What Top Performing Companies Do With Their Sales Incentive Programs
The #1 top-of-the-charts incentive research paper is “What Top Performing Companies Do Differently with Incentives and Rewards” – that’s if I’m the judge.
That’s a big declaration after serving as an Incentive Research Foundation (IRF) trustee for seven years. For the last five years, IRF has been churning out 12 studies per year, so after reading 90% of those 60+ studies, the #1 greatest hit must have you on the edge of your keyboard in anticipation.
IRF launched its first Top Performing Company analysis in 2017. Feedback was so positive that IRF made it a “signature series” that will repeat regularly. In 2019, three vertical studies were released, analyzing top performers in manufacturing, technology, and financial services.
Top Performing Company Criteria
IRF researchers reviewed 900 companies looking for at four criteria for top performer status.
• High Revenues: $100 million or more in revenue
• Sales Growth: Greater than 5% revenue growth or stock price appreciation
• Excellent Customer Ratings: Greater than 90% customer retention or greater than 90% customer satisfaction
• Excellent Employee Ratings: Greater than 90% employee satisfaction ratings or greater than 90% employee retention and less than 10% top-performing employee turnover
3 Expected Findings
Executives at Top Performing Companies have a stronger belief in non-cash rewards and recognition, based on higher scores across 11 metrics. Specifically, top-performing companies were 20% more likely to say non-cash rewards positively affect recruitment, retention, and engagement – and 30% more likely to believe they effectively influence behavior. Workers say that’s “putting your money where your mouth is.” See #1 of 10 Things Top Performers Do Differently.
If you read any CEO interview about their top concerns, talent always makes the list. The Financial Services vertical study validates that top-performing companies are 36% more likely than average peers to proclaim their reward and recognition programs are effective retention tools. Notice that’s much stronger than the 20% differential in the 2017 general study. No surprise; research validates CEO street smarts. Non-cash rewards and recognition enhance talent-strong cultures. Interestingly, the Technology study highlighted greater recruitment benefits too, which makes sense in the “tech space” where business cycles move fast, and people bounce around frequently.
(3) BETTER TRIPS
You’d expect top-performing companies to have better club trips, and research validates it. They invest more. The Financial Services vertical study reports average incentive trip value per person of $6,438, and the Technology study reports $6,833 – versus the benchmark of $5,193 from the 2018 Incentive Travel Industry Index.
3 Unexpected Findings
Everyone expects recognition of top employees. Researchers call this exclusivity. But the Top Performer studies show a twist with greater reach across wider levels of varying recognition or award tiers. In other words, if a sales rep was not in the top 10% earning the President Club trip to Hawaii, they might earn a merchandise award or gift card. See #7 of 10 Things Top Performers Do Differently.
The Top Performing Technology study adds a new insight that hits the bullseye in today’s barrage of emails and media messages – simplification. Simple program rules and simple metrics are identified as differentiators. Simplicity reduces clutter. Simplicity sharpens focus. Employees are bombarded with too much information. They seek brevity. Steve Jobs said, “that’s been one of my mantras – focus and simplicity.” He did pretty well.
Top performers are more likely to look to outside incentive agencies for expertise and help. The Technology vertical study reported that 88% of top-performing companies look to outside partners for expertise on the best ways to recognize and motivate participants, which is 20% higher than average performing companies. (See slide 22) Perhaps, technology companies who sell cutting-edge expertise themselves are quicker to recognize the value of incentive companies and their software platforms. Deep dive into how to hire an incentive company before making a decision.
If your CEO or CFO needs ROI proof, these might not prove causation of top performance from non-cash rewards, but it quantitatively proves a correlation. For the sake of your employees and shareholders, the research should nudge the C-suite with tips to join an exclusive club – the top-performing companies club.
Register for our upcoming webinar on what top-performing companies do differently with their sales incentive programs for a closer look.