Give And Receive: The ROI On Incentives

Give And Receive: The ROI On Incentives


Business people are well acquainted with the concept of return on investment, and further know that the success of a particular venture is almost entirely defined in terms of ROI.

Whereas ROI comes in many forms, the golden rule is that the bottom line should show a significant positive impact.

When it comes to investing in an incentives programme, reliable research suggests that the ROI, due to various factors, is very encouraging.

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Whereas it’s easy to measure returns in terms of hard figures, usually measured by comparing pre-programme figures with post-programme figures, the ROI of incentives schemes goes well beyond hard stats.

Other profitable returns can be found in the “softer” side of employee management, not least of which is top performing employee retention, employee skills development, workforce morale, workforce productivity, wellness, positive engagement with company culture and clientele, and loyalty.

Research Figures

It’s difficult to measure the above metrics in terms of hard stats such as sales figures, but the spin-off benefits to your business should be quite obvious.

Some of the stats that research has found are, however, very interesting.

  • 78% of employees surveyed indicated that acknowledgement for good work is “very” and “highly” important
  • 82% of respondents reported that recognition acts as a very powerful motivator to complete good work in the future
  • 92% of all employees surveyed said that good, desirable incentives act as a catalyst for harder and more productive work
  • Just under 20% of talented individuals leave their posts as they feel that good work is consistently not recognised by management structures
  • Engaged employees are up to 480% more willing to “go the extra mile” to ensure a positive customer experience.

The above respondents clearly indicate that these “spin-off” benefits lead directly to a happier, more motivated and more productive workforce.

Moreover, companies that implement a well-run and effective incentives programme can realise a medium return to shareholders that increases by 100%.

The increase in workforce productivity is nothing to be sniffed at: Motivated workers are 30-40% more productive than employees that aren’t incentivised, and the ROI becomes especially impressive when one considers that only 5-30% of the extra profits earned are re-invested back into the programme. Nice.

Programme Design

“How does an effective incentive scheme work?” you ask. It must be remembered that a general rule regarding incentives is that the programme should increase motivation and performance by setting desirable rewards.

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The exact psychology behind motivation will be explored in a later article, but I will outline some important points here:

  • Rewards must be desirable and worth-the-while to participants
  • Rewards in general must have a trophy value (cash is usually spent on paying bills, etc. but a trophy serves to remind the winner that their work has been appreciated)
  • Travel is always a popular reward option that certainly drives performance
  • If possible, give the reward recipient a choice with regards to their reward: We, for example, use an online catalogue with over 14 000 products that can be redeemed for e-cash or points
  • Gift cards are also popular and the product bought with the card contains the above mentioned trophy value
  • Whereas cash is regarded as “king”, it lacks trophy value and the achievement value is lowered, therefore points and gift cards are better options.

If you feel that your incentive scheme could be improved, contact a specialist as they are in a prime position to analyse your business culture, your goals, and thereby design a programme that is tailor made for your individual needs.

David Sand
David Sand – CEO and founder of UWIN IWIN (Pty) Ltd -1994, with offices in South Africa, Kenya, Egypt, Ghana, Nigeria, India and Brazil. 2013 Global President of Site Global, the professional association for leaders in the motivational events and incentive industry. Regarded as a pioneer in the field on online incentive point banking and online loyalty, recognition and reward fulfilment. David is also the founder of the Youth Employment Index a non-profit company that addresses youth employment issues in Africa.