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Research /Legacy Research / Game Mechanics, Incentives & Recognition
by Dr. Michael Wu, PhD
To listen to a webinar on the paper, click here.
It’s not just the 16-year olds playing games today — “game mechanics” are being applied in learning applications like flight simulators, consumer marketing applications, and business-based incentives — across all demographics.
And for good reason. Gaming techniques, such as leader boards, simulations, challenges, “top scorers” and the like are natural extensions of performance-based work. Additionally, Reward & Recognition professionals are probably best positioned to both use and move this important concept forward. After extensive review of the current literature available and input from multiple experts, the following paper provides the IRF’s findings on the role of gamification in incentives and recognition.
As game mechanics in business (and specifically in the incentive industry) become more prominent, individuals or organizations within the incentive industry need to understand the value of this important application. This paper’s goal is to help businesses and their employees understand the power of effectively applied gamification techniques to engage, inform, market and motivate.
Gamification* has long been applied to learning and marketing. Just think of how the military has embedded gaming techniques into its flight simulators. Today, businesses and marketers — especially in the consumer space – regularly employ gaming techniques to:
· Engage employees in learning activities;
· Simplify learning is complex systems
· Create continuous employee performance management platforms;
· Support sales force use of customer relationship management software;
· Enhance consumer brand awareness.
Gamification is important to incentives and is a natural evolution of performance improvement and the application of incentives to business results.
The Need to Simplify
Companies and their employees have grown weary of spending the time needed to master products and systems of growing complexity. Multiple systems for managing business and employee activities (i.e. accounting systems, travel booking systems, time systems, sales enablement tools, wellness platforms, training platforms, etc.) make learning and routine reporting more difficult and time-consuming.
The Need to Engage
Employees become increasingly disengaged and frustrated when learning is too hard or they don’t know where to start or go next. In addition, little has been done to deploy feedback and social tools within the enterprise, or to help employees better grasp their progress, their achievements and how they stack up to their peers.
Estimates are that $3.4 trillion is lost annually by companies under-utilizing technology. In addition, because only 31% of employees are estimated to be actively engaged in their jobs, the cost of disengagement is exceedingly high.
A Top Technology Trend
Early adopters were applying gaming to business incentives in early 2000. Since then, the Early Majority has been on a learning and application curve that has helped accelerate the growth of gaming in business.
Gartner  predicts that in 2012, 100 of the top 135 global Fortune 500 companies will use serious gaming in training; and that by 2014, more than 70% of the global 2,000 organizations will have at least one gamified application. Additionally, Deloitte  cited gamification as a Top 10 Technology Trend for 2012 that is driving adoption, performance, and engagement in various business practices.
Who’s Holding the Controllers?
Gaming techniques are becoming more and more prevalent in our everyday work experiences. This trend is on track with online gaming which, according to the Entertainment Software Association, sees 67% of U.S. heads of households playing them and these demographics: 
· Average age: 35
· 47% of PC gamers are older
· 43% of PC and console gamers are female
Gamification and Game Mechanics are a topic of study among experts from various disciplines. Views from the following experts have been researched to bring you this white paper. For information about any of the sources provided here, see the Appendix and simply click on the thought leaders name.
Bunchball is a San Francisco-based technology company with extensive expertise in applying game mechanics to reward and recognition efforts.
Deloitte is the second largest professional services network in the world by revenue and has 193,000 employees in more than 150 countries providing audit, tax, consulting, enterprise risk and financial advisory services.
Dr. Michael Wu, Ph.D. was voted the 2012 Influential Leader by CRM Magazine for his work on predictive social analytics and its application to Social CRM. Dr. Wu is the Principal Scientists for Lithium Technologies.
Gartner, Inc. is a world leading information technology research and advisory company, consisting of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events.
Richard Allan Bartle is a British writer, professor and game researcher, best known for being the co-creator of MUD1 and the author of the seminal Designing Virtual Worlds. He is one of the pioneers of the online game industry.
Jane McGonical, Ph.D. is world-renowned game designer designed to improve real lives and solve real problems. She is the New York Times bestselling author of Reality is Broken: Why Games Make Us Better and How They Can Change the World (Penguin Press, 2011).
