We are always ready to listen to leaders in our industry. The Achievers.com web site blog section on Employee Engagement features an excellent review of how performance incentives have evolved as an integral part of business and enterprise management.
Businesses have been incentivising their workforces, to improve performance and increase staff retention, since the early days of the Industrial Revolution. In the 20th century, manipulating pay structures, introducing bonuses and competition between top achievers became established business management tools across manufacturing and service sectors, especially with sales incentives.
The rate of change has increased rapidly since the dawn of the Information Age. The internet and social media have transformed personalised communication, while mass data are informing strategy by profiling habits and predicting behaviour in previously impossible detail.
In addition, social changes over a wide spectrum are affecting reward and recognition strategy. Focus on equality, respect, well-being and lifestyle choices all influence management thinking about how to motivate and engage with employees, channel partners and other business stakeholders. Aspirations and values have shifted away from pure materialism towards inclusion, involvement, personal rights and recognition. These attitudes apply at work as much as in society at large.
Innovation in incentives
This is an extract from the Achievers.com article which summarises the changing scene very well:
“Standard compensation systems that rewarded people for just showing up and completing their baseline tasks are no longer enough. To differentiate themselves today, companies rely on people going beyond their core job — innovating, training recruits, adapting their performance to new challenges, expanding their skillsets.
The incentives that are most successful at eliciting these behaviors include a wide variety of short-term incentives overlaid with authentic employee recognition. They must be customized to the individual and closely aligned with the company’s mission and values. This combination is what is now recognized to lead to the best outcomes and the highest prosperity level for your company.”
Also featured in the article are these impressive statistics:
- 70 percent of all U.S. businesses now use gift card incentive programs
- Workers who do not feel recognized for their efforts are twice as likely to say they’re planning to quit in the coming year
- 90 percent of large enterprises use technology to implement their incentives and reward programs
- Companies with effective recognition and reward programs experience 31 percent less voluntary turnover
- 69 percent of employees in an Achievers survey say that receiving recognition and rewards would motivate them to stay at their current jobs
- 85 percent of workers in one British survey reported that they “felt more motivated to do their best when an incentive was offered”
- Corporations that implemented an employee rewards program found that their overall profits increased by an average of $123,600 per week
- When companies initiate a reward program, they see a 14 percent improvement in their employee engagement
- 55 percent of employees state that their job performance is affected by the quality of their company’s recognition program.
All of this evidence clearly points to the effectiveness and value of incentives in the workplace, but also demonstrates that research and planning are essential. Every incentive programme should be measured on the ROI it produces. Return on investment can take many forms, both quantitative and qualitative.
The key objective of performance incentives, live events, including conferences and business presentations, product launches, hospitality events and reward and recognition programmes, including incentive travel, is to change behaviour. That will result from first changing attitudes by sharing information and ideas, encouraging engagement and ultimately securing involvement.