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Incentive Planners Using Wide Range of Rewards

By Alex Palmer
October 4, 2011

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Travel, merchandise, and gift cards all continue to play a significant role in recognition programs, according to a new study from the Incentive Research Foundation and the Incentive Federation. 

The report, entitled “The Use of Reward and Recognition Awards in Organizations,” found a broad use of each category of awards, with solid majorities of respondents saying that they used travel, merchandise, as well as retail and prepaid gift cards for their employee and channel reward programs. Only 25 percent said they used cash for employee and channel programs. 

Drawing on the responses of 170 incentive program administrators, the survey found that out of all the award categories, gift cards proved especially popular, with 67 percent saying they used them for both employee and channel programs. More than a quarter of respondents (26 percent) said they only used gift cards—more than double the number who said the same about travel, merchandise, and cash.

“It was interesting to see the high use of cards, and the loyal use of them,” says Melissa Van Dyke (pictured), president of the Incentive Research Foundation, who presented the findings at the Motivation Show on Oct. 4. “But all of the non-cash awards were in play in motivation programs—there wasn’t one that was significantly non-existent, whether channel or employee audience.”

Van Dyke adds that the goal of the report was to gain a stronger understanding of the industry in order to move forward on efforts to promote and boost incentives to Corporate America. 

For every prize category, more respondents cited sales personnel as their target recipients than any other type of program participant. This was most pronounced in travel awards, for which 77.4 percent of users said members of the sales department were their most frequent participants, followed by executive management. Merchandise awards were more spread out, used most often for sales teams, at 65.7 percent, followed by customer service at 58.7 percent and operations and manufacturing at 53.3 percent. 

Travel incentive programs proved most popular with respondents boasting higher budgets. Those with more than $1 million available for incentives used travel awards 25.8 percent of the time, while only 4.4 and 4.5 percent used merchandise and prepaid cards, respectively. The opposite was true with respondents with lower budgets, where those with $10,001 to $50,000 budgeted preferred prepaid cards 20.7 percent of the time, while 14.1 percent preferred merchandise and only 11.3 percent chose travel rewards.

The correlation between large budgets and travel rewards was reflected in the average values of rewards reported in the survey. Respondents reported that travel awards had a median value of $2,500, compared to just $100 for merchandise and $50 for gift cards. 

Van Dyke describes the results as a good place to start, emphasizing that the data was meant to just get a sense of the incentive landscape, and that deeper investigations of the recognition programs are planned.

“A great thing about the survey is that over 80 percent of respondents volunteered to offer deeper information about their program,” says Van Dyke. “Next, we will be taking a programmatic view of the programs and their structures. We are looking for more than anecdotal understandings about why these different awards are being used.”
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