A Strong Incentive
Author: Steve Bjerklie
August 2006
Brand News
Incentive meetings are becoming big business for meeting professionals.
But creating an effective incentive meeting means addressing particular challenges and needs.
Meeting professionals can be forgiven for thinking that the opportunity to attend a well-organized meeting in a handsome hotel or lovely resort location ought to be incentive enough for meeting attendees. But incentive-based meetings—what meetings companies and organizations use to reward employee achievement, effort and contribution—have developed into a dynamic, growing segment of the meeting industry, and that means dynamic, growing opportunity for meeting professionals. A good incentive meeting not only motivates employees and improves productivity and morale, it can be the most-anticipated professional event of the year for employees. It can inspire hopes and dreams; it can honor or even cap a career. For these reasons, the key for meeting professionals to make the most of the opportunity the incentive-meeting market offers is to understand how incentive meetings differ from other kinds of meetings. The two essential questions to consider are: What kinds of expectations do attendees bring to incentive meetings? And what expectations does a client company or organization have for its incentive meeting? In short: what works, what doesn’t and why.
But, first, do incentive programs and meetings actually work? “Absolutely,” says Bill Boyd, president and CEO of Sunbelt Motivation and Travel in Irving, Texas. “Do they motivate, inspire and reward? They do all three of those and more. They promote loyalty and a feeling of belonging to something.”
The results can be amazing, profitable—even powerful. A 2004 study by the Society of Incentive and Travel Executives (SITE) found that incentive programs at companies can boost employee performance anywhere from 25–44 percent. “There are many, many benefits to companies from incentive programs—increased sales, increased profits, increased loyalty, improved stockholder value, improved morale—and these are but a few,” says Boyd.
He additionally notes that while rewarding sales achievements is a fairly typical reason for a company to host an incentive meeting, he’s seen incentive meetings for employees who succeeded in achieving an operational goal, who improved teamwork or who successfully transitioned their department functions in a merger.
Sean Mahoney, vice president for worldwide charter and incentive sales at Silversea Cruises in Fort Lauderdale, points out that “some companies utilize incentive travel programs simply to reward top achievers, with no official contest. Others utilize incentive travel as a management tool to accomplish specific business results. A majority of programs are designed to promote sales-related initiatives, but the use of non-sales-related incentive programs is growing.”
Silversea has hosted dozens of incentive meetings on its cruise ships. “We’ve had incentive meetings that rewarded improved service or a reduction in turnover or that promoted safety,” says Mahoney, adding: “Well-designed incentive programs are self-liquidating. They pay for themselves. For example, a program designed to improve workplace safety will typically result in savings that exceed the cost of the incentive reward.”
Trophy value
A good incentive meeting, Mahoney sagely comments, carries “trophy value.” “Employees go home and are excited to talk about the meeting with their families and friends and back at the office. A really good incentive meeting creates lifetime memories.”
Too often, the Silversea executive points out, companies will reward employees with a cash bonus, “but bonuses get confused with compensation. People don’t talk about all the fun they’ve had with a $15,000 bonus. But they will talk about and never forget a good incentive meeting.”
An effective, memorable incentive meeting “creates an impossible-to-replicate experience,” Mahoney notes. “That’s why simply rewarding employees with the incentive of a round of golf at a fancy or name-brand course at a meeting isn’t really effective. Employees know they can buy that experience for themselves. But if it’s something truly unique, they’ll never forget it. Not only that, but the meeting will also build goodwill and morale and strengthen partnerships among employees.”
In addition to rewarding employee effort and/or accomplishment, companies use incentive meetings for reasons common to other meetings: to inform, educate and motivate staff; to update employees on new developments in their field or industry; and to create a sense of team or community. The challenges for meeting professionals, agree experts, is planning an appropriately located incentive meeting for excited, motivated attendees that balances work with play.
