Is Cash Still the King of Incentive Awards?

As has always been the case, cash is the reason we come to work.  We have to support ourselves and our families.  It is the way we exist in modern times. Without cash, the lives that we live would not be the same.  We would have to revert to feudal times where the noble class had all the money and the majority of workers had little but a place to live and food to eat. 

Reflecting on our experiences in the non-cash incentive awards industry for over forty years, it seems that the prevalent current view on what award works best is based on what employee survey you are reading today….

”Majority of employees and job seekers say money is more important than intangible rewards” or “workers care just as much—and sometimes more—about intangible recognition for a job well-done as they do about earning higher pay or receiving bonuses.”

One of the initial problems when planning any kind of employee improvement process is what award (if any) to use to motivate the performance? As cash has always been the medium we all work for, it is the first award considered.  All too often the process never goes much further and cash is chosen. With all the research and studies done over the years on the subject, there is no real empirical evidence to support using one or the other.  If the objectives are important and can result in higher profits, the awards are higher and are usually cash.  If the goals are more subjective, with less clarity on how they are measured, the awards per person are lessened and usually more non cash.

Frankly it always gets down to budget. And how much you can get from the C-suite will depend on how much value the executives place on achieving the objectives and consequently how much they are willing to spend to get it done.  Frankly this is the absolute number one problem with employee incentives and recognition programs today.  They are always (well nearly always) underfunded to get the job done, and consequently many don’t produce results.  Even worse, the program planners rarely do a complete analysis before, during and after the program to determine if successful, why, and if not, why not. 

So, during this planning conundrum, you can always find some current study or research to support using the award and budget you want.  It may work, it may not.  We wish we had the magic wand to wave over the problem and give you the perfect program but that doesn’t exist.  All we can recommend is that you get all the data you can on your own situation analyze it before, during (as often as possible) the program and at the end to know what happened.  Then, as necessary, revise, relaunch, and keep going with new and better data.  You can get it right.

If you want to throw some confusion into the mix, consider that money is the contract that gets us to go to work.  It doesn’t necessarily motivate us to work well, or the attitude we have while we are at work.  Factor that thought into your planning.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Incentive Research Federation Study on Incentives in the Tech Industry

A recent study conducted by the Incentive Research Foundation found that the top performing technology firms are twice as likely to use employee reward and recognition programs as a competitive advantage over competition.  Top performing firms were classified as those that demonstrated more than a 5 percent increase in revenue or stock price in 2018. Of the 118 technology companies reviewed, only 49 organizations made the cut. 

Other findings of how these companies use reward and recognition compared to average performers include: 

·       22 percent are more likely to structure their programs with the goal of reaching each participant versus only recognizing the top performing participants.

·       25 percent are more likely to look to outside partners for expertise on the best ways to recognize and incentivize their program participants.

·       They spend an average of $6,833 per person for their sales incentive trips, while average firms shell out an average of $6,000 per participant.

·       21 percent are more likely than those at average performing firms to use financial metrics as program qualifiers.

·       They spend about 6.7 percent of participant income in annual spend for rewards and recognition.

·       They award a value of $4,292 on average to their top performers and $2,685 to their average performers in award points, merchandise and gift cards.

·       20 percent are more likely to offer a top performer sales award, with 23 percent of them having that award include a group trip.

·       13 percent award a variable versus fixed number of winners.

·       14 percent have their awardees earn automatically on predefined goals versus committee selection intervention.

·       9 percent are more likely to include achieving 100 percent of the predefined goal to qualify for a trip versus requiring their sales people to exceed their goal. 

·       19 percent are more likely to provide simple rules for their program. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net