The Incentive Research Foundation (IRF) has released an Award Program Value & Evidence report highlighting the advantages of non-cash rewards and how businesses are measuring the program benefits.
IRF president, Melissa Van Dyke, said: “Most leaders expect their investments in incentive, reward and recognition programs to meet specific goals, such as driving more sales, increasing revenue, or producing some other return on investment.
“Award Program Value & Evidence presents a strong case for using non-cash reward programs to motivate employees and practical advice on how to measure the success of these programs to ensure goals are met.”
The report discusses the role of recognition in incentive and reward programmes and explains the psychology behind why non-cash rewards are so effective. Key findings include:
Advantages of Non-Cash Rewards
- People tend to make utilitarian purchases (e.g., groceries) when given a cash reward. Non-cash rewards (e.g., fun experiences, splurges) can create lasting memories and positive associations.
- According to “The Ikea Effect,” people put more value on tangible rewards that they have to work toward
- Non-cash rewards have a “trophy value.” They are highly visible, and it’s more socially acceptable to talk about merchandise or a trip than to “brag” about a cash incentive
Measuring Incentive, Reward and Recognition Programs
- Clearly defined, measurable objectives are among the most important success factors in IRR programs
- Metrics for tangible benefits include decreased staff turnover, increase productivity, sales, revenue, market share, gains in customer satisfaction, and customer acquisition
- While more difficult to measure, metrics for intangible benefits include employee presenteeism and satisfaction
- An effective ROI analysis compares the full costs of an incentive program to its gains – both tangible and intangible
Read the full report here: http://theirf.org/research/award-program-value-evidence-white-paper/2455/