make your employees ambassadors for your great
company and its culture.
To motivate cost savings, several of
Comm-works have implemented a
simple automated solution to allow
employees to submit savings claims,
obtain approval from finance and
qualify to receive a percentage of
the savings back as a reward. One
client saved over $1M in one year by
implementing an online cost savings
program as part of their rewards and
recognition program.
UÊ Hitting Goals – We all want companies, departments
and individuals to achieve set goals. For instance, a sales
department may want to recognize their sales reps for meeting
or exceeding goals set for up-selling, cross-selling or building
the sales funnel. In this case, consider providing recognition
not only for closing the deal, but for all the efforts along
the way that go into closing that deal in order to encourage
consistent results quarter after quarter and build a strong sales
organization.
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UÊ Wellness – Support your employees in their efforts to better
their personal lives and contribute to their community. Top
employers care about their employees’ health and well-being,
as well as about the community in which they are situated. They
do this because it’s the right thing, but also because happy,
healthy employees tend to be more positive and productive at
work.
UÊ Safety – Ensure a safe work environment and encourage
employees to report unsafe conditions and/or recommend
improvements to make the workplace safer. Promoting safety
brings many operational benefits.
Note that these positive activities and behaviors aren’t always HR
driven. Business leaders and department heads can identify specific
actions they want to encourage within their own department, business
unit or across the entire company.
2
Determine Your Budget
How much should your organization plan to spend on rewards
and recognition? Recognition Professionals International (RPI)
recommends starting with 1-3% of your total employee compensation
– a relatively small investment given the potential for real business
returns. Even better is the fact that recognition – saying thank-you for
a job well done – is free. Not all positive employee behaviors warrant
a reward, but they do deserve to be recognized.
3
Peer Recognition Rules!
Perhaps the biggest trend in recognition programs is a peer
component that allows employees to recognize one another. Peer
recognition breaks down the notion of top-down recognition from
managers and fosters a sense of camaraderie, teamwork and working
together toward common goals.
When setting up your program, think long and hard about who can be
a recognizer or a recipient of recognition – all employees, supervisors,
managers, senior executives, and so on.
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In launching our own internal program at I Love rewards, we
structured and budgeted for our rewards as follows (using points
for rewards):
4
Program Type
What is it?
Who can give
Recognition?
Who can
receive It?
What is it
worth?
Free
Recognition
Free recognition based on
our values and ‘thank yous’
for going above and
beyond
All employees
All employees
Priceless
Living
Our Values
Everyday
Recognition of an employee
by their peer for Living a
Value of I Love Rewards.
All employees
All employees
X by All Employees
Reward Cards
"On the spot"
recognition by People
Leaders for great work.
All employees
Cost Saving
Points awarded to
those who have saved
money and approved by
Finance – 10% of cost
savings in points
All employees
All employees
Variable based on
value creation
Spotlight
Award
Monthly recognition, voted
on by the senior leadership
team, for the most
outstanding employee.
Senior
Leadership
All employees
X Points
Social
Recruiting
Rewarded for becoming
a social recruiter and
for bringing in employee
referrals.
N/A
All employees
Sign-up – X Points
New Hire
Awarded to a new I Love
Rewards employee
N/A
All employees
X Points
Department
Top 1
Recognition of each
member of a department
when the department
achieves its Top 1 Result!
N/A
All employees
X Points
5X by Senior Team
All employees
X from Leadership Team
10X from Senior Team
Referral – Y Points
Follow the SMT Approach to Recognition –
Specific, Meaningful, Timely
No matter what behaviors you choose to recognize, you should
ensure that recognition follows the SMT approach:
UÊ Specific – Recognize others for very specific reasons and do so
with personalized notes and messages. Recognition is a form
of feedback, and the more specific it is, the more likely that the
specific positive behavior will be repeated.
