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Business Incentive Research

Research That Explores The Best Practices And Effectiveness Of Incentive And Loyalty Programs

We’ve assembled a collection of reports and research papers published by Loyaltyworks and other industry leaders in the field of incentives, rewards and motivation. Enjoy, and feel free to contact us with recommendations on papers to add to our collection.

Research from Loyaltyworks

Research From The Incentive Research Foundation

The Incentive Research Foundation funds and promotes research to advance the science, enhance the awareness and appropriate application of motivation and incentives in business and industry globally. The goal is to increase the understanding, effective use and resultant benefits of incentives to businesses that currently use incentives and others interested in improved performance. For more information about the Incentive Research Foundation visit www.theirf.org.

Driving Our Future: The Top 11 Incentive Trends for 2011
The incentive industry has come a long way since the 80s when there were few players in the field and the emphasis was largely on sales incentives. 30 years later, competition is fierce as the industry is saturated by hundreds of smaller players offering a wide range of incentive solutions that are no longer solely focused on sales. Employee engagement programs, customer loyalty and Corporate Social Responsibility (CSR), as shown in numerous studies, have significantly increased in popularity.

After conducting a thorough analysis of existing research and incentive industry and business publications, the Incentive Research Foundation presents its 11 trends for 2011, which demonstrate that the current economic challenges have definitely had an impact on the perception and use of incentives.

2010 Incentive Industry Trends: The Incentive Research Foundation Pulse Survey Report
Overview: Last year was a challenging one for the incentive industry, but as 2010 unfolds, it continues to be a vital, multi-billion-dollar business that plays a critical role in motivation, engagement, productivity and profitability at hundreds of thousands of companies worldwide. A recent Pulse survey by the Incentive Research Foundation reveals several indications of (slightly) rosier times ahead. While the industry is not quite ready to breathe a sigh of relief, these results indicate a brightening outlook as practitioners plan programs for 2010.

Cautiously optimistic is the term I would use to describe the overall message in the data from the survey,” says Mark Peterman, Chairman of the IRF Research Committee. “Our sense is that companies may have been sitting on budgets for the past 10 months or so waiting to see how things were going to play out and whether there was going to be more pushback from the media and community regarding incentives.

Attractiveness & Effectiveness of Incentive Reward Options
– Analyzes Six Popular Rewards Offered by Businesses
– Evaluates Motivational Rewards Effect

Overview: This Case Study, although developed in 1993, provides an excellent example of the full range of analysis questions that can be used to evaluate the attractiveness and effectiveness of Incentive Reward Options. The Incentive Research Foundation offers this early study to you, the incentive travel executive, in the hopes that it is helpful to you in the area of program design, as well as in post-program assessments. Sales and marketing management have traditionally utilized travel incentives as a means of motivating their sales forces to achieve and sustain exceptional levels of performance. Many previous anecdotal reports of travel incentive programs have portrayed them to be a panacea in the work place. However, there is a lack of comprehensive, empirically based research which adequately examines the impact and attractiveness of travel rewards. Furthermore, in order to evaluate incentive travel programs, it is necessary to examine the entire incentive program system. To this end, a study was conducted at a life insurance company that currently offers a variety of incentive rewards to its employees.

The Benefits of Tangible Non-Monetary Incentives
Four Psychological Processes Tip The Scales In Favor of Tangible, Non-Cash Incentives …

Overview: There is perhaps no subject debated more frequently (or as vehemently) by incentive program practitioners and their clients than the value of tangible, non-monetary (also referred to as non-cash) incentives versus cash.

Incentives, Motivation and Workplace Performance
Research & Best Practices

Overview: Each year, U.S. corporations spend nearly twenty-seven billion dollars on non-cash incentives, such as merchandise, meals, travel, and recognition awards. When cash incentives are included, the figure is estimated to be as high as $117 billion annually. In spite of 100 or more years of studies on the impact of incentives, discrepancies about their value remain.

For years, researchers from the fields of accounting, education, economics, communications, human factors, psychology, and sociology, have conducted various organizational and laboratory studies on the subject of incentive systems. Due perhaps to the breadth of such research conducted by so many varying disciplines, conflicting information and controversies have resulted. This report was prepared with the goal of creating clear, comprehensive, and accurate conclusions about incentive systems that are supported by research and practice.

