For Me?

If you want to really motivate employees for exceptional job performance, remember that not everyone is looking for money. Consider giving them an experience they won’t forget, even if it’s just for the day.

Experts and research suggest that for most workers these days, the meaning of a rewards program can be lost or diluted if it doesn’t have any uniquely distinguishing characteristics.

And the result of not implementing distinctive rewards for a job well done can be an ultimate indifference to the awards offered and the company objectives underlying it.

When incentive management company Excitations opened its doors two years ago, it introduced various experiential options, enhancing the incentive concept. These include a luxurious day at a spa, a behind-the-scenes tour of the Baltimore Aquarium or, for the more adventurous, skydiving or white-water rafting.

“Companies like to give people options so the reward feels very individualized,” says Nancy Lamberton, vice president and founding partner of Excitations. “They’re also looking for things that create a memory. It creates a longer-term type of buzz.”

The buzz builds when employees return from the experiences and tell their fellow workers about it. It instills an added level of motivation among the employees who imagine it, as well as the one who won the reward and wants to repeat it—or try something else, according to Lamberton.

“People get excited about it. It’s something they want to win,” she says.

GTSI, an IT solutions company, turned to Excitations for help in implementing its “Unsung Heroes” program to recognize support staff who help the company’s salespeople achieve their goals.

GTSI had tried pre-paid credit cards before testing experience rewards, which produced more palpable impact than the gift cards. It recently turned over all its rewards business to Excitations.

“The feedback we’re getting from the companies we’re working with is that it’s very effective,” Lamberton says.

While employees appreciate the range of award options, companies can select options as diverse as the events themselves to fit their budgets.

The impact of such reward programs is supported by recent research from the Center for Concept Development. In a 2005 study conducted among companies using merchandise and travel items for incentive applications, four of five respondents said travel and merchandise awards do, indeed, leave much more lasting impressions than cash awards.

And three-fourths of companies felt they could create more exciting, memorable programs around travel or merchandise awards.

Cash awards don’t have the impact of changing behavior in the way that non-cash awards do, says Michelle Smith, president of the Incentive Marketing Association and vice president of business development for O.C. Tanner.

“People don’t remember. Most cash rewards just go into a checking account to pay bills,” Smith says. “It has no trophy value.”

Over the past several years, more exotic experiential awards, such as hot-air balloon rides, have become increasingly popular, according to Smith, who says that type of reward conveys the kind of lasting impact that resonates for the employees receiving it, particularly veteran employees. “For people who’ve been around for awhile, it’s very popular to give a unique experience. You don’t need seven TVs,” Smith says.

The most effective award, she says, is the one that leaves an indelible impression to effectively reinforce the effort required to win it: “You want to get a sustainable and lasting memory for that award because you’re also getting a lasting memory of the behavior that won that award.”

The days of simplistic awards programs touting wall plaques as prizes are passé, Smith says. Increased workforce diversity, by age and culture with more telecommuters working internationally for U.S. companies has changed the incentive picture.

Programs are more sophisticated and companies are engaging incentive specialists “because we understand what the levers are that need to be pulled,” she says.

And also what levers shouldn’t be pulled. In Asian cultures, she notes, presenting someone with a set of steak knives could be misinterpreted, because knives are symbolic of severing relationships.

And the business of incentive awards has grown exponentially, with incentives now representing a $127 billion annual business and sales contests hitting $9 billion in yearly expenditures, according to the study “Making the Case for Sales Incentives” by the Forum for People Performance Management and Measurement.

Bruce Bolger, a founder of the Forum, notes many companies implement incentive programs as a matter of faith, so there’s a lack of effort in measuring their efficacy.

But Bolger, also an executive at Selling Communications, says that’s changing. “This whole notion of marketing to employees is taking on momentum. Companies really are looking at this for the first time. The need to differentiate is becoming a more crucial factor.”

Measuring individual employee performance against the company’s global objectives is one key element. “You could put a dollar value on performance for almost any job if you want to go that far,” Bolger adds.

The quality of interaction between employees is another key consideration, he says, along with recruiting and retaining employees and ensuring that employees are properly trained so they know what they’re supposed to do and how to execute their assignments.

The bottom line, Bolger says, is the recognition of the preeminence of the individual in implementing corporate strategies: “Many expectations are actually fulfilled by our employees, not by machines or processes.”

The Forum’s study supporting the incentive concept focused on a Midwestern financial services company with operations in 13 states and 1,300 sales agents. In a multi-level sales contest in 2003, top performers at the company won large travel vouchers, and employees who exceeded preset hurdles won smaller awards.

Sales of the product nearly doubled during the course of the incentive program, with a net 10% gain on investment. The incremental sales margin was $180,000, compared to the incentive program’s cost of $164,000. And while pre-incentive sales declined, suggesting a “sandbagging” effect in anticipation of the incentives, post-contest sales remained at a higher level than baseline sales.

The study also indicated that three-fourths of incentive program planners are more focused on their return on investment as a measure of success. But despite this trend, only 55% of the total sample in the study actually employed ROI as a means of gauging the efficacy of the incentive programs they implemented.