The Incentive Research Foundation (IRF) today released a new study –  Non-Cash Value Perception: Identifying the Tipping Point – that highlights the importance of determining the optimal monetary value for incentive rewards.

While higher rewards can boost motivation and participation, there is a threshold where additional increases have diminishing returns. Identifying this tipping point helps organizations maximize the impact of their incentive programs without overspending.

“Whether using travel, merchandise, gift cards, or points, the value of non-cash rewards is in the eye of the beholder,” said Stephanie Harris, president, IRF. “The value of a reward that motivates and makes a strong impression on an hourly customer service worker may not make the same impression with the owner of an automotive dealership. The IRF’s new study helps incentive professionals identify the ‘sweet spot’ where the reward has the desired effect.”

The IRF surveyed 500 full-time employees or channel partners eligible for non-cash rewards programs within their organizations. The respondent base represented a wide range of salaries, and included retail sales associates, insurance agents, financial advisors or consultants, and operations, IT, and administration professionals. In addition, qualitative interviews with incentive program owners were conducted to gain a deeper understanding of how they currently determine reward values.

Key insights reported in Non-Cash Value Perception: Identifying the Tipping Point include:

• In all scenarios, as reward value increases, the percentage of participants reporting their willingness to engage in a program and exert extra effort to achieve its goals also rises – until a certain threshold is reached.
• When asked to suggest a reward value that would entice them, respondents often listed higher amounts than they later indicated as motivating when presented with actual values.
• While the majority of financial advisors/consultants and insurance agents choose to participate in incentivized reward programs, many who opt out do so for reasons other than the value of the reward.
• In a top performers scenario, channel program participants’ expectation of the reward value was 32% higher than that of employee program participants.
• Non-value related factors can greatly enhance a program’s appeal, including personalization, clarity and achievability of objectives, and variety and flexibility in reward offerings.

Non-Cash Value Perception: Identifying the Tipping Point was supported by IRF Research Advocacy Partner Maritz.