UÊ Meaningful – Ensure that recognition resonates with the
individual and is meaningful in the way it is presented –
especially if it is tied to a reward. We strongly suggest letting
the individual choose a reward that is meaningful to them, rather
than deciding what reward to provide. No one thing will work to
motivate all employees, so offering a broad choice of rewards is
a critical success factor.
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UÊ Timely – Ensure that you recognize employees as soon as
possible after they meet a goal or behave in a positive manner.
Immediacy of recognition reinforces the connection between
praise and the positive behaviors and activities you want to see
repeated. Many companies make the mistake of waiting till the
end of a month, quarter or even year to recognize someone. By
that time, the employee may well have forgotten all about the
specific behavior you are recognizing – and certainly they will
not have been encouraged to repeat that behavior.
Many organizations reward
employees for providing personal
referrals – typically only after the
referral has been hired and has
finished their 3-month probationary
period. To make recognition
more timely and immediate, I
Love Rewards provided a smaller
point reward for employees if
their referral makes it through the
resume screening process to the first
interview, and a larger reward once
the candidate has been hired.
5
“Employees may be motivated by
many different things, but they all
strive for recognition and praise. And
they need that positive feedback at
least every seven days.”
Rodd Wagner and James K. Harter,
The Elements of Great Managing
(Gallup Press, December 2006).
Build a Recognition Rhythm
An effective program provides a mechanism for regular employee
recognition. It’s one thing to launch a recognition program and
another to sustain it so that it has a positive impact on engagement
month after month and year after year. If you want your program
to have longevity, recognition has to be built into your culture and
company rhythm. There are a few of simple tactics to make this
happens:
UÊ Don’t Recreate a Rhythm (if you don’t have to) – Use your
current business rhythm, such as scheduled weekly meetings,
regular town halls or social committee events, as an opportunity
to allow people to recognize one another. It’s as easy as adding
a line to the existing meeting agenda.
How does I Love Rewards do it?
At I Love rewards, each employee
is given a weekly budget of 500
points (equal to $5) to give to any
other employee for living one of the
company values. On a monthly basis,
each employee provides a handwritten Recognition Card worth 1,000
points to any other employee, which
can be redeemed on our online
system and rewards catalog using a
unique code printed on the card. We
also include public recognition as a
component of our daily leadership,
departmental and full company
meetings to help build the on-thespot component.
UÊ Managers Should Recognize Their Employees at Least Once a
Week –Building this into the rhythm allows it to happen. What’s
even better? If you have a system that can track and measure
recognition, you can monitor who is recognizing employees
and who isn’t.
UÊ CAUTION: Combine On-the-spot Recognition with Rhythmic
Recognition – You don’t have to wait for a regularly scheduled
meeting or event to recognize an employee’s positive behavior.
Recognition should be a 24/7 exercise and on-the-spot
recognition can be a powerful motivator. Encouraging a good
combination is key.
6
Measure, Review and Improve
Ensure that whatever your programs look like, that you can easily
record the activities to make decisions on how to improve the
program using data, not desire. We suggest the following:
UÊ Define the metrics you want to change based on your corporate
goals - and monitor them (see case study on the left)
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UÊ At the beginning of the program, define what data you need
to track towards your overall goals (so it can be captured at
front end)
ConAgra Foods set out to
dramatically increase their employee
engagement scores for their
recognition efforts. They asked
employees about what they thought
about the current programs, and a
year later asked the same questions
again. The result from the question,
‘I am satisfied with the current
recognition program’ went from
25% to 91% in one year – that’s a
264% improvement! Capturing these
metrics was imperative to provide
measurable data that has allowed the
company to invest more heavily in
these types of programs.
UÊ Set up weekly, and monthly reporting structures on what reports
should go where, and who they should go to
UÊ Place major milestones quarters away from launch to review,
discuss, and decide on improvements
Also, it is highly suggested to utilize the individual recognition data
in your review process. Ensure managers have access to reporting to
see what an employee has been recognized for over time. If you’ve
allowed everyone to recognize others in the organization, you will see
some great data here from their peers.