The focus of gamification is not to turn work functions into a “game.” Expense reports don’t become Angry Birds and lead generation programs should not become Guitar Hero.
The intent is to frame work functions in the language and metaphors of gaming, but with the goal of engaging and motivating employees. This happens by focusing on behaviors that address key corporate objectives or ROI — those particular behaviors that employees may not perform as often as desired. This is substantially different from simply “making work fun.” “Game thinking” is about focusing on what is important and framing it in a context that will drive more frequent performance.
The Fogg Model of Behavior (FBM)  is a behavior model by Professor B. J. Fogg of Stanford University, an experimental psychologist. Shown here, The Fogg Behavioral Model can be used to demonstrate the strong parallels between incentive design and deploying game mechanics.
The parallels are important to understand. One formula used frequently in the incentive industry is Motivation X Ability = Performance. The connection between incentives and gamification can be seen in the Fogg Model of Behavior (FBM) and its three factors underlying any human behavior:
To drive a specific behavioral response, Motivation, Ability and Trigger must converge at the same time.
Ability can be time, attention, mental capacity, or any scarce resource needed to complete the behavior. Without these resources, the user will be unable to perform the behavior.
For the target behavior to occur, users usually require a minimum level of ability and motivation. This minimum level is called the activation threshold for the behavior.
Increasing Ability. There are two general approaches to increasing ability. The first is practice and training, where ability (along with the proper motivation) is built to exceed the activation threshold needed to perform the target behavior.
Simplifying. The second way to increase ability is to make the target behavior seem simpler so users require less ability to accomplish it – to lower the activation threshold of the target behavior.
Simplifying a gamified experience can be accomplished by:
· Splitting complex task into smaller sub-tasks
· Showing how simple it is to do the job
· Providing snippets of instructions on multi-stage tasks as they are completed.
Behavioral Triggers. Regardless of the amount of motivation and ability a player has, a trigger at the appropriate time is necessary to bring about a predictable behavior. A trigger is anything that tells the player to complete the target behavior right now. It can take any form as long as users are aware of the trigger and know what it means to activate it.
Employees bring both their rational and emotional selves to the workplace, and require the same core human drives to be engaged there as they do anywhere else — the drive for recognition and reward, for mastery and a sense of progress, for self-expression, for social connection, and for the ability to have some influence over their environment and destiny.
A large portion of today’s workforce is motivated by the same things. In fact, a 2009 Harvard Business Review  study on Gen Y and Baby Boomers found that both generations placed a premium on the same things:
· Work/life balance
· Opportunities to contribute and be altruistic
· Motivation beyond just a salary package.
Gamification can become an integral part of the work experience, because it can make work more engaging. With the greater engagement in work-related activities that gamification fosters, employees have an improved ability to:
Collaborate – employees working together on common challenges that require the participation of the entire team to complete.
Compete – individual and groups of employees tracking and attempting to “outscore” other employees or teams.
Demonstrate Mastery and Status – employees tracking progress toward hitting Key Performance Indicators (KPIs), learning new skills, or sharing their achievements with their peers.
In the following section, we discuss key game mechanics that serve as the basic building blocks for gamified work experiences.
These two terms are closely related and sometimes used interchangeably. For our purposes, game mechanics are the various actions, behaviors, and control mechanisms that are used to “gamify” an activity — the aspects that, taken together, create a compelling, engaging user experience. The compelling, motivational nature of this experience is, in turn, the result of desires and motivations we call game dynamics. (Bunchball) 
The figure below illustrates how Game Mechanics satisfy certain key human desires through techniques that are regularly applied in the gamified experience. Green dots signify the primary desire the game mechanic fulfills. Gray dots show the other human desires on which the game mechanic listed has an affect.
Following below is a discussion on the key gaming techniques used to meet several of these human desires and a more in-depth description of the three additional, primary mechanics that meet multiple desires.
