When it comes to getting the most from incentive programs, tangible rewards should be the preferred option.
When it comes to creating an employee incentive program, companies have a number of options. Choosing the right one can have a significant impact on staff performance and production levels within organizations.
These initiatives can help to raise morale and create a more engaging environment for workers. However, a study by the Incentive Research Foundation found that not all reward programs have the same motivating effect on employees. When it comes to getting the most from incentive programs, tangible rewards should be the preferred option, the report states. By reviewing company performance, the study found that firms that offer non-cash awards saw a better return on their investments in terms of productivity and staff engagement.
"Like any other business expense, the funding of reward programs attracts intense scrutiny from business leaders looking to slash costs," Incentive Federation Chairman Karen Renk. "For that reason the importance of these findings cannot be overstressed: travel and merchandise wards often produce greater bottom-line benefits than other incentive alternatives. It is nothing short of a game changer."
The study found that tangible rewards, such as a new television, iPad, or other device, had longer staying power than cash. The more employees used the prizes, the more they were reminded of the acknowledgement of their performances. This can create strong loyalty and motivate workers to expand their roles.
Despite these results, many companies continue to rely on pay-for-performance programs. More than 83 percent of organizations have some form of performance based pay system in place. These management tools can be helpful, but survey respondents noted that they felt businesses were not getting the desired rate of return. Creating incentive programs that offer more tangible rewards may help companies achieve their management goals.