The Master Measurement Model of Employee Performance
Overview: This is a much-needed guide for measuring performance in the workplace. If you’re a creative executive or manager, and you’re constantly seeking ways to improve productivity and quality in the workplace, this guide will help you. With today’s emphasis on energizing employees toward greater performance — especially in the service sector — the job of gauging and improving output has become paramount. And while many have deemed “performance” an immeasurable intangible, this guide shows how every job and every task can be measured, improved and rewarded.
Measuring the ROI of Sales Incentive Programs
Overview: Sales incentives such as merchandise, meals, travel (and other forms of rewards and recognition) represent a multi-billion dollar industry in the U.S. Some estimates put the annual amount at well over $100 billion (Stolovitch, Clark and Condly 2002). Despite widespread acceptance of incentives as part of sales compensation, true impact on sales performance is often questioned. Proving that a sales incentive program delivered a return on investment (ROI) is one of the most daunting challenges facing incentive program administrators and incentive firms. To say that a sales incentive program was successful in terms of meeting certain objectives is one thing – but it is in the boardroom that actual financial pay back is most hotly debated. To the rescue is the scientific method to determine “causality” – the main subject of this report. At the boardroom level, providing a true ROI measurement requires “causal proof” that the program had a direct and inarguable impact on the numbers.
Motivation in the Hospitality Industry
A new study on employee motivation and performance lays the groundwork for creation of the IRF Motivation Index.

Overview: Employee turnover within the U.S. fast-food and hotel industries costs those industries in the neighborhood of $140 billion annually. In more bite-sized terms, it will cost roughly 100% to 200% of an employee’s base salary to recruit and train a replacement. Although the turnover rate for these industries hovers between 78.3 percent and 95.4 percent on a national basis, some fast-food restaurants and hotels experience much lower rates, and have significantly greater success retaining employees. Overall, higher levels of motivation and motivated performance translate into a 53 percent reduction in worker turnover. It is generally understood that employment in these industries is often considered to be temporary, or stop-gap employment, with workers leaving eventually for what they will consider “greener pastures.” And certainly, different economics are at work depending on the region, the type of establishment, etc. However, turnover rates also vary within the same economies, the same chains, the same cities, and the same regions. All things being equal, then, what accounts for the differences in turnover rates? And more importantly, what can managers do to reduce turnover at their properties?

The Site Foundation is seeking to answer those questions by studying employee motivation and performance in the fast- food and hotel industries. The study – Motivation in the Hospitality Industry – measures key indices of motivated behavior using the widely recognized CANE (Commitment And Necessary Effort) Model of Motivation. The following describes key findings from research to date and offers methods managers can use to reduce turnover in their fast-food or hotel operations.

Assessing the Impact of Sales Incentive Programs
a Business Process Perspective

Overview: This research represents an extension of a previous study sponsored by the Incentive Research Foundation that described ROI (return on investment) assessment of sales incentive programs. The present study adopts a business process view of sales incentive programs noting that their impact can extend well beyond the sales function to other constituents within the organization.

Tracking the Long-Term Impact of Incentive Programs
Using Readily Available Employee Data to Measure the Long-Term Impact of Incentive Programs

Overview: In the past few years, companies in the United States, Europe, Australia, and parts of Asia have broadened the use of incentive travel to include many different types of employees and have become more sophisticated in the way they measure employee performance. Yet, despite the fact that the world’s businesses spend more than $10 billion on incentive travel, there is no research that gauges the long-term impact of incentive travel on organizations and their people. As a result, The Incentive Research Foundation has undertaken a multi -year effort to track organizations that use incentive travel to see how these programs affect performance and to determine what organizations can do to maximize the effectiveness of incentive travel programs.

2011 Incentive Research Foundation Survey Finds New Trends
A joint Survey conducted by the Incentive Research Foundation (IRF) and Corporate Meetings & Incentives (CMI) predicts interesting trends for the industry in 2011. The “2011 Incentive Trends Survey” indicates the market for incentive marketing initiatives is slowly improving despite continuing budget cuts.

And, while slight increases in incentive program spending can be expected in 2011, the tendency towards cancelling programs will continue as pressure to reduce spending prevails. Reward quality remains the main focus for incentive planners and when pressured to reduce costs they’ve typically elected to reduce program size rather than compromise quality.

While planners continue looking for creative ways to reduce spending, attendees have generally remained “as positive as in past years” or “grateful just to be having a trip”, and only a quarter has indicated they “are getting used to a lower level of service and amenities”