Human Desire: Rewards
Like incentive and recognition programs, rewards are central to gamification. In a gamified experience, tangible or intangible rewards provided for recently completed actions or behaviors usually come through earning points, miles, etc., but also include Virtual Goods, Levels, Achievements, and Badges.
Human Desire: Status
Status is defined (Gamification.org) as the rank or level of a player. In a gaming environment, player status must be easily accessible and (as is often the case) publicly displayed. 
Human Desire: Achievements
In a game context, achievements are virtual or physical representations of having accomplished something and are similar to levels in that a milestone must be reached before the achievement designation is awarded. Gartner  cites two key parts to an achievement:
· The threshold that must be reached
· The marker of that achievement (often called a badge)
Achievements are sometimes configured as a longer-term objective where users must continue to perform an action, or progress through a difficult circumstance in order to reach the milestone. As Gartner states: “Once the achievement has been awarded, it’s common for the badge to be displayed within the gamification system for others to see and admire.” 
Publicly Shared Achievements promote group dynamics, provide a feeling of progression, and motivate users to reach to the top spot. But they can also be devalued over time if the milestones are too easy to reach, they don’t provide a desired reward, or if the desired action doesn’t match the achievement. (Gartner) 
Human Desire: Competition
As Gartner defines them, challenges or competitions in a game environment are “events or tasks users must complete to reach goals individually, as a group or in a head-to-head contest.” Key to the concept of challenges is that users must receive very specific goals and clear paths to the objectives. Completion of a challenge or competition is always followed by a badge or trophy. Challenges can be combined with concepts such as levels to help identify the progress a user has made.
Game Mechanic: Points and Virtual Goods
Points are a central building block of game dynamics, and are used to reward users for the completion of activities, or accomplishing certain behaviors, etc. Studies conducted by IBM Research and the University of Chicago describe the dramatic effect points can have on user behaviors, even when no monetary value is associated with them.
Point systems can be an especially valuable mechanic due to certain personalities’ needs to be rewarded, collect things, or check how we’re performing against others. Although points are proven to be motivating, most users understand them, and they’re highly flexible, they can also be tricky to implement. Sometimes users hoard them. To counter the hoarders, points often come with expiration dates, which can demotivate some users.
Bunchball offers the guideline that in order for a game economy to be effective over time, it needs to have a place to redeem points, incentives to earn more points, and the ability to customize something that reflects one’s personal identity. Virtual Goods can meet this need by offering intangible items such as food, clothing, etc., that can be purchased for use only in online communities. Sometimes these virtual goods are now being sold or traded for real dollars or goods. 
Game Mechanic: Levels
Levels are the point thresholds or milestones that a player must achieve in order to be granted access to additional functionality and content.
Classic examples of levels include frequent flyer status, grade levels, job codes, etc. Levels play an important part in the motivational nature of games by:
1. Ensuring that a user’s skill level closely matches the content and reward provided;
2. Conveying status to those who have demonstrated the skill or time commitment necessary to ‘level up’;
3. Indicating progress made and offering the motivation to reach higher levels.
Game Mechanic: Leaderboards
Leaderboards show users their scores and rankings relative to others. When displayed to a community, leaderboards drive healthy competition. Ranking criteria is usually points, but can also be achievements or levels. 
According to Bunchball’s experience, the benefits of employing leaderboards are extensive, as they build on our competitive spirit. 
Improve Frequency: Leaderboards have the effect of motivating users to come back so they can see how they are doing, prompting additional attempts to maintain or raise their position, outscore others – or even reach the top and be recognized for doing so.
Reinforce Behaviors: Leaderboards can motivate players to continue performing a certain behavior. Individuals who prefer to keep their performance levels private may or may not experience the same motivational effects.
As incentives and reward programs consistently seek tools and techniques to help achieve maximum performance, game mechanics becomes a natural evolution, working to:
· Increase focus
· Provide timely feedback
· Reinforce behavior
· Recognize incremental achievements
· Reward results
· Generate improved performance
Just as important as an understanding of the distinctions between game mechanics and game dynamics, is an understanding of the personality of the gamer. Richard A Bartle (Ph.D. Artificial intelligence, University of Essex) identifies at least four types of gaming personalities that respond differently to various gaming dynamics. The definitions below come from the Wikipedia reference: Bartle Test of Gamer Psychology. 
