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Tracking the Long-Term Impact of Incentive Programs
Using Readily Available Employee Data to Measure the Long-Term Impact of Incentive Programs
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 resear ch 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.
To direct this project, Don Schultz, professor of integrated marketing at Northwestern University’s Medill School, was commissioned to conduct actual on-site research at major organizations to determine what effect incentive programs have over time. In the first phase, completed in September 1994, the study surveyed over 600 U.S. organizations to find out what sort of data they already have on hand that would enable researchers to track the hard and soft impact of incentive travel programs. In the second phase, researchers worked with a major U.S. corporation that uses incentive travel to measure the long -term impact of these programs on sales and other indices of performance.
Even though Phase I of this study primarily was intended to assist researchers in the implementation of on-site research, it yielded useful information organizations using incentive travel can put into action immediately to begin gauging the long-term results of their incentive programs. The study found that organizations already have considerable information about employee performance and actions that, if collected and analyzed together over time, could paint a mo re accurate picture of incentive travel results than currently exists today.
The study found that most companies collect detailed information on sales, profitability, customer service, quality, and job satisfaction, but that this information rarely is combined to analyze long-term results of incentive programs. In fact, the survey found, many people involved with planning incentive programs know that this information exists, but don’t use it in program development.
This report is designed to help incentive planners to consider new ways to gauge the real impact of their programs and find strategies to make them even more effective.
The Incentive Research Foundation gratefully acknowledges the support and contributions of Hall - Erickson, Inc., EIBTM Ltd., and the Las Vegas Convention/Visitors Authority.
Major Report Findings
- The types of information tracked by companies include psychological/personality and job satisfaction tests, absenteeism, turnover, performance evaluations, sales measures and customer service.
- Many of these measures can be used to evaluate the effect of incentive programs.
- Many of these measures can be converted into standardized numerical formats useful in evaluating long-term results.
- 85% of incentive programs measure sales; 70% profits, 68% service and 62% quality.
- 95% of companies use incentive programs for salespeople, 82% for management, 61% for customer service and 50% for office employees.
- 72% of non-sales employee incentive programs target office employees, the most frequently targeted group after sales employees.
- Only 18% of companies track job satisfaction, even though research shows a clear link between job satisfaction and performance.
- 25% of companies conduct psychological testing when hiring new employees, but almost none use this information in developing new incentive programs.
- Of companies that measure quality, less than half analyze employee product knowledge (49%) and customer retention (47%).
- Most organizations have information on absenteeism and employee turnover readily available, but do not look at this information when evaluating incentive programs.
- Most organizations have all of the necessary information to measure the long -term impact of incentive programs, but rarely is all the information collected by a single department or used together to evaluate incentive programs.