The Incentive Research Foundation (IRF) recently released a new white paper titled “2012 Trends in Rewards & Recognition,” which highlights 12 key areas of focus in the incentives marketing arena for this year and what changes we as an industry can expect. The folks at IRF make several great points with regard to noncash incentives that we’d like to summarize here on Hinda Blog, and feel free to peruse the research for more information.
The report opens by explaining that change is in the air, and companies are starting to re-evaluate how they do business and utilize their human capital. “Fast HR” is a movement that the IRF points to that “encourages throwing out standard tools in favor of more expeditious methods to direct, focus, and energize employees.” The report goes on to add that non-cash is aligned with the Fast HR model and is becoming increasingly attractive to the C-suite, which it views as being one of the biggest trends to watch this year.
“Today,” reports the IRF, “a new wave of respected thought leaders that include McKinsey, Harvard Business Review, PricewaterhouseCoopers and Aberdeen acknowledge the effectiveness and/or strategic business value of noncash components.” In one example, the IRF points Aberdeen’s annual “Sales Performance Management Study,” in which it was uncovered that 21 percent of best in class companies – those that out-performed rivals across all major financial categories – utilized reward and recognition programs, while only 10 percent of non-best in class did.
Studies conducted by the other thought leaders named in IRF’s report realized similar outcomes. Noncash is on the rise, though it doesn’t come without its share of challenges, specifically that “noncash programs must complement other strategies and initiatives, the nomination/winning process must be clear and the evaluation/selection processes must be transparent” in order for noncash recognition to be effective, according to IRF’s research.
Incorporating another hot trend but staying within the realm of noncash, IRF explains that wellness programs are high on the list, and goes on to say that, if your company does not utilize a reward and recognition program currently, wellness is a great place to start. In 2009, the US spent about 17 percent of its GDP on healthcare, and yet America as a whole is not a healthy country, according to World Health Organization statistics.
Wellness programs can and should be worked into an organization’s current incentives bundle, according to the IRF. “Noncash incentive additions to wellness programs have been shown (Johnson & Johnson, for example) to increase voluntary participation by up to 90 [percent], a finding from ‘Big Fat Truth about Use of Incentives for Wellness Programs,’ published by the Incentive Federation.” Not only does this make for healthier people overall, but as we all know, fewer sick days makes for more productivity and lower health insurance premiums for companies – a winning situation all-around.
One final trend of note with regard to noncash – or any type of incentive, really – is retention and culture, which acknowledges, among other things, that “a lack of consistent recognition has impacted the ‘cooperative’ nature of some work environments,” according to the IRF report. “Recent research… show[s] that employees at ‘rewarder organizations’ generate ideas 250 [percent] more frequently than employees of organizations that are not rewarders.”
Whether your company has a stellar rewards and recognition program in place, a less-than-stellar one or none at all, the IRF has provided plenty for you and your employees to consider as we move along in 2012. Again, check out the full report and feel free to let us know your thoughts in the “Comments” section below.