Achievers prefer to gain “points,” levels, equipment and other concrete measurements of succeeding in a game. They will go to great lengths to achieve rewards that confer them little or no gameplay benefit simply for the prestige of having it.
Explorers like to dig around and prefer discovering areas, creating maps and learning about hidden places. They often feel restricted when a game expects them to move on within a certain time, because it keeps them from looking around at their own pace.
Socializers enjoy the social aspects, rather than the actual game itself and most enjoy interacting with other players.
Killers thrive on competition and prefer gaming dynamics that occur faster than those for socializers. Just as game designers take each of these personalities into consideration when they are layering various game mechanics, so should recognition and reward program designers as well.
Game mechanics offer incentive program designers a variety of additional features that can be used to support and extend common incentive program features. Examples include the following:
Progression: A dynamic in which success is granularly displayed and measured through the process of completing itemized tasks. Example: Progress Bars.
Appointment Dynamic: A dynamic in which to succeed, one must return at a predefined time to take some action. Example: Farmville includes the feature where if you return at a set time to do something, you get something good; don’t return on time and something “bad” happens.
Reward Schedules: The dynamic wherein a timeframe and delivery mechanisms work together to deliver rewards (points, prizes, level ups). Three main parts exist in a reward schedule: Contingency, Response and Reinforcer. As described at gamification.org, Fixed Interval or Ratio Reward Schedules  provide a reward after a fixed amount of time (interval) or a fixed number of actions (ratio). Example: Destroy a certain number of monsters and receive an award or play for a certain number of hours and ‘level up’.
Team/Clan: The ability to play as a group, pooling resources, working together to solve problems and overcome challenges. Example: Online gaming platforms that allow you to team with friends across the country and play at the same time.
Free Lunch: A player is rewarded (potentially randomly) by someone else having done the work.
Epic Meaning: Players will be highly motivated if they believe they are working to achieve something great, something awe-inspiring, and something bigger than themselves.
Large Fortune 500 Business Services Company
A Fortune 500 Business Services Company wanted its channel partners to participate in its loyalty program, and to educate them on its recently redesigned website. Channel partners had been confused and dissatisfied with the new website, resulting in fewer sales claims being made through the site.
The company used gamification to educate the partners and give them a fun, engaging reason to navigate through the website. Channel partners received rewards for exploring product-related information and earned “badges” during their journey, and unlocked tidbits of “virtual content” throughout the site.
The behavior of “badges” was dynamic, consisting of configurable artifacts that represented accomplishments. Channel partners ultimately used these badges to track their progress – like breadcrumbs, so to speak.
Results: Site visits tripled and were three minutes longer than before gaming dynamics were integrated. Most importantly, the number of return visits increased by nearly 1,000 and sales claims doubled. (Maritz/Bunchball)
20,000 Agent Virtual Call Center
LiveOps, Inc. of Santa Clara, CA, runs a virtual call center consisting of 20,000 independent contractors located throughout the U.S. Agents are measured on the basis of call times and sales closings, with a historical onboarding time of approximately 4-weeks.
In 2011, the company began awarding “virtual badges” and points to agents for keeping calls brief, learning and closing sales. They also used game dynamics to create a social experience within their website and implemented leaderboards so that agents could compare their achievements to others.
Results: Following implementation, 80% of the company’s agents opted into a “gamified experience” within the first week, and onboarding time was reduced from 4 weeks to 14 hours. Trained agents outperformed peers by 23% in call handling time and +9% in customer satisfaction.
Since the gamification system was implemented, some agents have reduced call time by 15%, and sales have improved by between 8% and 12% among certain sales agents. 
Drive Learning at a Major N. American Auto Brand
A major auto manufacturer wanted to improve onboarding and training for salespeople at its Canadian dealerships. Sales reps needed to learn all the details about various new models, but their participation in training had been low.
To increase participation and invigorate the training, new model vehicle training was “gamified” with outstanding results.
