University of Michigan Hospitals and Health Centers, Ann Arbor, had held a summer picnic as far back as people could remember. “When we began questioning managers about their recognition practices, they all pointed to that day as if to say, ‘Well, we did the picnic,’” says Denise White, chairwoman, employee recognition programs.

White was hired by UMHHC about five years ago to question assumptions, so her next task was to ask the employees what they thought of the picnic. “The data was fairly compelling,” she jokes. “They hated it. They said they didn't feel appreciated by a once-a-year blowout picnic.” The event also did nothing to reinforce the company's mission and message with employees.

What UMHHC considered to be one of its major internal branding events was actually a flop.

So, not long after her arrival, White embarked on a comprehensive internal branding and employee recognition program, working with the public relations, marketing, and communications departments — and the full support of top executives. Where before UMHHC's strategy put patients and families first, now employees are considered important customers as well. There is a newsletter applauding employee efforts, a Web site, a TV station, and numerous recognition programs and ceremonies. Included in the vision statement is not only that UMHHC be “the first place people want to come when they need healthcare,” but also “the place where people prefer to work.” Not only are employees included in the organization's missions and goals, but with each new wave of surveys, it's clear that customer service is up, and workers feel more motivated.

You'd think that, like UMHHC, more organizations would realize that aligning external and internal marketing communications increases employee loyalty and brand knowledge — and that this filters out to how people treat customers. Yet, according to research conducted by Strategic Management Resources (Marlborough, U.K.), 75 percent of marketing teams fail to consider the importance of the internal “market” of employees. As a result, 40 percent of marketing efforts are lost when customers come face to face with unmotivated employees who lack knowledge about the company's culture and goals.

A New Movement

Enter People Performance Management, a fairly new discipline whose goal is to find ways to connect employee performance to the brand messages that companies send to customers. In sum, PPM integrates traditional internal marketing disciplines (organizational design, communications, incentive programs, training, etc.) with traditional external marketing disciplines (advertising, promotion, customer service, etc.). The nationally recognized Forum for People Performance Management and Measurement at Northwestern University, which acts as a clearinghouse for PPM research and practices, awarded its 2005 Performance Through People Award to White and UMHHC during a ceremony at the Motivation Show in Chicago in September.

Last year's award winner was Dallas-based Southwest Airlines, which has had books written about its employee-centric culture and customer service excellence. “We have always had a philosophy that we will treat our employees the same way we expect them to treat our external customers,” states Cheryl Hughey, director of leadership training, people and leadership development department. “That is, we will treat them with caring, respect, and concern.”

Internal marketing at Southwest begins from day one, at orientation, where new employees learn about the airline, its mission, and the Southwest brand. Southwest even has its own Culture Committee, consisting of employees from across the system. The committee, Hughey says, visits locations regularly and schedules “things like barbecues in the work areas to emphasize to employees how much the company appreciates their hard work.”

Hughey considers customer service and turnover to be the best indicators of the success of its internal branding efforts. The airline has an extremely low turnover rate compared to the rest of industry. “Those who do stay with us are the ones who give their best to our customers,” she says. And Southwest's executive offices receive numerous positive customer-service comments, which are shared with all employees. On a recent flight, Hughey chatted with a customer who said he flies Southwest primarily because of the flight attendants. “He told me that they always seem to have so much fun and enjoy their jobs so much.” And that's exactly the end result Southwest wants to achieve.

Incentives: An Essential Part of the Mix

There's nothing like a little reward to help keep employees engaged in internal marketing efforts and to recognize them for a specific behavior that supports the company's goals. At University of Michigan Hospitals and Health Centers, Ann Arbor, the You're Super program rewards employees for exemplary customer service behaviors, such as escorting visitors to their locations if they are lost, rather than just providing directions. Customers who receive this kind of service can fill out a You're Super card. Management collects the cards and notifies employees when they have been selected. They are also invited to a quarterly ceremony.

Dallas-based Southwest Airlines' Culture Committee arranges on-the-spot treats such as pedicures, manicures, and massages as employee rewards. The airline also has agent of the quarter and employee of the year programs, and posts photos of outstanding employees. Supervisors can also schedule parties to celebrate excellent performance.

Paul Kiewiet of Promotion Concepts, Kalamazoo, Mich., believes that employee incentives used in conjunction with internal marketing programs are an ideal way to provide immediate feedback and recognition, “particularly incentives that are personal and recognize their individuality.” This requires getting to know employees personally. For example, tickets for a weekend at an amusement park might make sense for an employee who is family-oriented, while someone who likes racing may appreciate a NASCAR gift.