Is everyone more interested in a cash bonus rather than a jolly on the company? Travel incentives is a topic that the industry comes up against time and time again. Over the last 10 years or so I have seen lavish all-expenses paid incentives and fully paid-for incentives being cancelled by a bank weeks before departure, because of perceptions. There have also been incentives that are appropriate to austere times to a much more resurgent market in recent years.
But really, what is the point? Why take a bunch of people, probably along with some senior managers, and send them off to have fun? It's much easier just to pay a load of cash so they can pay off their credit card and get on with the job, isn't it?
Well, maybe. The key is understanding why you are running the incentive in the first place, and often a company does not really know. This is the starting point - companies have to ask questions such as
- Why are you running it?
- What is the impact of not running it?
- How is the success measured?
- What impact does it have on the bottom line?
Surprisingly, very often the company does not really know. Common responses include 'we have always done one', 'it is expected' or 'because the CEO likes to take the team away'.
Re-establishing the purpose
Of course most companies know exactly why they run travel or experience-based incentives and have a clear picture of what they want to achieve. Even when companies say that do not have explicit reasons, it will often become apparent what the purpose is.
Let's take the responses 'we have always run them' and 'it is expected'.
This can sometimes be symptomatic of a highly competitive job market where the incentive is seen as part of the package and has become an expectation. These are often found in sales-led and competitive organisations which are always trying to retain the best staff. I worked with a client that had the President's Club as its incentive programme to reward top performers. However it was apparent that every year it was the same faces and rarely did someone break into the 'club'. At face value this is not really doing what an incentive should, because the same performers were winning and it was becoming more and more exclusive. But the CEO's view was that 'these were the best' and as far as she was concerned, they needed to do something better every year otherwise someone else will and they will lose people to the competition. Retention was the single most important factor to this client and the incentive had become hygiene factor which kept them up with the competition.
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Trips have to be in the right place with the right setting for the employees attending ©Rawpixel/iStockThe top performer argument is always an interesting dynamic. It is generally true that the top 10% will always be the top performers, regardless of what is put forward as motivation. They are generally self-starters, potentially gifted at what they do and will normally be high in the table when the qualifying criteria is counted up. The same is true of the bottom 20% of employees as these are the ones that no matter what you do, they are never going to set the world alight.
However what about that 70% in the middle? How do you motivate them? This is the trick, because if you can get to them, then there will be a direct impact on the bottom line. It is important that the incentive in attainable, inclusive and the qualifying criteria is transparent.
The incentive also needs to be appropriate to the audience. Let's take the 'CEO likes to take the team away' remark. What the CEO wants (or sometimes what the CEO's partner wants!) may be very different to what the audience wants. I once ran a lovely incentive in a boutique, very trendy hotel with nouveau cuisine, a wonderful ambience and full of beautiful people. The CEO though it was divine. The audience however were early to mid-20s call centre operators who hated it. Drinks were too expensive, they want more food and if I had a penny for each time one of them said they were off to McDonald's….
Smart companies look at the wider aspects of the incentive
Some companies allow for a plus one — friend, partner, mum, dad we have had all sorts. This is actually very smart because not only are you rewarding the top performer, you are also rewarding the significant other.
Generally the incentive destination is announced nine months in advance and all of the KPIs drive towards it. If the partner is involved they are less likely to moan about the extra hours, the tiredness, maybe a little bit of grumpiness, if they know there is a prize at the end of the hard work. They may even be the drive behind it; often you will have partners of winners say 'I always wanted to come here' or 'there was no way he/she wasn't going to get on this trip'. A nice little bit of external pressure to help that person perform better is a win/win all round.
The interesting part of this story is that the winners are on fairly average salaries; they get a very attractive bonus but the incentive is over and above this. It is the additional carrot in the performance jigsaw. Companies doing this are also very forward-thinking employers with high staff retention and a genuine interest in their people.
But what is the point of a travel incentive?
To me it is quite simple: it is about hearts and minds. Travel gives that wonderful experience of seeing a different culture, maybe some sun, eating exquisite food and being able to enjoy an immersive experience. Travel touches us in ways that money cannot.
Delegates can have a unique experience, often going to places that they may want to go to but wouldn't take family to. Somewhere like Iceland fits into that.
Travel also has brag value, which is part of the motivation. Selfie culture has taken over, and being able to say "look at me on this amazing trip" spurs on the incentive winner's colleagues to get on the next one. To a certain extent, the process that occurs when the winners return is as important as the lead up to the event itself, as you want to inspire people to achieve.
So, back to the initial question. Are travel incentives worth it these days? Absolutely, definitely yes. A travel experience lives with you forever. You will always remember going somewhere, with who and what company it was and what you did there. Can you remember what you did with your cash bonus a few years back? Thought not. Cash is spent in a minute; travel lasts a life time.