Guest Column - January/February 2009

Mission Critical

Maintaining Engagement and Motivation

By Norma Jean Knollenberg


ou can't cut your way to prosperity" is an often-quoted piece of business advice heard even more often these days amid the jitters on both Wall Street and Main Street. Just as that sage advice applies to corporate marketing and advertising budgets, so it goes for a company's employee incentive and rewards program.

While there may be an overriding temptation among businesses to target employee motivation and incentive programs as a way to trim costs during lean times, research conducted by the partner organizations of the Incentive Marketing Association (IMA)—the Incentive Federation and the Forum for People Performance Management and Measurement—has, in fact, shown a negative impact in lost talent, productivity and, consequently, future sales and profits once an economic turnaround begins.

For many businesses, these are generally unseen but large and unrecoverable costs. Companies today must be careful to protect the 85 percent of their assets that are tied up in the human knowledge and talent of their employees. One way to protect these assets is to resist cutting long-term employee incentive programs in favor of a short-term gain.

In fact, IMA research points to a direct connection between engaged, productive employees and profitability. That same research shows that non-cash incentives, such as merchandise and travel, are a significant motivator. Today's employees, who are working longer hours and taking fewer vacation days, are often moved to better performance by special incentives, which include travel opportunities.

Additional research has uncovered that companies that continue to invest in perks, rewards and recognition programs regardless of economic conditions tend to outperform their competitors. Companies that cut their incentives programs too severely run the risk of losing their top talent once economic conditions begin to improve. Many companies experienced that problem following the last recession in 2001.

Certainly, every company must act responsibly and use incentive programs appropriate to the current economy, and the economy of their particular industry. Incentive marketing professionals can examine a company's current employee incentive program, and, if needed, point the company in the direction to the right program that will produce the desired results.