As a travel management company, Carrousel Travel works with organizations of every size on their incentive travel and rewards programs. And while every organization is unique, some things never change. One of the most common questions organizations ask is around their return on investment. What’s the ROI of rewards programs?
Like everything in this data-driven world, it’s easier than ever before for companies to crunch the numbers on the effectiveness of employee incentives. We know anecdotally that employee recognition programs bring increased sales, higher productivity, as well as other bottom-line benefits. Incentive Podcast breaks down how your organization can start monitoring these returns.
How to Measure the ROI of Rewards Programs
Incentive Podcast engaged the big guns for this talk: Melissa Van Dyke, president of the Incentive Research Foundation, and Paul Hebert, senior director and solutions architecture for Creative Group. Moderated by Incentive’s Alex Palmer, the discussion focused on everything ROI--especially on how to get the most out of the data you can get.
Hebert identified one of the central tensions in the discussion as not only IS this rewards program resulting in positive ROI, but is it worth the money. Every organization has a choice on where to spend the budget. Making it extra important for every area to show its worth.
To be able to show its worth, rewards programs should have ROI baked in from the beginning, built into the foundation. Hebert notes that he always begins by asking clients, “What are you trying to accomplish? What has to happen for this to be successful?”
With those goals in place, the discussion can turn to what—and how—to measure. As Herbert notes, calculating ROI isn’t difficult, but it’s important to remember that rewards programs deliver increased, sustained benefits over time--like years--versus shorter-term initiatives. For example, in an organization that rewards their salespeople in the top tier with a trip to Hawaii, the ROI only tells part of the story. It helps retain the best salespeople and influences motivation. Rewards and incentives show that rewards are more than numbers.
Van Dyke’s research with the IRF also indicates that intangible behaviors are more accurate indicators of reward program effectiveness. But that there still needs to be measurable indicators. Van Dyke recommends sitting down with a thinking partner--someone from HR, talent metric organizations, etc--to create a list of behaviors that they need to start tracking. From absenteeism to more granular metrics possible via big data applications, it all starts with some careful consideration of how you can effectively relate your rewards program to your human capital to monitor the range of behaviors.
Incentive Reward Programs That Work
Determine what you want to do with your workforce to design an effective rewards program. Travel is one of the most common incentives provided, and it’s also one of the most effective forms of motivation for employees. When you’re looking for a thinking partner to plan out your program, don’t overlook a TMC like Carrousel. Contact us today to learn more about how we can help create a program with measurable ROI for your organization!