The Incentive Research Foundation, a St. Louis–based not-for-profit organization that funds research into the incentive industry, has identified 11 trends it expects to unfold this year in the performance industry. Culling information from its own studies, research conducted with Corporate Meetings & Incentives and other organizations, and interviews with industry experts, the IRF sees changes ahead influenced by technology, government, the economy, and changing priorities.

1. Cautious optimism. Forty percent of participants in roundtable discussions at the IRF’s 2010 Invitational event said that the improving economy has had a “slightly positive impact on their ability to plan and implement noncash incentive (travel/merchandise) programs.” However, IRF researchers report a frail recovery that could easily be stalled.

2. Adapting to the new normal. Rather than waiting for business to return to where it was before the recession, companies are adapting their incentive programs to fit new budgetary constraints.

3. Global opportunities. Outside the U.S., interest in incentive programs is growing rapidly. One example from the IRF research: The number of Google searches on “employee engagement” in January 2011 was 10 times higher in India than in the U.S.

4. Government sway. The influence of government in the incentive industry appears to be on the rise, evidenced on the positive side by the focus on wellness incentives in recent healthcare legislation and on the negative side by efforts to control spending on noneducational promotional items in some government programs.

5. Question the luxe. Americans are becoming “more sensitive to—and wary of—extravagance” and, as a result, incentive programs need to be reevaluated “through a ‘necessity’ lens.”

6. Experiences wanted. Consumers’ preference for personal experiences (over new products) is growing. Motivational programs, including merchandise incentives, need to reflect this trend.

7. Praise matters. Nonfinancial motivators, such as praise and leadership opportunities, have been shown to be as effective as monetary rewards. The economic slump offers company executives an opportunity to test those tactics.

8. New social priorities. Health and sustainability have become increasingly important to Americans and should be reflected in incentive program choices.

9. Social media. Integrating a cohesive social-media strategy into incentive programs will be critical to success in the future.

10. Virtual elements. With the growth of all things virtual, from jobs to meetings, virtual products and solutions will become increasingly important to incentive programs.

11. “Gamification.” Computer games are a growing cultural trend, and the point structure they use is being adapted quickly into successful performance programs.