Web Exclusive - January/February 2018

Research Examines How to Design for Success

By Deborah L. Vence

The Incentive Research Foundation (IRF) recently released a report on design elements for effective non-cash recognition and rewards programs.

The study, called Designing for Successes: Effective Design Patterns for Employee and Sales Programs, which can be found at theirf.org, involved several years of research to identify design elements for effective non-cash recognition and reward programs. The study examined effective design patterns for two main incentives program types—employee and sales.

"With 84 percent [of] all U.S. businesses now using non-cash awards, it is critical to understand how to create effective programs," stated Melissa Van Dyke, president of the IRF. "Designing for Successes: Effective Design Patterns for Employee and Sales Programs details patterns in effective program design used by top-performing companies."

The report indicated top trends and strategies employed by successful employee recognition and reward programs. They include the following:

  • Top-performing companies are two times more likely to have a consolidated program or single employee program across the company.
  • Non-cash rewards are an effective motivator for engaging employees who take on non-core job roles.
  • The top objectives of employee programs are improving morale (84 percent), improving productivity (58 percent) and improving customer satisfaction (48 percent).
  • The most prevalent types of awards in employee programs are gift cards (71 percent of businesses), merchandise (38 percent), award points (36 percent) and travel (30 percent).

In addition, the study showed that with 60 percent of all U.S. businesses using non-cash sales rewards, spending conservatively $23 billion annually on these awards, effective design of sales incentive programs includes:

  • The top objectives for sales rewards and incentive programs are increasing overall sales (80 percent), improving morale (76 percent) and improving productivity (58 percent).
  • Individualized sales quotas are used by 80 percent of top performing organizations.
  • Incentive programs are most successful when they are designed to reflect and enhance the organization's corporate culture.
  • More than 80 percent of U.S. firms use more than one award type. On average, businesses use more than seven types of awards for sales incentives.
  • The three performance metrics most often used to evaluate the success of sales incentive programs are: product sales in dollars (66 percent), net new customers (49 percent) and product sales in units (37 percent).