Incentives Gain Legitimacy As Critical Planner Function

<B> Incentives Gain Legitimacy As Critical Planner Function</B>

By Lauren Bielski

Incentives are a booming business--and getting bigger--as a greater variety of vendors share a growing market for rewards, and corporations continue to mine for exciting ways to motivate employees.

According to Business Travel News' Meetings Monitor, more than 63 percent of the 218 planners polled work at companies that have offered at least one incentive program in the last two years.

Companies that do offer incentives are making sure that planners get in on the management act, participating in some level of decision making regarding travel, activities and other program specifics. Of the 132 survey respondents whose companies hosted incentives, 53 percent said they were involved in key decisions regarding the program, while 23.8 said that a top executive at their organization managed the program. Another 13.8 percent credited a sales director while 18.5 percent said the job fell to their corporate travel manager.

Karen Maynard, administrative manager with Tifco Industries in Houston, is one planner who get her hands on everything from developing contest rules to making reward suggestions, and works closely with the national sales manager and president to determine contest objectives. "Since we know we're going to have this annually, we have time to prepare and really think about how the contest will be perceived by our employees in light of what else is going on in the company," she said.

Industry insiders agree that following an early-1990's period of restraint, incentives are reemerging stronger than ever. Consultant Bruce Tepper, of Tepper and Associates in San Francisco, noted that the up-and-down cycle of incentives mirrors the perceptions and practices of individual companies. "Initially, most companies believe that having a good product will be enough to secure success. But once they begin to attract competition, and their product begins to be viewed as a commodity, incentives become a way to differentiate themselves," he said.

Jim Ryan, president of the 60-year-old Carlson Marketing Group, noted also that incentives are becoming more immune to the cyclical nature of the economy. "Incentives are viewed, in general, as a more critical contributor to the bottom line, even in tough times," he said.

In the current solid economy, many companies are broadening their incentive programs. Tifco, for example, no longer rewards only the top sellers in each of its four regions, but now offers trips to anyone who improves their personal sales by 30 percent, if they have worked five years or more, or by 25 percent for newer employees. This more democratic approach to incentivizing boosted overall sales to a noticeable extent, Maynard said, and resulted in an annual group size of about 50 attendees.

This inclusive approach is in keeping with two recent trends that Carlson's Ryan said he has seen in the incentive market. First, incentives are embracing not just salespeople but also support and service personnel for the part they play in increasing a company's market share. "Incentives are reflecting the reality that no selling process occurs in a vacuum, and that many people, working as a team, are responsible for the fiscal success of a company," he said.

Second, incentives are being planned more systematically. "We structure programs with a very well defined set of objectives at the outset, and try to design a reward structure that makes sense to best secure those objectives," Ryan said.

At Tifco, meanwhile, Maynard said that after trying an incentive program using merchandise prizes instead of travel rewards for two years, the company has come back to travel for the best return on its investment. "The year we used a catalogue of prize options, the program really floundered," she said. "Last year we went to Puerta Vallarta, Mexico, which was extremely popular."

While Maynard's group favored a structured itinerary, Joann Dowell, a corporate planner with Robert Thomas Securities of St. Petersburg, Fla., said her employees prefer a more relaxed itinerary, with plenty of time for networking.

"When I was a planner at our parent company, Raymond James, we had structured sales rules and a more traditional incentive program. Since my move here, I've been involved with the initial stages of a Leaders Council Meeting that will have some incentive and reward element to it, and I get the sense that networking will be more important. It's critical for a decentralized business."

Whether the agenda calls for sailboat racing or just laying back on the beach, incentive buyers are demanding more of their programs than ever--and looking for one-of-a-kind, hard to duplicate experiences. "With incentives, one thing that never changes is that companies are looking for reward experiences that leave an impression of having treated their employees very well," Tepper said.

Larry Sternberg, general manager for the Elms Resort and Spa, a Monarch Hotel in Excelsior Springs, Mo., agreed. Sternberg said his facility--scheduled to reopen this summer after a major renovation--will feature both an extensive wellness program (including yoga and meditation classes, ropes courses and other stress reduction offerings) and a Leadership Center, to create incentives and meetings that enrich as well as reward. "The market is shifting for a unique and substantive wellness experience," he said. "We realize this won't appeal to every group, but more Fortune 500 companies are expressing interest in programs that offer learning experiences that a person can take home with them and adapt to their own lives.