Award presentation, professional development and work locale all are key factors in effective employee motivation, according to a study released in November by the Incentive Research Foundation (IRF).
The IRF and Intellective Group were commissioned by the Incentive Marketing Association (IMA) in the spring of 2015 to produce the study, which discovered that employee award programs should be as heavily vested in presentation and professional development as they are in the award itself. It also was indicated that programs should be moderated for the employee's work environment and sensitive to an employee's individual preferences.
A number of myths were uncovered as well, surrounding employee awards, showing how organizations should focus more on individual employee needs and not generational assumptions.
"We know from this study that sometimes more than half of what determines a preferred experience are elements other than the reward. Creating an effective award experience means we must know how employees want to be recognized, by whom and with what types of professional development implications (special projects, etc.)," said Melissa Van Dyke, president of the IRF.
"It also means we must make it personal. For example, knowing their favorite colors, hobbies, heroes and anything else that will make the recognition personally meaningful," she said.
Moreover, the study defined the employee total award experience to include not only the specific physical reward itself, but also the person who recognizes the recipient, how the award is communicated, and what professional impact the award carries (for example, being allowed special networking, mentors or assignments).
"We have known for years in our industry that anecdotally cash is not always king. So, it is not surprising that this study confirmed that," Van Dyke said.
"We have also always known that while the award was a vital element, other factors—such as how the recognition occurs and what a person's work environment is—were important. We did not realize how important these were until this study," she added. "We were also surprised at how similar millennials were to the other generations, not as different as often touted."
Below are four key findings from the study:
Finding #1: The experience is much more than just the reward. While the physical reward is still a big part of creating a motivational experience, the study revealed that, on average, between 40 percent and 50 percent of an employee's preferred total award experience has nothing to do with the physical reward itself.
The award presentation and professional development implications for small awards drive approximately 40 percent of an employee's preference for a given award experience. While the award itself does still determine almost 60 percent of the preferred scenario for small awards, the study shows the surrounding experience factors heavily. For small awards on average, how the award is communicated drives 16 percent of an employee's preferred experience, professional impact determines 14 percent of an employee's preferred small award experience and who is recognizing the employee determines 9 percent of an employee's preferred experience.
The study also indicated that the larger the actual award in question, the less an employee's preference for a given experience is determined by the specific award itself, with more than 50 percent of an employee's preferred experience being determined by award presentation and professional development.
Furthermore, the study found that when providing a large award to an employee, on average the professional development implications tied to the award will determine 32 percent of an employee's preferred experience and the award presentation (who and how the award is presented) determines 21 percent of the employee's preferred experience.
Finding #2: Employee work environment has a larger impact than their generation. While there has been much discussion surrounding how different the millennial generation is from the other generations in the workforce, the study found that this does not hold true for award experience preferences.
The study revealed that the weight employees give to who presents the award, how it is communicated and the professional development implications are generally the same regardless of a person's income, role, gender and even generation, with one small exception: Baby boomers place somewhat more emphasis on how the award is communicated.
"The study did uncover, however, the large impact an employee's work locale has on their motivational preferences. For example, factory and retail workers place a much larger emphasis on award presentation and professional development than the rest of the population. In fact, these elements determine almost 70 percent of a factory employee's preferred large award experience, with only 30 percent of the experience focused on the award itself."
Similarly, compared to other groups, home office workers place a higher emphasis on how a large award is communicated. The study also found that for small awards, factory workers, retail employees, and those whose listed work locale was 'other' (policemen, nurses, etc.), place a higher emphasis on award presentation and professional impact than office or home office workers.
Finding #3: People don't automatically prefer cash awards. When provided a robust award experience that aligns with their personal preferences, employees do not automatically choose cash as part of that experience, especially for large awards. The study found that, on average, the most preferred award experience for large awards is a travel award, presented by travel executives, communicated in a public announcement, and combined with the opportunity for special networking. And, while small awards do correlate to a high preference for cash on average, 65 percent of people stated that they would select a non-cash award if all other experiential elements were optimal.
Finding #4: Reward preferences are very unique. "Finally, and perhaps most importantly, the study revealed how important it is for organizations to truly understand the individuals they would like to recognize and reward. Out of 452 respondents, 99 percent indicated that they had a unique set of preferences, different from every other person in the study.
This is, again, a strong indicator that just as we are unique individuals in our consumer shopping and lifestyle habits, so also are we unique in our preferences for reward and recognition. Businesses should continue to expand efforts to help managers understand employee's interests, likes and dislikes. It can start as simply as asking employees' favorite activities, movies, hobbies and music. Using these personal interests to personalize a reward makes the impact and expense all the more worthwhile."
The author is Associate Editor of PREMIUM INCENTIVE PRODUCTS magazine. The publication helps build sales in the premium incentive marketplace and is devoted to delivering information on the industry’s top products and best practices to stimulate buying activity.