Frequently Asked Questions (FAQs)
Please review the list below to find potential answers to your questions.
If you need further assistance or are seeking more specific answers please contact one of our sale representatives at:

Phone: 888-686-8116 or Email:

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    Why should I implement an incentives program?

    Why should I implement an incentives program? It’s well known that most businesses offer their employees competitive salaries and benefits. In return, the majority of these employees work hard and make a effort to do a good job to justify their compensation package. But in our highly competitive world, a good job is not necessarily enough, particularly when industry leaders are using every means available to motivate an extra level of performance from their people.

    Today, industry leaders are using incentives as part of their company’s marketing mix to help accomplish a wide variety of business objectives. They have found that these programs are more likely to accomplish the objectives set for them when employees are motivated by positive, and immediate rewards. And, key to the bottom line, they’ve discovered that these programs – when properly designed and executed – pay dividends in added sales and profits and create stronger employees.

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    How do I develop an Incentive Program?

    Establish Objectives
    Identify what goal/objective needs to be accomplished, for example: improved attendance, increased sales of a particular product, etc. The objectives must be simple, specific, and obtainable. Begin with a clear, briefly stated objective and communicate it to all participants.

    Outline the Strategy
    Build the foundation of the Incentive Program carefully, expanding on the methodology to be used. The structure of the program should detail exactly who is the target audience, and anyone else who will be influenced by the program. The size of the group is important to the budget of the program, as well as the ability to communicate clearly and measure the results accurately.

    Other considerations are geographic boundaries or sales regions, legal considerations, family issues, the length of the program and timing, individual goals or team goals, and of course, the reward.

    Measure Performance
    Define both quantifiable and qualitative goals that can be measured, and keep it simple. It might be necessary to look at historical data and come up with an average in order to define a particular sales goal. The? goal needs to be fair to all involved, and obtainable by everyone.

    Establish the Budget
    Depending on whether the program involves sales or non-sales personnel, the budgeting will be different. In general, the three elements of budgeting include:

    • number of participants
    • length of program
    • expected results

    There are two types of award budgets:

    1. closed-ended
    2. open-ended.

    You would need to determine the maximum costs involved with a closed-ended program, and an estimate of costs involved for an open-ended program.

    In a sales program, the primary rules are:

    A) Anywhere from 5% to 10% of additional (incremental) gross sales during the incentive period can be applied to the total cost of the program, and

    B) The cost of the incentive awards should equal 5% of all compensation for the program period.

    In a non-sales program, it is more difficult to put a monetary figure on the value of “improvement,” but some measures are possible that involve increased productivity, improved attendance, and improved safety (fewer traffic tickets, for instance). The budget is then determined by the “value” the company will realize from the improvements made by the Incentive Program.

    Budget Elements
    Awards 80%*
    Commuication/Promotion 10%**
    Administration 5%**
    Training/Research 5%**
    * For merchandise awards, this includes shipping (about 10% of the cost of the items) and taxes (about 6% of cost).
    **The last 3 categories are fixed costs comprising 10-20% of incentive program costs.

    Select the Perfect Award
    It is important to select the correct award because if the individual is not emotionally vested in obtaining the incentive award, he or she will not pursue the goal. Spend some time speaking with the target group and select an award within the framework of the budget that will be important to the group.

    Administer the Program
    Administration is approximately 20% of the program budget, and a good 50% of the planner’s time. The target group needs clear, consistent communication and timely feedback on measurement of their performance.

    Celebrate the Success of the Program
    The end of the program should be celebrated with the target group and performance measurement by individual or team should be provided at this point. Individuals should then receive their awards.

    Analyze the Success of the Program
    Did the Incentive Program achieve its objectives? Were the participants motivated to change their behavior? Remember, an Incentive Program provides a short-term gain, and follow-up programs are important. Start planning the next one today.

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    Why are rewards and recognition so important?

    Recognizing and rewarding employee contributions and accomplishments are an important part of creating a quality culture. When employees know that their efforts are appreciated, it increases their self-esteem and satisfaction with their job. Their improved attitude toward their job encourages them to aim for quality and increases productivity. Not all employees or organizations will respond to the same type of recognition. Some employees, for example, will respond primarily to rewards that have substantial value, such as a percentage of the cost savings from a suggestion. For many employees, the value of a reward is not as important as the fact that they know that their contributions are valued.

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    Why not just give cash as an award?

    Incentive industry experts have compiled years of data that consistently shows evidence that cash awards are not as effective as non-cash awards (merchandise/travel awards).

    Cash simply disappears into a participant’s wallet to be used for basic expenses; non-cash awards leave a memorable and tangible reminder of an individual’s achievement and the company that helped make it possible.

    In one industry case study, participants were divided into two groups – one motivated by cash and the other motivated by merchandise and travel. Results showed that participants in the latter group produced results that were almost 50% greater than those motivated by just cash.



Take The Headache Out Of Employee Recognition Programs