by Leo Jakobson | May 22, 2014
If there's a core belief at the heart of the incentive industry, it is that the trophy value of tangible, non-cash awards is the most effective way to drive performance. 

These awards cover a wide range of items and travel experiences, from a $5 Starbucks gift card to a TV or an all-expenses-paid trip to a five-star resort. 

"Both merchandise and travel have similar trophy value," says Rodger D. Stotz, chief research officer of the Incentive Research Foundation. "It's about experience; people are motivated by experiences. When you talk to incentive recipients, they talk about the merchandise, but also the experience of using it -- wearing the necklace, watching the TV. And travel is, primarily, an experience." 

What all of those awards have in common, says Dr. Scott Jeffrey, an assistant professor at Monmouth University's Leon Hess Business School, is salience. That is, they stand out prominently in the memory of an employee in an incentive program, both while they are working to achieve the incentive program's goals and long after they win. "The more people think about the awards, the better they work," he says, citing "Incentive Salience and Improved Performance," a paper he published in the journal, Human Performance, in 2011. 

Why Trophy Value Works

"The first benefit of trophy value has to do with triggering recall," Jeffrey says. "When you see it, it reminds you both of the performance that led to it and reconnects you to the firm."  That aspect is a key to the importance of trophy value for Scott Pyott, director of sales operations for Endo Pharmaceutics, a global pharmaceutical firm with U.S. headquarters in Malvern, PA. Pyott uses two major incentive programs to motivate his sales force: a Circle of Excellence trip to a five-star resort for top performers and their significant others, and a points-based program managed by Maritz Motivation, which everyone particpates in. Points can be used in a variety of ways, starting with Maritz's own extensive catalog of merchandise and individual travel awards. But it can also be used as a credit card at select retailers like Macy's, Pottery Barn, and The Gap. 

"The beauty of it is they still get a tangible item, to me that is the big winning piece," Pyott says. "They can't go get gas, diapers, groceries, things they'll forget about. That doesn't have the same trophy value as buying a plasma screen TV or taking their family on a Disney World vacation. That's the piece that will never go away. It links their accomplishments  all they did to earn those points  to how hard they worked to get that TV. Every time the family is sitting around the living room watching a movie, it is a constant reminder of what they can do and what they can get by working a little harder, and going above and beyond  which is where the company benefits as well." 

In that way, the award itself becomes an actual trophy  "the outward sign or badge of honor for a job well done and achievement of the highest honor," says Joe Zanone, president of Zanone Sales, an incentive merchandise marketing firm. 

"Trophy value is synonymous with residual value," says Paul Gordon, vice president of
sales for Pine Brook, NJ-based Rymax Marketing Services. "You have a watch that you look at for the next 20 years, a TV that you watch for the next 15 years. And you tell the story the corporation wants you to tell: 'I got this for hitting my goal.'" 

That "story" is another key to the importance of trophy value. When incentive program rewards have trophy value, they inspire more than just the salespeople who hit their
goals and won the award. 

Zanone adds, "This recognition also is a visible sign to all co-workers, encouraging them to reach for a higher level as well, and it promotes behavioral change in the workplace."

Pyott agrees that making the awards public, communicating what the recipients won, and how they achieved the necessary goals throughout the company are very important. That is one reason why Endo Pharmaceuticals' Circle of Excellence winners are called up on stage to be congratulated during the national sales meeting, and not just during the incentive trip. 

"The way I look at it is I'm marketing all this to our sales people and 99.5 percent of them love the recognition of getting called up on stage to be recognized as a Circle of Excellence award winner at our national meeting," Pyott says. "They love that spotlight. And for those people who aren't being called up on stage, they want to be there. It motivates them to get up on stage and then go on that trip." 

This dynamic applies just as much to merchandise and gift card awards, says Rich Killian, president of Orlando, FL-based RK Incentives.

"Presentation is key, because you're not only getting mileage out of the folks who won, you're going to get mileage out of the folks who didn't win," he says. "If there's a contest for 100 people, and only 10 won, those other 90 people who saw that presentation are going to say, 'Hey, next week, or next quarter, or next year, I'm going to step up and I'm going to be on that stage.' So, you get mileage with the 90 people who haven't won the award." 

Jeffrey's research backs that up. As part of the Site Foundation's 2012 "Participant's Viewpoint" study, Jeffrey surveyed both incentive program winners and non-winners and found that only 9 percent of non-winners felt bitter as a result of the program, compared with 68 percent who did not. And 67 percent of non-winners said they intend to work harder to win the award in the future, compared with less than 3 percent who said they did not.

Choosing the Right Award

"We want people to talk about their reward," says Mary Luckey, director of reward strategy for St. Louis, MO-based Maritz Motivation. "If people are not getting excited about your rewards, save your money  they are not going to be engaged and are not going to do what you want them to. A reward has to be worth the effort that you're going to go through to get it." 

One way to get people excited about the awards is to give them a wide enough choice of merchandise or gift cards so there will be something to appeal to everyone. That is why most points-based incentive programs allow participants to choose from a catalog of options. 

"In order to have a reward that works, it has to be meaningful to the recipient," Luckey says. "Two people could be the same age, be working for the same company, but be interested in very different things. I have to offer enough choice that you're going to find something for you and I'm going to find something for me." 

Group travel is another way to get people excited. "I definitely think of Monaco as a trophy destination," says Cindy Hoddeson, director of meeting and incentive sales at the Monaco Government Tourist Office. "Monaco is iconic. When people think about it they think of Princess Grace, of royalty, and mega-yachts. They think of it as a place they couldn't go on their own." 

Dick Gaeta, president of Salem, MA-based Premier Incentives, adds, "Most people are lucky if they get to Miami. If they go to London or Rome or Paris, that's huge. That's trophy value to me. A lot of times, a really high-end, quality incentive travel program is the vacation for that person for the year, or maybe two or three years." Factor in more exotic destinations like Cannes, France; Australia; or Dubai, and "it blows the lid off their expectations," Gaeta adds. 

"The post-trip value is the memories -- those memories and the bragging rights the trip provides is the 'trophy,'" Hoddeson says. "We were the ones who made it  you'll remember that."

Cash Is Not King

Another thing that merchandise, travel, and gift card awards have in common is that they are not cash. While participant surveys have shown over and over that the vast majority of incentive program participants would prefer cash awards to travel, merchandise, or gift cards, the experience of incentive professionals has taught them that cash awards have many downsides for the sponsoring company. 

"There is no trophy value to cash," says Jim Dittman, president of New Brunswick, NJ-based Dittman Incentive Marketing. "You earn it, it goes into one pocket and out the other to pay an orthodontics bill or to buy a pack of cigarettes. Ask people what was on their [IRS form] W-2, and no one remembers. Ask about an incentive trip they took 10 years ago and they'll remember every minute of it." 

That's a widely shared opinion among incentive professionals, borne of long experience. But it is also something Jeffrey says his research supports. 

"In my past research I've talked about it as the 'want self' versus the 'should self.' When you get cash, the 'should self' drives your behavior. So, it becomes braces for the kids, college savings, whatever. And that is certainly much less vivid and much less 'in the memory' of an employee. It's less emotional and less impactful. The half-life in memory of a cash bonus is only about two months." 

Nor does the company gain the benefits of incentive winners talking to their colleagues about what they won and how they won it. 

"If you are given cash for a job well done, you don't talk about it," says Luckey. 

"It's kind of crass, unless you work on Wall Street, to talk about the money that you make," Jeffrey notes.