Whenever a company is considering implementing an incentive, recognition or rewards program grounded in best practices, there always seems to be a stakeholder who objects. “Our people really want cash,” they say. “Just give them what they want. It’s simpler.”
Incentive and recognition leaders have long agreed that cash rewards did not have the intended impact for most audiences. In recent years, extensive research — including researcher Scott Jeffrey’s work on the Benefits of Tangible Non-Monetary Incentives1 — has confirmed that using cash for recognition and rewards is less effective and efficient. We
New research confirms just how fundamental this preference for tangible rewards really is.
The Incentive Research Foundation (IRF) partnered with a neuromarketing organization to use leading edge biometric technology to better understand incentive and recognition program participant reward preference. The findings have been released in a pair of enlightening papers2,3.
The result? It’s not about cash.
The IRF experiment set out to shed light on two things: reward preferences and the experience of receiving recognition. Instead of taking study participants’ word for their preferences, however, each person was monitored for biological responses to the options. This allowed researchers a glimpse into the gap between what people say they want — even what they think they want — and what they actually prefer.
Among other measurements, the eyes played an important role in this study. When people are aroused by something — whether that takes the form of anxiety or interest — their pupils dilate. Researchers monitored pupil dilation to gauge real, even unconscious interest.
Researchers also set out to understand how System 1 and System 2 thinking played a part. System 1 thinking is automatic and instinctual, but System 2 is a rational overrider of System 1. By following the eye tracking of participants, researchers were able to understand when they instinctively preferred a reward (System 1) and when that desire was overridden by practicality (System 2).
The study shows that people are pretty complicated when it comes to reward preference, and our eyes give us away.
The findings include:
So what did appeal? Spa treatments, dinner for 10, sporting events, and a retreat or family vacation. Experiences and highly desirable tangible items were frontrunners.
The second part of the experiment looked at what kind of reward experience was most desirable for study participants. Possibilities included Big Show (large recognition event), Little Show (with work group and immediate supervisor), Peer-to-Peer, and Private (a note from the CEO). The study participants were monitored for biometric responses to hearing each presentation style described.
There were a few surprises:
IRF researchers write, “Our results demonstrate a highly-individualized range of preference. They suggest again, in keeping with much prior research, that rewards and reward presentation are more effective when individualized to each person’s preferences.”
This reinforces the lessons learned in a previous joint study4 by the IRF and the Incentive Marketing Association (IMA). Amazingly, the 2015 Landmark Study of participants found that out of 452 respondents, 99% had a unique combination of preferences of reward experience. The study included how, when, and by whom recognition was presented, and considered a variety of cash and non-cash reward options.
All of the studies point to the individual nature of people in the workplace. The importance of the role of colleagues and managers in personalizing the experience to be the most meaningful possible cannot be overstated.
This new research holds important take-aways for every organization:
To fully engage with employees, customers, and channel partners, it is essential to understand their motivations and aspirations. Incentive, recognition, and reward experiences and options matter to program participants and to the success of the initiative.
As Vice President of Travel & Engagement at Next Level Performance, Susan serves on the board of the Incentive Research Foundation (IRF), and chairs the IRF Research Committee. She has also served on the board of the Incentive Marketing Association (IMA) and is a past president of the Recognition Council, and a past member of the Performance Improvement Council and the Incentive and Engagement Solution Providers (IESP). She is interested in the strategies and benefits of employee engagement, incentive, and recognition programs. An avid traveler, she is also passionate about the art and science of incentive travel.