7
Rewards Must be Meaningful
There are many instances where recognition can be complemented
with tangible rewards. Recognition that is tied to a meaningful reward
reinforces positive work performance, allowing your organization to
drive positive results.
Rewards provide “trophy” value: every time the employee uses,
sees or interacts with the reward item, he or she associates it with
the company and the positive behavior that earned the reward. The
reward helps employees recognize that their employer truly values
employees and acknowledges positive work habits.
Here are some things to consider when choosing rewards items:
UÊ Employee Demographics – Will your selection of rewards appeal
to all employees based on age, gender and geographic region?
UÊ Fulfilling Rewards – Most organizations have moved away from
purchasing and warehousing their own rewards due to security
risks and tracking challenges.
UÊ Choice of Rewards – Will employees be able to choose their
rewards? It is a better experience if they can. The more choice,
the better.
UÊ Taxation – Ensure you are aware of the laws surrounding taxable
benefits and how they impact your employees.
UÊ Cash versus Non-Cash – Recent studies reveal that non-cash
motivators are more effective than cash in building long
term engagement.
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At I Love Rewards, customers have
the option to have employees share
recognitions to social networks with
custom company branding and
messaging to build a better company
profile and employer brand.
8
Make Recognition Public and Social
One-to-one recognition is powerful on its own, but it is even more
effective when it can be seen by others or shared via employees’
personal networks. Here are a couple of things to consider when
designing and launching your program:
UÊ Encourage Recognition Sharing – Whether it is shared
electronically or in company meetings, it will help build a culture
of recognition.
UÊ Make It Public – Remember that everyone that witnesses a
recognition moment internally may be inspired and encouraged.
Public recognition reinforces teamwork and encourages the
positive behaviors that you are trying to drive organizationwide. It is also a communication tool because it makes different
departments more aware of each other and how their business
functions contribute to corporate goals.
UÊ Make It Social – Younger employees are taking over the
workforce and social media tools like Facebook, Twitter
and LinkedIn are the way this new generation of worker
communicates. By allowing employees to share recognition with
their personal networks, you will not only make e recognition
more meaningful to them, but you will also be able to leverage
their social networks to promote your employer brand online or
support recruitment efforts.
9
Keep Your Program Alive
Launching a program with a big bang is great, however keeping the
program going and sustaining momentum takes care and ongoing
effort. Here are some tips for how to sustain your recognition
program:
UÊ Brand Your Recognition Program – Give your program a unique
look, feel and name that the company can be proud of. Choose
a name and look-and-feel that reflects your corporate brand
and culture.
UÊ Launch with a Bang – Launching a new program takes a lot of
effort, change management and communication, but a wellexecuted launch can create hype and get people excited about
the program:
UÊ Train your managers so they are part of the launch and
a source of information for employees – this helps get
manager and employee buy-in.
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UÊ Tease that the program is coming – get people talking
about it prior to launch.
UÊ Actually LAUNCH it – create a buzz that is fun including a
launch day so you can explain that you’ve been listening,
want to improve employee engagement and this is what
you’ve come up with.
UÊ Don’t waver – you may get resistance from employees and
managers, but stick with it. Identify a review process in six
months to gather feedback on program effectiveness and
employee support for the program. Make improvements as
required. No program is static – change is good to keep the
program fresh and engaging.
To keep recognition top of mind,
everyone at I Love Rewards gets
a quick e-mail reminder weekly
that asks ‘Have you recognized
anyone lately?’ Our program also
has a leaderboard showing the top
recognized employees as well as
the top recognizers.
UÊ Continuously Communicate; Don’t Let It Die – Build rhythm
around communicating the top employees recognized and
those who are recognizing others most often. Communicate
who has provided value – give them recognition in department
or team meetings. Chat with managers once a month to ensure
they’re using the program and to flag issues.
Our clients have created distinct brands for their
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Points Balance:
48,000
Recognition Budget:
1,000
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Messages (42)
Administration
Thank You
“Thanks
”
for making A difference.
