Companies to Increase Use of Employee Incentive Programs in Coming Year to Boost Results

Increasing employee motivation will be a higher focus for Canadian executives in the coming year as part of an overall strategy to boost company productivity and bottom-line results, according to the "2011 Canadian Incentive Trends Survey" conducted by Berkeley Payment Solutions.

This year's survey found that increasing employee motivation has become a key area of focus among Canadian companies, with a strong majority (88%) of respondents indicating this is a top management priority in the coming year. And in contrast to last year's findings, corporate incentives are being used for employee programs more than any other type of program — including sales and marketing programs, which were the leading uses in 2010.

Specifically, when asked how they have used incentive programs, more than two-thirds (68%) of respondents said they were used for employee programs, compared to just over half (56%) last year. Other uses for incentive programs included sales programs (55%), marketing programs (50%), customer retention programs (25%), rebate programs (18%), and channel programs (10%).

When asked why the implemented incentive programs, again over two-thirds (69%) of respondents cited motivating employees as the top reason. Other reasons and business objectives for the use of corporate incentives included increasing sales (62%), attracting new customers (41%), increasing customer loyalty (38%), supporting a product launch or promotion (34%), and increasing brand exposure/awareness (31%).

"We've seen an increase in demand for employee programs in the last year, as organizations look to adopt cost-effective strategies to motivate employees, improve team performance, and meet business goals," said David Eason, CEO of Berkeley Payment Solutions. "With employment rates on an upward trend, the need to attract and retain high performing employees continues to intensify."

The survey affirms widespread use of incentive programs, with almost three-quarters (72%) of Canadian business leaders confirming they have used corporate incentive programs as part of their business strategy. And more than half (54%) of these respondents felt they gained a competitive advantage over the competition as a result of these programs.

The survey also shows that incentive program budgets and the number of programs companies are implementing has remained fairly consistent year-over-year. When asked how their current incentive program budgets compare to the previous year, two-thirds (66%) of respondents said their budgets have stayed the same or increased — the same proportion as last year.

Similarly, almost three-quarters (71%) said the number of programs they are running this year either increased or stayed the same, compared to 73% in 2010. As well, almost half (46%) of respondents said the current economic outlook will have no effect on their corporate incentives budget in the next 12 months — up from 39% last year.

A key contributing factor to the continued use of incentives appears to be the high perceived success rate of the programs. In fact, of respondents who were able to measure program results, almost all (91%) confirmed their program was either moderately or very successful.

Aimed at helping executives gain insight into the views and practices of Canadian companies with respect to the corporate incentives programs they implement, the survey polled 429 Canadian executives from marketing services organizations, incentives firms, HR consultancies and corporations. It included companies of all sizes and across numerous sectors from financial services and consumer packaged goods to telecommunications, health care, media and advertising, manufacturing, and government.