Scientific Studies Highlighting the Benefits of Tangible Rewards over Cash
Studies Highlighting the Benefits of Tangible Rewards
Perks develops and administers incentive programs with an in-depth understanding of the science behind employee motivation. This understanding has been gained through decades of careful analysis of various incentive programs (primary research) as well as comprehensive review of the studies conducted by others (secondary research).
Goodyear Tire & Rubber Company
A study conducted for the Goodyear Tire & Rubber Company demonstrated that while the performance of a group of participants rewarded with cash and another group rewarded with tangible incentives improved during the program, the increase shown by those receiving tangible rewards was nearly 50 percent more than those of the other group.
Our own studies and the "living laboratories" of our clients have repeatedly demonstrated similar findings. Of note and importance to your business is that the "extra" performance is what makes good return on investment - into an exceptional return
The results of a survey conducted by Wirthlin Worldwide (March 1999) of 1,010 people who were asked how they spent their last cash reward, cash incentive or cash bonus highlighted the limited impact of cash incentives.
|Do not remember||18%|
|Never received cash reward/bonus||15 %|
|Gifts for family||11 %|
|Household items||11 %|
|Special personal treat||9 %|
|Something else||2 %|
The tangible rewards participants earn through Perks create a lasting impression which in turn stimulates the performance of employees and co-workers for much longer than "slippery" cash.
In a survey conducted by AEIS, 17% of the American employees polled said they had received a year-end cash bonus. A full 32% of these respondents admitted that the cash bonus did not improve their work performance. For more information about this study and other supporting information, please visit http://www.aeis.com/Why_Incentives.html.
At Perks, we not only ensure that the rewards are meaningful and leave a lasting impression on the participants, but mainly consider the impact our rewards have on the targeted behaviors.
WorldatWork (formerly the American Compensation Association) found than non-cash rewards programs achieved three times the return on investment compared with cash-based programs. A recent Incentive Federation survey found that on average, 79% of respondents found non-cash reward programs to be fairly to extremely effective in motivating participants to achieve sales and marketing goals.
International Society of Performance Improvement
According to a study by the International Society of Performance Improvement called "Incentives, Motivation and Workplace Performance: Research and Best Practices," incentive programs that are implemented and tracked correctly, in addition to offering tangible awards increase performance by an average of 22 percent. Team incentives increase performance by as much as 44 percent.
The Aberdeen Group
The Aberdeen Group found that companies with a strong link between enterprise strategy and rewards programs generate a shareholder return which is almost 40 percent higher than competitors without such strategies.
Incentive Federation Survey of Motivation and Incentive Applications.
Incentive program planners say merchandise incentives and travel incentives are more compelling than cash:
* Sixty-eight percent of respondents say bonus payments can have a negative impact if they are not paid or are not large enough * Three of five respondents say merchandise or travel is preferred because they are more like a gift * Three of five respondents say that a cash payment is perceived to be part of an employee's total remuneration package.
The Society of Incentive & Travel Executives
A study produced by The Society of Incentive & Travel Executives (SITE) Foundation confirms the impact of incentive programs employing tangible awards. According to the study, incentive programs increase work performance an average of 22 percent. The study also finds that, "Incentives help create positive emotion in the workplace, which greatly influences commitment to a work task," says Mike Hadlow, president of both the SITE Foundation and of USMotivation, an Atlanta-based people performance management company. "Incentive programs may be the single most important performance improvement tool available to executives today, " he adds.
In a May 1998 Promo Magazine Special Report, it was noted that LifeUSA attracted new agents and sent sales soaring by abandoning its annual cash incentive program for a more inclusive campaign that gave out merchandise and travel.Only top-producing agents were included in previous years, so the company built multiple award levels into their incentive program to involve new agents as well as old pros. By the program's conclusion, policy enrollments exceeded LifeUSA's initial goals by 700%. The 10,000 certificates issued were more than twice what the company had planned for.
Andersen Consulting found in a survey of about 500 executives at more than 250 companies that programs to retain and reward leading sales, marketing and customer service people can give a $40 million lift to a $1 billion business's bottom line.