Rob Bianchin, Inside Sales Representative
Achievers know that an A player is nothing without an A team.
Take the time to thank and recognize the awesome actions of those that contribute to our success!
Search Name or E-Mail
Start typing their name or e-mail and the results will appear below. You may select more than one person.
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What Not To Do – Common Pitfalls to Avoid
The working world has changed dramatically since the industrial age when
manufacturers – faced with high turnover rates for assembly line workers
– first started offering service awards to incent employees to stay on the
job. Unfortunately, despite the changes in the workforce, service awards
programs, which recognize presence instead of performance, have remained
virtually unchanged.
Razor Suleman, CEO, I Love Rewards
We’ve talked a lot about best practices in this paper, but what about the
worst practices, the things many employers get wrong when they set out to
launch a recognition strategy? Below, you’ll find three main “Don’ts” – the
most common pitfalls to avoid when designing your program.
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1
Don’t Only Recognize Presence – If we could make one single
recommendation, it would be to STOP over-emphasizing Years
of Service awards. Recognition programs do not begin and end
with years of service. Long-term service awards are also guilty of
recognizing presence, not performance. I Love Rewards has made
the conscious decision not to reward long service. We do, however,
recognize years of service and employee career milestones at our
company meetings and in our communications in a fun manner. We
have colleagues contribute speeches, poems, songs and interpretive
dances (not kidding, we’ve seen it all) to celebrate the employee’s
time with the company and his or her contributions, as well as acts
such as naming the company library after an employee.
2
Don’t Use a Lottery – Don’t reward or recognize the whole team
through a lottery. Companies commonly mis-apply the lottery
approach in two ways:
UÊ The whole team hits a goal and the names of one or two
team members are drawn from a hat to receive a lotterytype prize. These one or two lucky people may not have
been integral in hitting the goal, in which case randomly
rewarding them will only de-motivate the top performers
on the team who actually deserve the recognition. With a
lottery, you end up with a few winners and a lot of losers.
For employees to support a recognition program, they need
to believe that it is fair and equitable in the way rewards and
recognition are handed out.
UÊ Employees are given the ‘chance’ to win something based
on achieving a result. If the recognition or reward isn’t
certain, it won’t motivate people to act.
3
Don’t Lose Faith – Most recognition strategies take time to obtain
buy-in and absorb the change management involved. Like any
organizational change, you will encounter resistance. You will see
results right at the beginning and then over time the results and
momentum will taper off. You must keep the faith and stick with it until
recognition becomes deeply engrained within your corporate culture.
Ensure that you’re listening and recording feedback, which can be
used to guide future improvements to your program. Capturing and
acting on feedback will help make the next iteration of your program
a positive one. It’s also important to keep the program fresh by
continually introducing new elements, reward categories and reward
items, and communicating program changes regularly to hold the
interest of employees.
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Summing Up
If you are considering implementing a new employee rewards and
recognition program, the strategies and tips outlined in this paper will help
you ensure that your program is built on best practices to effectively engage
employees and contribute to your results-driven workplace. An effective
rewards and recognition program will make a positive impact on your
business. Good luck – and start recognizing!
Next Steps
Request a Demo
See a live demonstration of how an online employee recognition program
can drive positive behaviors, performance and results.
Speak with a Recognition Expert
Speak with a certified Rewards and Recognition Consultant about
best practices for launching and sustaining a successful rewards and
recognition program.
Contact Us
To get started, visit us at www.iloverewards.com or call 1-888-622-3343.
1 Broadway, 14th Floor
Cambridge, MA 02142 USA
Phone: 1-888-622-3343
www.iloverewards.com
I Love Rewards is an employee recognition solution that helps companies recognize brilliant
performance and empower employees to choose their own rewards. Unlike traditional service
award programs, I Love Rewards creates authentic moments of recognition that resonate with
workers of any age.
© 2011, I Love Rewards, Inc. All rights reserved. All product and company names and marks mentioned in this document
I LOVE REWARDS | 16
are the property of their respective owners.