Results: There was a 400% increase in visits to the site, employees came back repeatedly, and overall participation in the program compared to the prior year increased significantly. In fact, for four months (January-April) site usage increases over the previous year were 174%, 309%, 383% and 416% respectively. In April, 10% more sales reps were certified by the deadline than had in the previous year. (Maritz/Buncbhall)
“Gamifying Inter-Company Employee Recognition Activities
Maritz, a large incentive house, wanted to focus employees on effective recognition practices, emphasizing the company’s core values. In short, it made recognition part of their employees’ every day work experiences by awarding points for going “above and beyond.”
Employees could redeem their points for merchandise and other experiential rewards. Based on research attesting to their employees’ appreciation for the power of effective recognition and rewards, the company increased its budget to offer more opportunities to earn.
To maximize employee contact with its website, the company “gamified” it and established rewards for:
· Recognizing each other for a job well done
· Learning about the new recognition program
· Learning how to use the new website and its many new features
· Viewing photos from recent recognition events
· Reviewing new reward offerings
· Updating personal profiles
· Adding friends to their network
· Viewing their friends’ recent recognitions
· Congratulating others using the website or in real life
· Learning about recognition best practices
· Sharing their recognitions to social networks (FB, Twitter, LinkedIn)
The company leveraged the following game mechanics from the Nitro platform, a popular online (and mobile) gaming application:
· News feed
· Trophy case
· Progress bars
Maximizing Engagement And Manage the Involvement Of Thousands Of Conference Attendees
Dell World Conference  was the first ever customer event held by Dell Computers, with thousands of people attending. Dell wanted to ensure attendees would download specific content at the event related to five separate conference tracks, spread the word among each other, and to network with one another.
To meet these objectives, Dell partnered with gamification expert BigDoor  on applying various gaming mechanics. These included a Dell World Mobile App featuring a designated journey through the different conference tracks.
Hundreds of QR Codes allowed participants to check in to booths, education sessions, exhibits, and event food stations. Participants were rewarded for scanning individual codes and completing their journeys. Badges, leaderboards, and progress bars were extensively used as gaming techniques during the experience.
Results: Dell’s rewards were measurable. On top of creating an engaging experience, the company received extensive real-time information about specific content, visuals, and even food types that were most popular. This allowed the company to adjust on the fly.
Since the public release of Dell’s experience, several organizations now create plug and play mobile apps, and have different types of apps, depending on whether one is looking to drive foot traffic to booths or wanting to help attendees absorb meeting content.
Clearly, Game Mechanics are impacting the effectiveness of incentive and recognition programs and are here to stay. What’s important to appreciate is that the incentive industry is best positioned to take advantage of game mechanics and move the application of these mechanics to the next level.
The basic principles are fundamental to motivation of human behavior regardless of whether the focus is gamification or incentives. How these principles are applied and facilitated by technology continues to evolve; yet the human behavioral fundamentals remain the same. Because incentive and recognition programs share these base fundamentals with game dynamics, program designers are well-positioned to understand and implement game mechanics faster and more effectively than other industries.
Each implementation of game mechanics to a reward and recognition program brings with it a better understanding of how the two concepts interact. The collective learnings from these implementations will ultimately help program owners optimize the use of gamification in reward and recognition programs globally. For example, a sample of what program owners learned from the implementation in case study 4 is listed in the following.
· When setting up programs having a limited-time component, be aware of current user behavior patterns. Making a time limit too short or making a reward too scarce is de-motivating.
· Filtered news feeds and leaderboards on friend activity and department activity make the experience personally relevant.
· Notifications work as a call to action better than marketing messages.
· Develop easy challenges initially, and then make them progressively more difficult.
· When incorporating social media into a recognition program, understand what motivates people to share things to their external networks
· In a consumer program, users are likely to hit the “share” button to recruit others. In a recognition program, users are likely to hit the “share” button to define themselves to others. This is an important difference for marketers to understand. In a recognition program, the “share” button appeals to one’s motivation to connect with others, rather than the brand.
· Expect spikes in usage on days that an email drops.