Doing your homework
“Customizing the incentive trip and meeting to your participant base isn’t as ‘one-size-fits-all’ as it used to be,” observes Lynn Stadler, a strategic meetings consultant at Maritz Incentives, St. Louis. “Diversity in the workforce, including in the sales organization, means that a golf-oriented meeting might not be the most motivating for your sales program. Conducting surveys that gather voice-of-the-participant input for use in the program-design process are more critical than ever.”
She continues: “For example, with one of our telecommunications clients, we found that their sales organization would trade almost anything—a shorter trip, fewer activities included, a less luxurious hotel venue—if only the company took them to a beach location. The client had never realized that “golf” wasn’t always the answer. In fact, our broad market research on this exact topic revealed that golf falls much lower on the desirability scale than most executives realize. Just because the execs love their golf, that doesn’t mean their salespeople would work harder to earn a golf trip. They might just want to relax in the sun on a beach.”
Stadler says the 2004 SITE study found that a good incentive program, with an incentive meeting as the reward, engages its participants; it’s not just a carrot. According to the study, when incentive programs are first offered for successfully completing a task, performance improves 15 percent. When an incentive program is designed to encourage participants to “think smarter,” performance improves 26 percent. “Incentive programs attract and help retain quality employees,” she adds.
“Amazingly enough, many planners do not take the critical step of surveying clients in advance of designing the trip and meeting,” she hastens to point out. “They tend to gather post-event ‘how’d you like the trip?’ information and may use that for planning the next year’s trip and meeting. The issue there is that you’re only talking to the people who seem to be the same year after year. If you’re taking a more predictive look at the design process, you can increase how appealing the trip and meeting are to people beyond the same top performers who go every year.”
Sunbelt Motivation’s Bill Boyd adds that the way to find the right balance between work and play for an incentive meeting is to know demographics of the company or organization. He says surveying clients or employees while the trip and meeting are still in the planning stage is the ideal approach, “but, sadly, it doesn’t happen much, to be honest. The usual method is to send out evaluations after a program is over and those evaluations are read, but little is done to alter future programs to reflect the views on the evaluations,” he says, echoing Stadler’s comment.
Another consideration, she notes, “is paying attention to a desire (or lack of desire) to share executive face-time. Some people prefer to use their incentive trip and meeting to let their hair down and relax. They can’t do that if they feel their senior executives are keeping an eye on them too closely. Other employees jump at the chance to have more personal opportunity to show senior execs who they are outside of the work environment.”
She adds that planners often overlook how employees feel about awards ceremonies, which are nearly always the culmination of an incentive meeting. It’s easy to assume everyone wants their moment in the spotlight, but it’s not always true.
“In the same way that some people want the chance to shine in
front of execs and others don’t, some award-winners are more introverted and they prefer recognition that’s outside of the bright spotlight on a stage,” she comments. A thorough meeting professional will know and accommodate the on-stage wishes of award-winners,
even if it means explaining and defending an employee’s potential
reticence to a top executive.
Flipping on the switch
According to Maritz’s Stadler, creating and implementing an effective incentive program and meeting is a skill, and really understanding the program’s and the meeting’s participants is the critical first step for a meeting professional. “Starting with a clear understanding of what’s going to flip the “on” switch in your particular participant base is the first and most important aspect. Planning for what your executive leadership wants and likes will keep them happy, but if you’re looking for a return to your organization or client on the cost, then designing a program that makes the employees really happy is the key.”
Since an incentive meeting is supposed to both reward and motivate, being sensitive to needs, personalities and culture is key. She says
a common mistake incentive-program and incentive-meeting planners often make is “not providing an incentive trip that your participants would work harder to earn.” A trip to and meeting at Disneyland may be a terrific motivator at a company where many or most employees have families with young children, but it may be a complete dud for, say, an outdoor-product company, where employees like to go white-water-rafting or helicopter skiing or climbing in Yosemite.
“Study the culture of the company or organization, study the objectives, study the design of the performance improvement,” advises Bill Boyd, “and establish a program or meeting that best reflects these elements—all within budget, of course!”
