More Incentive Programs, More Exec Input
<B>More Incentive Programs, More Exec Input</B>
By Chris Davis
Incentive travel managers, in addition to finding increased workloads due to larger incentive programs, are receiving more input from senior management on program specifics.
Many executives have incorporated incentive travel into their corporations' overall business strategies and, as a result, have the primary responsibility in managing such programs in nearly half of all corporations, according to a recent Meetings Monitor survey of 166 corporate meeting planners. While the corporate meeting or travel manager holds the primary responsibility for incentive travel in about 45 percent of companies, an almost identical number of respondents said the main responsibility lies with top executives, sales managers and financial officers, according to the poll.
"We act as if we were an incentive house with our own company as the client," said Penni Phillips, group and incentive specialist at Houston-based BMC Software. "The incentive location is usually a consensus of upper management after we make a recommendation to them. That decision can go all the way to the company president, depending on the scope of the event."
That setup is not unusual, said Dan Leong, COO of Atlanta-based incentive house USMotivation. "The level of decision making is at a fairly senior level now, because things related to incentives are more a part of companies' strategic plans," Leong said. "There's more use of incentives to drive performance and retain employees, as well as reward performance."
While senior managers often put their stamps of approval on incentive travel programs, Leong said their involvement usually is limited to deciding the destination and which employees are eligible for inclusion in the program. As such, USMotivation often finds itself working with clients on three different levels--with senior management on the goals of the program and with planners on potential locations and the details of the actual event.
"We've worked with management all the way up to the president or CEO," Leong said. "With the exception of the pharmaceutical industry, which has more formal meeting departments than other corporations, there's usually a vice president of sales or support overseeing the program." Though Leong sees the level of senior management involvement remaining about the same in the near future, the difference, he said, is that managers are more educated than they've ever been about the incentive process.
"They know more about good value and what the money for incentive travel gets the company," Leong said. "Sometimes, they'll even want to spend more than they have because they see the return as an integral part of their strategy."
Some corporate executives who have seen direct results from incentive travel programs have altered the scope of their motivational offerings accordingly.
"We've been giving cash awards for the past few years and telling the winners to take a trip of their own, but we may change that soon," said Terri Utecht, executive planner of meetings and conventions at Broomfield, Colo.-based Geneva Pharmaceuticals. "The recipients really disagree with cash. Even if they apply the money to a trip, it really has no value for them as far as the recognition factor. They would prefer if we took a handful of the elite recipients on the same trip, with spouses, and that's what we're moving toward."
Geneva's incentive travel programs usually involve some hybrid of meetings and leisure, with work accounting for about 30 percent of the trip, Utecht said. While her department handles the logistics and negotiations, the senior vice president of sales and marketing gets to make the call for incentive locations.
"We'll have a discussion with the senior vice president about what he'd like to see accomplished and where he'd like it to take place," Utecht said. "Then we'll offer him a list of locations and details about each one, he'll make the call and then we handle the negotiating."
Leong said the number and size of incentive travel programs have increased slightly during the past few years. Some of the increase can be attributed to corporations' desire to broaden the scope of the winners, he said. As such, there may be lesser prizes of shorter, less ornate trips awarded to second-tier achievers.
"Instead of a situation where there are winners and losers, they're trying to create degrees of winning," Leong said. "They want people to shoot for the big award, but not walk away empty-handed if they're just below that. Since travel is the best motivator, it's one way of doing that."
Other corporations have been able to hold the financial line on incentive travel without sacrificing its results, in some cases a direct result of senior management involvement. "The size and number of our incentives have remained the same, and we have to operate within a very strict budget," said Shirley Mertz of Columbus, Ohio-based Nationwide.
Nationwide encompasses several separate insurance companies, and the level of senior management involvement depends on the company in question. "In some cases, it can go as high as the president," Mertz said. "They all stay involved in the process, they all have location choice, and we submit proposals for the incentive program's content and speakers.
"We treat the senior execs like our clients," Mertz added. "We know our culture and where we've been in the past, so we work out the details, but they get final approval."
As in many aspects of the meetings and incentive industry, major corporate financial moves drive the level of group travel. "Incentive travel is holding firm, and the size of many travel programs is growing due to larger combined salesforces from mergers and acquisitions," said Linda McNairy, vice president of sales for the central region of Cornerstone, Navigant International's meetings and incentives arm. McNairy said most incentive travel programs tend not to need the approval of executives above the vice president level, with the exception of smaller companies, in which the president may be involved. "Usually they just review what's going on," McNairy said. "They're in the loop, but not hands-on, and they approve certain decisions.