THE USE OF INCENTIVE programs across all levels of companies is on the rise, according to proprietary research by Promo magazine, sister publication of Financial & Insurance Meetings. Forty nine percent of the respondents in Promo's recently released Premium & Incentives Study said they used incentive programs in 2005 — up from 36.5 percent in 2004 — and 40 percent said they plan to increase their use of incentives in 2006. According to Patricia Odell, managing editor of Promo, “There is a tremendous amount of energy and excitement in the premium and incentive industry right now. Reputable research has proven a direct link between employee satisfaction and the health of a company's bottom line, and spending for both employee and consumer incentives was projected to reach $28 billion in 2005.”

What kinds of incentives are the most effective motivators? Preliminary findings of research conducted by the Forum for People Performance Management and Measurement at Northwestern University, and released at the Motivation Show held September 27 to 30 in Chicago, found that noncash-awards programs work better than cash to reinforce organizational values and cultures, improve teamwork, increase customer satisfaction, and encourage specific work behaviors. The survey also ranked the use of various motivational tools, such as special events (82.7 percent), gift certificates (74.1 percent), and training (55.6 percent).

Corporate Incentives 2005

In another hot-off-the-press incentive trends survey, conducted by our sister publication Corporate Meetings & Incentives in November, respondents — 100 percent of whom work in a corporation and have responsibility for incentives — said their per-qualifier spending in 2005 was $3,136, up from $2,651 in 2004. Forty-eight percent of respondents expect that their group travel incentive budgets will increase or stay the same in 2006.

Group travel was the preferred noncash reward for CMI survey respondents who offer sales incentives. Sixty one percent offered group travel programs as sales incentive rewards, 41 percent offered merchandise as sales incentive rewards, and 33 percent offered individual travel as sales incentive rewards.