Employee recognition and rewards have come a long way even in just the last ten years. In a new Voice of the Market survey by the Incentive Research Foundation, 45 program managers and end users of employee reward programs were interviewed about the increasing scope of employee rewards, and “what they prioritize when designing, implementing, and executing incentive programs”.
The study finds that the current definition of employee rewards covers considerable ground, and reveals key leveraging techniques many organizations use to maximize their return on investment. Here are some of our favorite findings from the report.
Through their interviews IRF identified four major recognition tools, and the most common applications for each:
- Gift Cards are used when ease of administration is a priority, or a large number of participants will be earning a reward.
- Merchandise is used when excitement and “buzz” are important and the company prioritizes a reward experience that is long-remembered.
- Travel is the penultimate [sic] reward – expensive and difficult to administer but offering enormous impact from an experiential perspective.
- Team events and in-house prizes build on teamwork and the feeling of celebration – impacting a large audience without a significant expense.
Dynamic Programs and Non-Cash Rewards
The study stresses the importance of “dynamic programs”, or programs that have a healthy mix of reward options. “Long term initiatives, such as annual top performer programs or ongoing employee recognition programs,” the report states, “are often supplemented with shorter-term programs meant to drive immediate results on business priorities.” Strikingly, non-cash rewards were “viewed as much more likely to be remembered and specifically appreciated by the employee as compared to cash.”
Program owners of all experience levels were aware that tailoring reward and recognition programs to their culture is the wisest approach. Many stressed the importance of “editing” the programs period-over-period to improve effectiveness. However, most respondents weren’t aware that their recognition providers could offer external design support, which is an industry best practice!
Executive and participant satisfaction emerged as key success measures for many programs. Interestingly, another key success metric IRF found was “offer[ing] rewards and recognition on pace with [one’s] competitors.” As comprehensive rewards and recognition programs become more and more prevalent, the race to deliver the best employee experience has become a top concern for retention and longevity.
Most program owners agreed that ongoing program communications is the most vulnerable gap in program design. It can be a challenge to get past the distractions of the workplace and the modern world to deliver a consistent and engaging message that keeps program participation up. IRF offers some practical advice on the matter:
“Program owners in environments with highly diverse employee segments must solve for program communications via whatever media employees are most likely to consume – mobile, digital, paper, and verbal may all be critical.”
Personalization of rewards is seen as a priority, with many respondents asserting that “’memorable’ will be different person-to-person.” Program owners also noted that “even the recognition aspect of a reward needs to be personalized, as some people may enjoy public acknowledgment while others prefer a more individualized approach.”
Two primary types of ROI measuring were identified as well. Universal programs meant to increase morale or build culture “often have no KPIs assigned,” and instead rely on anecdotal measurements like engagement surveys, roundtables, and focus groups. Performance-based programs like sales/channel incentives, safety, and daily productivity rewards typically target specific metrics that are measured in a more straightforward fashion.
There are many other insights in the full IRF report, and we encourage you to download it in its entirety. It’s a great resource as you move forward with your own program!