Rewarding High Performers: Types of Incentive Rewards
The old adage “cash is king” is true in many instances. It gives the recipient total flexibility to buy whatever they want. The downside is that sometimes people use their cash awards for less meaningful items—like gas or groceries—that don’t have lasting value. In that case, the reward is simply looked at as found money to help out with ever-increasing expenses. That’s why, for many employee incentive programs, companies are less likely to see a true change in behavior. According to an Incentive Federation Inc. study, respondents from industry lists such as Incentive Magazine were asked what types of non-cash sales awards were used in their various programs.
Reward types were defined in two categories: incentive travel and merchandise/card. The categories were specifically defined for respondents as:
- Incentive trips—Travel experiences to motivate and/or recognize participants for superior performance in support of organizational goals. With these programs, incentive travel is the key award. Participants may win a spot on a group travel program, or they may be able to select from among various travel packages—either group or individual. Related expenses including room and other gifts are included.
- Points-based or merchandise awards—These are merchandise or other awards used as part of an incentive or recognition program. Rewards may be a variety of products of different values, gift certificates/gift cards, experiences, or individual travel. These programs may allow participants to redeem points for awards of their choice, or earn different awards based on the level of achievement. How much award choice, or how little choice, participants get is usually up to the employer or sponsor. Not surprisingly, the use of incentive travel and merchandise/gift card differs across program types. Whether an actual sales team or a staff of customer care agents and managers, it’s a company of employees with real goals that they must reach.
Online incentive programs with parameters, milestones, and award choices can be set to the desire of the employer using the service.
It encourages employees to exceed their goals by:
- Creating a profit sharing culture where each employee receives real-world dividends— from cash to cruises, valuable gifts and more.
- Creating a culture of competition—employees see on leaderboards and reports who is selling more and how close they are to their own goals.
- Targeting certain services, products, and even customers as sales targets and goals—staff turn prospects into customers and take the credit.
- Reporting transparency – clear reporting on who has met goals, completed trainings, and what they have earned lets everyone know where they stand.
- Sharing of data – by individual, team, region, division or the entire company on a permissions basis controlled by the employer.
Choosing rewards that inherently have a higher value inspires higher performance. Keep in mind that indulgences, especially those that don’t have to be justified, are more valuable.