Study: Incentives More Important Than Ever in Motivating Employees

A new study on the effectiveness of incentives indicates that incentive programs can have a powerful impact on increasing work performance.

The first study of its kind was funded by the SITE Foundation, a non-profit, independent research organization, into the use and application of incentive programs to achieve business objectives and to improve performance.

"This definitive study shows that tangible incentives dramatically increase work performance by an average of 22 percent," said Mike Hadlow, president of the SITE Foundation.

Of particular relevance during an uncertain economy is how mood impacts motivation and performance. The study indicates that employers can change negative mood environments that adversely affect achieving 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:

  • Incentive programs aimed at individuals increased performance a substantial 27 percent. Moreover, programs aimed at teams increase performance a stunning 45 percent.
  • Some 92 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.
  • Incentive programs structured with employee input work best.
  • 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).
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