Study Highlights Use, Engagement With Incentive Programs Among Top-Performing Companies
More successful companies are investing in incentive programs now than last year, according to the Incentive Research Foundation’s (IRF) 2020 Top Performer Study, in comparing this year’s results to its previous study, conducted approximately one year ago. While it is difficult to establish whether strong support of incentive programs is the primary driver of a business’s success, or whether having a successful business leads to greater resources for rewards and incentives, the IRF reports that there is a clear relationship between incentives and business success.
The IRF’s study surveyed 400 participants overseeing the incentive programs of companies earning at least $100 million in revenue. Top-performing companies, 38 percent of those participating in the study, reported dramatic increases in their support of incentive programs over last year, most notably an increase in “excellent ratings” of submitted by employees about the programs, which increased from 19 percent in 2019 to 53 percent in the 2020 report. The IRF defines top-performing companies as those experiencing more than five-percent growth in revenue over the past year and meet certain criteria reflecting strong performances with customer satisfaction, acquisition and growth, and in employee satisfaction.
Top-performing companies also reported increases in “excellent” ratings in incentive program participation, which grew by 81 percent; their alignment to corporate goals, up by 54 percent; manager buy-in increased by 52 percent; budget increased by 26 percent, and executive support increased by 29 percent.
The percentage of top performers that design programs with the dual goal of reaching all participants, while also recognizing truly exceptional achievers, has more than doubled within the past year, going from 10 percent to 22 percent. They are also offering a greater variety of rewards, and more companies overall offer incentive trips compared to the previous study. The percentage of top performers that offer incentive trips more than doubled, increasing from 22 percent in the 2019 report to 45 percent in this year’s report. There were also large increases in the percentages of companies that offer gift cards as a reward. Companies offering gift cards rose 38 percent year over year among top performers.
When examining the priorities of top performers on tangible rewards and incentive trips, the study found that they understand the importance of flexibility and the relevance of rewards. They were nearly twice as likely to list flexibility as their most important consideration (33 percent) when giving merchandise or gift cards. The IRF notes that these data suggest that top performers understand that the personal relevance of the reward is more important than the perceived cash value. There are similar findings when looking at the priorities top performers place on their incentive trips. Once again, participant flexibility was the top priority for 28 percent of top performers, followed by generating brand loyalty with 19 percent, indicating this as their most important consideration through the incentive travel experience.
The percentage of “automatic” award winners based on achievement of incentive trips has increased year over year as well. Firms that automatically award salespeople with an incentive trip based on a predefined goal increased from 73 percent in the 2019 report to 84 percent this year for top performers. This trend is consistent for both sales incentive and channel partner incentive trips. Although meeting certain criteria is more likely to automatically qualify a salesperson for either a sales or channel partner incentive trip, the complexity around the qualification criteria is increasing. The percentage that said qualification criteria for the sales incentive trip was “complex” jumped significantly from seven percent in the 2019 study to 24 percent this year. Qualification complexity for channel partner incentive trip awards also jumped dramatically, from 11 percent in 2019 to 30 percent in 2020.
For more information from the study, click here.