Analyzes Six Popular Rewards Offered by Businesses Evaluates Motivational Rewards Effect

A Special Note Before You Begin

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.

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Introduction

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 anecdo tal 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.

Survey Methodology

The sample was selected using a stratified random sampling procedure. Subpopulation frames were developed based upon geographic regions. A random selection was made of two or three offices within each sales region. A package of the appropriate number of surveys was then sent to each of the selected offices. Further, it was decided that questionnaires would be sent to each of the 75 district managers, regardless of whether their office had been selected for the study. Therefore, 100% of the district managers, 25.2 1% of the sales mangers and 25 .24% of the sales agents were surveyed for a total sample size of 534.

The data were collected through mailed surveys (Appendix A). The questionnaire began by explaining that some of the incentive rewards in the survey instrument were currently not being offered at the company. Therefore, the potential respondent was provided with a list of six rewards and a brief explanation of each. Cash rewards were described as involving up to $1,000 in cash. Merchandise aw ards were described as including such items as answering machines, calculators, cameras, and pens. Sales conference trips were described as the trips to sales conferences that take place annually. Recognition awards included such items as trophies, plaques, company rings, desk sets, and publicity notices, while status awards involved induction into special clubs, upgrades on business cards, and automobile leasings. Finally, personal vacation trips were referred to as weekend excursions or get-a-ways to selected destinations. These explanations were developed by the company and were based on past incentive rewards.

The instrument utilized forced-choice questions, with the exception of three open -ended questions (Appendix B). The first asked respondents to react to the question, “What other types of rewards would you like to see offered at this company?” The remaining two items asked respondents to indicate the greatest strength and weakness of the incentive rewards at the company.

The response packages consisted of: (a) a memorandum regarding the procedures that were to be followed for distributing the questionnaires; (b) cover letters for each of the potential respondents assuring them of complete confidentiality; (c) an appropriate number of questionnaires; and (d) a priority mail envelope that was postage paid and addressed to the researcher at Clemson University. The memorandum to district office managers instructed them to have each person in their office complete the questionnaire at their district offic e meeting on report day. A volunteer was then, in front of the entire office, instructed to put all the completed questionnaires into the priority mail envelope provided. Handling the distribution procedure in this way guaranteed confidentiality. This survey procedure yielded an overall response rate of 81.1%.

Description of the Sample

The sample consisted of a fairly homogeneous group. The largest percentage of the respondents were males between 35 and 44 years of age. Females comprised 16.7% of the samp le. There was little racial diversity in the sample group. The majority indicated that “White (not Hispanic)” best described their ethnic background. There was a fairly even distribution across the three classifications for tenure with the company. Almos t 35% indicated that they had been with the company “less than one year”, compared to 33.1% who selected “two to five years” and 32.4% who selected “more than six years”. The majority of the sample, 72.4%, indicated that they were sales agents with the company. This was followed by 15.1% who selected the district manager classification and 12.5% who indicated that they belonged to the sales manager classification. The respondents were also asked to indicate their household incomes before taxes for the last calendar year. Approximately 35% indicated that their household income was “less than $29,999”, followed by 33.4% who selected “$30,000 to $49,999” as their household income. Finally, the majority of the respondents, 46.8%, indicated that “some college” be st described their current education status.

To determine if there were significant differences between the sample and the company population, the two groups were compared in terms of age, gender, and marital status. There were no significant differences between the two groups and thus, it can be inferred that the sample was representative of the company population in reference to these key personal variables.

 

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