Why Choose Incentive Travel?

Travel Rewards: The Most Effective Incentive of All

Showing your appreciation to employees is crucial to your organization’s future growth, but what is the best incentive to offer? Recent studies show that although employees may say they want a cash incentive, many times they will work harder for a reward trip.

Bishop-McCann Hot Air Balloon

Why You Should Have an Incentive Program

“Incentives, Motivation and Workplace Performance: Research & Best Practices,” a study conducted by the International Society of Performance Improvement and funded with a grant by the SITE Foundation, was designed to analyze the scientific research on incentive programs. Their findings returned surprising evidence about the effectiveness of incentive programs and the elements behind success.

Key Findings

  • Incentive programs improve performance. If selected, implemented, and monitored correctly, incentive programs increase performance by an average of 22%. Team incentives can increase performance by as much as 44%.
  • Incentive programs engage participants. The research found that incentive programs can increase interest in work. When incentive programs are first offered for completing a task, a 15% increase in performance occurs. Asked to achieve a goal, people increase their performance by 27%. When incentive programs are used to encourage “thinking smarter,” performance increases by 26%.
  • Incentive programs attract quality employees. Organizations that offer properly structured incentive programs can attract and retain higher quality workers than other organizations.
  • Longer-term programs outperform short-term programs. The study found that incentive programs that run for a year or more produced a performance increase of 44% while programs running six months or less showed a 30% increase.
  • Both employees and managers say they highly value incentive programs. Nonetheless, 98% of the survey participants complained about their implementation. A program’s success and return on investment depends on how well it’s operated.
  • Quota-based incentive measures work best. Programs that reward performance based on meeting or exceeding goals generate the most positive results. Least effective are tournament-based programs; i.e., closed-ended programs that reward a pre-selected number of winners, as opposed to open-ended programs that give everybody a chance at success.

Why You Should Offer Incentive Travel Rewards

A tangible, non-cash reward is the most effective way to encourage employees to do the best job they can do.

According to Business Insider, recent studies show that employees respond better to non-cash rewards and other incentives rather than cash rewards. It is, however, a fine line. According to the Journal of Economic Psychology, employees do choose cash over non-cash rewards when given the choice in the abstract. But they change their minds when presented with a specific non-cash reward.

Psychological research points out that employees become happier when their good performance is seen by their peers. Cash is never the best reward in this situation because people don’t like to disclose the amount of money they received. However, it’s the exact opposite when it comes to receiving a trip. The employee is excited to share the details and is given an indirect way to talk about their achievements.

Travel, it turns out, may be the most effective incentive of all. According to a study by Site International Foundation and the Incentive Travel Council, 96% of employees say they are motivated by travel incentives, and 72% who earn the reward say they feel increased loyalty to the company.

President’s Club evening dinner

The Psychology of Non-Cash Awards

The first of the six reasons for the success of these tangible awards is mental accounting—the fact that getting something like a gift card, a luxury item, or a trip to someplace special is more memorable than cash. Most people will do something responsible with cash, like pay a credit card or buy groceries, and they won’t remember what they did with the cash award three months later. A tangible award, like an experience, remains with them for a long time.

The second reason is seeking status. It is a well-proven fact that many people will choose to be recognized—such as by a president’s club trip somewhere fun—instead of choosing cash. One study showed that salespeople would choose to book sales into a quarter when they can earn entry into a president’s club rather than pushing those sales to the next quarter where they could earn higher commissions. On average, salespeople were willing to forego about 5% of their take-home pay to go on the award trip.

Other reasons tangible, non-cash awards work better than cash include:

  • Appreciation versus entitlement: the fact that once given cash, many people come to see it as part of their salary rather than an award and feel punished if they don’t win.
  • Effort justification: this shows that people will put a higher monetary value on tangible rewards they have earned.
  • Social signaling: this is the bragging rights that come with an award. People will talk about winning a new TV or a trip, but almost no one will discuss a cash bonus.
  • Perseverance, effort, and performance: tangible awards lead people to work harder to win a potential award to which they have formed an emotional attachment.

Incentive Travel Rewards Increase Sales and Profitability

The Society for Incentive Travel Excellence (SITE), Incentive Research Foundation (IRF), and Financial and Insurance Conference Professionals (FICP) released a joint study and survey of the global incentive travel industry and came away with these conclusions:

  • Increased sales and profitability are still the top reasons companies continue to offer incentive travel rewards.
  • “Better relationship-building between employees and management” and building on workplace culture was the second most important reason for offering incentive travel rewards.
  • “Improved employee engagement and morale” and “better relationship-building between employees” were additional objectives.
  • When asked about “inclusions” in incentive travel programs, incorporating wellness was at the top. This is a current trend in incentive travel, so it’s no surprise that 86% of buyers highlighted yoga classes, golf, and spa services as an inclusion in their incentive travel program.

The Results of Offering Incentive Travel Rewards

The key question to ask is what is the intent of your incentive program? Is it to encourage the best job performance from your employees? Is it to encourage commitment to the organization and increase engagement? If so, then as studies show, the travel reward is the best incentive.

President’s Club reception

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Footnotes:
Harold Stolvich, Ph.D., “Incentives, Motivations, and Workplace Performance Research and Best Practices,” (January 20, 2010) http://theirf.org/research/incentives-motivation-and-workplace-performance-research-and-best-practices/147/
Leo Jakobson, “Why to Use Non-Cash Rewards by Leo Jakobson,” (April 25, 2018)
http://www.incentivemag.com/Strategy/Management/IRF-Study-Award-Program-Value—Evidence-ROI-Incentive/
The Build Network, “Here’s Why Paid Vacation Motivates Employees Better than Cash,” (November 15, 2013)
https://www.businessinsider.com/paid-vacation-motivates-better-than-cash-2013-11
The Incentive Research Foundation, “Incentive Travel Industry Index powered by SITE Index, IRF Outlook and FICP Study,”
(October 15, 2018)
http://theirf.org/research/incentive-travel-industry-index-powered-by-site-index-irf-outlook-and-ficp-released/2578/
The Site Foundation and Dr. S. Jeffrey, “Cash vs. Non-Cash Incentives: Why Use Non-Cash?”
https://www.siteglobal.com/p/cm/ld/fid=1