· List employees who earned recognition during a particular week by citing them in emails. Publishing the names of people who earned badges, points, and higher status levels increases engagement because their drive to compete is activated by doing so.
Gamification is not about turning boring tasks into a game. In fact, simply putting a game on top of a boring task is generally a very bad way to do gamification.
An example, provided by Dr. Michael Wu is a sales organization that created a golf game to assign leads. The effort backfired because it took sales managers longer to play the game than it did to simply assign a lead.
Gamification represents a revolutionary way of tapping the human psyche to create a more engaging experience for the individual and improved performance for the organization.
· Understand that gamification is more than simply adding a game to a website. Such an approach most often will backfire.
· Think about new tools such as mobile apps that will be used to facilitate game interactions moving forward
· New models will be employed. Pay particular attention to the Fogg Behavioral Model and models that address the different gamer personalities
· You can expect a new language entering our domain – new ways to better describe what and how we create incentives
· Expect more and more integration using internal and external social media. Internal brand engagement will drive greater organizational citizenship and performance
1. BlessingWhite Employee Engagement Report 2011. http://www.blessingwhite.com/content/reports/blessingwhite_2011_ee_report.pdf
2. Gartner. Gartner Gamification Report 2011. http://gamification.org/wiki/Gartner_Gamification_Report_2011
3. Deloitte. Gamification Gets Serious. http://www.deloitte.com/view/en_US/us/Services/consulting/technology-consulting/49ec911905f25310VgnVCM3000001c56f00aRCRD.html
4. Entertainment Software Association. Game Player Data. http://www.theesa.com/facts/gameplayer.asp
5. Fogg Behavioral Model. BJ Fogg’s Behavior Model, Stanford University. http://www.behaviormodel.org/
6. Bunchball. Gamification 101: An Introduction to the Use of Game Mechanics To Influence Behavior. (October 2010) http://www.bunchball.com/
7. Miami Herald. Making online sites playful can attract more customers. (Studies cited by IBM Research and the University of Chicago). Tasha Cunningham. http://www.miamiherald.com/2012/08/19/2958747/making-online-sites-playful-can.html
Gamification 101: An Introduction to the Use of Game Mechanics To Influence Behavior. Bunchball. October 2010. http://www.bunchball.com/
8. Bunchball. Gamification 101: An Introduction to the Use of Game Mechanics To Influence Behavior. (October 2010) Bunchball. http://www.bunchball.com/
9. Gamification.org. Game Mechanics. http://gamification.org/wiki/Game_Mechanics
10. Gartner. Gartner Gamification Report 2011. http://gamification.org/wiki/Gartner_Gamification_Report_2011 http://www.gartner.com/it/page.jsp?id=1629214
11. IBM Research and the University of Chicago Study as reported in the Miami Herald. Making online sites playful can attract more customers. (Tasha Cunningham). http://www.miamiherald.com/2012/08/19/2958747/making-online-sites-playful-can.html
12. Bunchball. Gamification 101: An Introduction to the Use of Game Mechanics To Influence Behavior. (October 2010) Bunchball. http://www.bunchball.com/
13. Richard A Bartle. The Bartle Test of Gamer Psychology. http://gamification.org/wiki/Personality_Types#The_Bartle_Test_of_Gamer_Psychology.
Dr. Bartle’s website is http://mud.co.uk/richard/
14. Farmville. Everything Grows Your Way. http://company.zynga.com/games/farmville.
15. Bunchball. Gamification 101: An Introduction to the Use of Game Mechanics To Influence Behavior. (October 2010) Bunchball. http://www.bunchball.com/
16. FourSquare. http://en.wikipedia.org/wiki/Foursquare.
17. Wall Street Journal, October 2011, Latest Game Theory: Mixing Work and Play. http://online.wsj.com/article/SB10001424052970204294504576615371783795248.html
Information Source: Sanjay Mathur, SVP of Product Management. http://www.liveops.com/
18. Dell World Conference. http://content.dell.com/us/en/corp/d/corp-comm/pk-dellworld-2011.
19. Big Door. http://www.bigdoor.com/
20. Maritz www.maritz.com
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