Striking the Balance
Stadler says a common mistake that meeting professionals inexperienced with incentive meetings often make is not building a proper balance between recreational and other “reward” activities and a meeting’s educational components. “There is absolutely a balance that must be struck between the amount of educational content and the level of activity,” she stresses. “If your participants have earned the right to go on an incentive trip, they may be using it as their annual vacation. If there’s too much education and not enough recreation, they feel punished instead of rewarded.
“The other side of that coin is that if it’s a business-related trip, most employees expect to come back having picked up a tip or two that makes them more successful in their day-to-day jobs, usually so they can earn the next year’s incentive trip!”
Mahoney says that if a client on one of Silversea’s cruise ships is planning a meeting with a lot of educational or workshop content, he recommends that those parts of the meeting occur while the ship is a full day at sea or isn’t arriving in port until late. “It’s important to compare business content to itinerary,” he says.
Assessing success
It’s key, say these experts, for a planner to understand that a client company or organization will assess the success or failure of an incentive program and meeting in terms of return-on-investment. A company already knows it can motivate its employees by giving everyone a new Ferrari, but it’s not a cost-effective strategy. An incentive program and meeting can’t be all bang; the expenditure of the buck must make sense. It also makes great sense for meeting professionals to create the ROI measurements for themselves.
“The ROI of an incentive program and meeting is absolutely measurable for any company,” says Lynn Stadler. “There are many different ways that we can look at providing that measurement to an organization, including buzz, cost-analysis and absolute value.
“We have a lot of experience helping companies measure program return. One of the most common questions is, ‘How much of the result came from the incentive program?’ When developing a measurement system for your incentive program, it’s important to collect additional data to better measure the value from the program. One reasonable way to approach this without additional information is to work with your executive management to establish a reasonable range of percent attributed to the program. Get some agreement up front and make them put the stake in the ground. This would be what we’d call an assumptive approach.”
A SITE white paper prepared on incentive-program ROI that was prepared from a survey of SITE corporate members points out that, surprisingly, “very few companies are currently measuring the return on investment achieved through their incentive travel (and meeting) programs”—a huge opportunity, then, for meeting professionals to perform a valuable and valued extra service for a client. “Instead, they measure targets such as sales, revenue and market share. If those are achieved or surpassed, the performance is attributed to the incentive program.
“Corporate respondents rate the effectiveness of incentive programs higher than do
winners,” the paper continues. “To determine effectiveness, they look at bottom-line and motivational attributes such as sales and
revenue increases, bolstering the company’s reputation and identifying top performers.
At the same time, corporate respondents
also recognize softer, intangible objectives,
such as creating excitement to keep salespeople motivated and providing networking opportunities. They recognize that such soft returns
are just as important as hard returns for
incentive programs.”
The thrill is gone
It’s natural for a meeting professional to
try the same thing again if an incentive meeting proves successful for attendees and
client alike. Because incentive meetings by definition are designed to motivate and inspire—to engage the imagination and emotions, in other words—freshness is important. How can a planner know when an incentive concept has become tired? “When the company or organization is no longer seeing the performance bumps from the program, it’s time to refresh,” advises Lynn Stadler. “That could mean refreshing the rules structure or the reward itself. This is why ongoing evaluation and measurement diagnostics are so important: to provide that window into the point in time where an intervention or change is required.”
Sunbelt’s Bill Boyd puts it plainly: “When the evaluations reflect boredom, it’s time to change—it’s past the time, actually.”
All the experts interviewed for this article recommend that meeting professionals pay as close attention as possible to the actual experience attendees are having at an incentive meeting—not just survey attendees formally in writing, but listen to conversations, ask for blunt criticism, and request suggestions for improvement or change.
Paraphrasing Branch Rickey’s advice about when to let a baseball player go, it’s better to retire an incentive concept one year too early rather than one year too late. “With incentive meetings, your imagination is really the only limit,” says Sean Mahoney. “People want to be surprised, thrilled, excited. These are what create memories and trophy value. So surprise, thrill and excite them!”
