Is My Travel Program "Reward and Recognition" or "Incentive" Based?

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True or False? “Reward and Recognition” and “Incentive” programs are really the same thing.

Answer: False. Reward and recognition programs focus on reinforcing behaviors by providing awards and personal recognition based upon an observable behavior. Incentive programs inspire participants by influencing efforts that help achieve future business goals.

Think about the basic qualification structure of these programs. Often, open-ended qualification structures are more incentive-based while closed-ended qualification structures reflect a reward and recognition orientation. Closed-ended structures tend to fall in line with the Pareto principle (80/20 rule), where 80 percent of your performance is contributed by 20 percent of participants (“A” level or top performers).

The challenge with closed-ended qualifications occurs when only the top portion of your sales team feels they can achieve the award. Also, keep in mind that the effectiveness of a program’s performance can be misleading as “A” level performers tend to perform despite what’s going on around them. As such, if your next level of participants (“B” level performers) are not motivated by the program design, it will not achieve the best possible results. Representing the majority of your participant base, “B” level performers can easily be disengaged from your program’s sales targets because of a closed-ended qualification structure. They already know who is going to earn the award and don’t feel that they can achieve the qualifying performance objectives.

Consider the situation faced by Pacific Life. While their “A” players were motivated by the incentive travel program, their “B” players weren’t because they didn’t view the sales targets as attainable. Maritz Travel suggested a shift to an open-ended qualification structure that kept the top performer program intact, but extended the motivational value for mid-level performers by establishing attainable sales targets that would not have qualified them under the old closed-ended qualification structure. These targets represented significant new volume for the company and resulted in “B” level performers contributing 80 percent of total sales growth for the year and $14 million in incremental profit.

By focusing on these two distinct concepts companies can create more effective programs.

Generational Differences and Incentive Travel Program Design

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True or False? Incentive Travel participant preferences vary greatly based on generational differences.

Answer: False. Based upon a National study by Maritz, there are actually more commonalities than there are differences. The key is discovering what program design decisions are common versus unique and how the order of individual preferences fall.

During the design phase of any travel incentive program, stakeholders and planners face the harsh realities of making choices that need to be the right one’s to effectively drive the broadest levels of motivational value. This challenge is made even more difficult by an increasingly diverse participant base. Making the right decisions in program design go a long way towards creating the “WOW!” factor that drives excitement, buzz and performance.

Demographics have been used for years to cluster and understand what might best motivate incentive program participants. One of the most frequently used demographic categories is based upon age, which in turn also allows us to breakdown a participant base into what is commonly known as generational segments. These generational segments are then used to infer program design choices.

Generational segments are greatly influenced by such areas as the world events and societal trends that they are raised within. In addition, we tend to think about how generations tend to think, feel and react differently throughout the course of their life. However, the important thing here is that generational differences and lifecycle assumptions alone can also be quite misleading.

Based on a number of surveys completed by Maritz that look at the question of effective program design, we can see some interesting information on the role generational attributes play in incentive program design. For example, a large insurance company client, with many of their earners in the 50-60 year old range, discovered that their greatest design request was that the guest policy be expanded from being able to take children on family friendly programs to also including grandchildren.

While generational segments are important, they are not the only consideration for program design. Overall, the focus shouldn’t be just about generational differences, but rather more so on how you better engage different people in more meaningful ways to drive performance. Attending to this fundamental shift will help better shape incentive travel program design as it relates to destination, activity, rule structuring, promotional communications and other decisions to achieve stronger and broader motivational appeal and value for participants.