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Study: Incentives more Important than ever in Motivating Employees

Are your employees singing the blues? Are you having a tough time getting them fired up about safety? If so, then it might be time to dust off your incentive program using information from a new study.

Are your employees singing the blues? Are they seemingly unmotivated? Are you having a tough time getting them fired up about safety?

If so, then you might be thinking about starting an incentive program. And if that''s the case, then a new study, "Incentives, Motivation and Workplace Performance: Research and Best Practices," contains some interesting information. For example, the study found that team-based incentives work best, and incentives can have a positive impact on the negative attitudes that adversely affect achievement of work goals.

The study is the most comprehensive ever done on the effectiveness of the $27 billion incentive industry and its usefulness to employers in determining the relationship between incentives, motivation and performance in the workplace.

"This definitive study shows that tangible incentives dramatically increase work performance by an average of 22 percent," says Mike Hadlow, president of the SITE Foundation, which released the study today. "No CEO in the world can afford to ignore this compelling finding. Incentive programs may be the single most important performance-improvement tool available to executives today."

He adds a number of key findings of "Incentives, Motivation and Workplace Performance: Research and Best Practices" will be especially useful for employers, such as how mood impacts motivation and performance. The study indicates that employers can change negative attitudes that adversely affect the achievement of work goals. In addition, there is strong evidence that organizations using incentive systems are able to hire and retain higher quality workers, and that these effects are even greater in larger organizations.

Key survey findings include:

  • Impact on performance - Incentive programs aimed at individuals increased performance by 27 percent. Moreover, programs aimed at teams increase performance by 45 percent.
  • Significant goal achievement - Ninety-two percent of workers surveyed indicated that they achieved their goals because of incentives. In addition, 57 percent of corporations surveyed reported that objectives were met or surpassed, and 92 percent reported objectives were surpassed, met or at least partially met.
  • Quality and quantity goals affected equally - Incentive programs have an equal, positive impact on both quality and quantity goals.
  • Employee input is valuable - Incentive programs structured with employee input work best; however, only 23 percent of incentive systems are selected with employee input.
  • Long-term incentives are ideal - Long-term incentives are more powerful than short term (44 percent gain for programs beyond a year versus a 20 percent gain for programs less than one month).
  • Design and implementation key to success - While even poorly designed incentive programs improve performance, proper analysis of the performance issue, the design and implementation of the incentive program are key to success.

The study was funded by the SITE Foundation and sponsored by the International Society of Performance Improvement (ISPI). Dr. Harold Stolovitch, who led the research team as the project director, is emeritus professor of instructional and performance technology at the Universite de Montreal and a clinical professor of Human Performance at Work at the University of Southern California.

by Sandy Smith ([email protected])

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