Businesses’ outlooks on incentive programs may be changing in light of the pandemic and associated economic downturn. In the Incentive Research Federation’s new study, “Metrics of Success for Incentive and Reward Programs,” it examines how businesses are measuring, reporting and defending the benefits of incentive programs to draw insights into their present thinking.
“Your incentive program is an important tool to motivate your workforce and keep them engaged, particularly as the hard work of rebuilding business begins,” says Stephanie Harris, president of IRF. “Taking steps to position your program as a driver of performance and revenue with a strong combination of hard and soft metrics can help solidify your program’s place within your organization.”
The IRF notes that historically, incentive programs were primarily believed to drive “soft” outcomes like engagement, morale and loyalty, and in the face of a global pandemic, with companies challenged to dramatically cut costs, difficult decisions are being made about what is essential versus expendable. However, the data presented in the study show this trend was beginning to change, even prior to the pandemic, as the industry started to place more focus on hard metrics showing return on investment.
When the study was administered during the summer of 2019, 27 percent of respondents indicated that in the event of an economic downturn, they would be asked to discontinue non-cash reward and recognition programs until business improved. The largest percentage (43 percent) said they would proportionately reduce program budgets to match wider company budget reductions.
Data in the report also shows that most program owners (78 percent) considered their incentive programs to be successful. This was especially true of large businesses, with 85 percent of program owners at companies with revenues in excess of $1 billion reporting success.
The report also shows that the majority of program owners (81 percent) believed external partners could provide insight to improve program results. However, only about one-third (36 percent) worked with outside agencies to support their incentive and rewards programs, and one-third (31 percent) worked with external consultants to evaluate their programs. While most (82 percent) said detailed analysis would guide executive investment decisions if it were available, more than 40 percent of companies reported that they struggled to get their executive teams to pay attention to the data.
To download a copy of the full study, infographic and white paper, click here.
