Successful financial capi- tal management has long been an accepted competitive edge for organizations.
Thankfully, nowadays successful organizations also acknowledge the vital role effectively
attracting and retaining top
talent plays in outperforming the competition. In other
words, human capital — and
the ability to turn people’s
potential into performance
(and then into profits) — now
distinguishes exceptional companies from the merely mediocre ones.
But unlike financial capital, human capital involves complexities such as ambitions,
motivations, feelings, and values. And many
businesses are still learning that when it
comes to successfully leveraging human
capital, rewards and recognition programs
aren’t just a minor part of the equation;
they’re an essential tool to apply strategically
to work with — not against — these human
That’s why the Incentive Research Foun-
dation (IRF) “Incentive Benchmarking Sur-
vey” examined what top-performing com-
panies — those with high revenues, good
growth, excellent customer ratings, and
excellent employee ratings — do differently
from their average-performing counterparts
regarding rewards and recognition.
Major revelations? We discovered that
not only are top performers more likely
to reward their salespeople (90 percent),
employees (88 percent), and channel partners (81 percent) than are their average
counterparts, they also design, run, and
value their recognition programs differently.
Lesson 1: Don’t forget the executives!
Executives’ beliefs in the value of these tools
was one of the strongest differences between
top-performing and average businesses. At
top companies, executives are a whopping
35 percent more likely to believe non-cash
rewards and recognition are a critical tool in
managing company performance. A full 30
percent more see non-cash rewards and recognition as a competitive advantage.
Lesson 2: Pay a little more per
reward; it’s worth a company’s while. We all know you have
to give a little to get a little. Reward
payouts are no exception; top-performing companies have higher payouts in their programs than average
companies do. The typical salesperson in a top-performing company
can expect to earn $3,916 in non-cash rewards versus $2,749 in average companies, and employees earn
$170 versus $147, respectively.
Lesson 3: Try to reach a higher
number of employees within a
company, not just those that perform
the best. For many years, an underlying
theme of non-cash rewards was to highlight
only the “best of the best.” Yet, 56 percent
of top-performing companies say they prior-
itize reaching every participant, rather than
just the best in both sales and employee
programs, compared to reaching just 36
percent (employees) and 28 percent (sales) of
The bottom line? Top companies didn’t
get to the top by accident. And companies
don’t dole out rewards simply because it’s a
“nice thing to do.” Rewards work and make
companies more successful.
Melissa Van Dyke has been president of the Incentive Research Foundation for more than six years. The IRF funds and promotes research to advance the
science and enhance the awareness and appropriate application of motivation and incentives in business and industry globally.
By Melissa Van Dyke
Non-Cash Rewards and the
New Competitive Advantage
Top-performing companies believe in the value of non-cash recognition
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