For Employee Incentives, a Downsizing Year

Voluntary Pay Cuts. Compulsory Furloughs. “Doing More With Less.” You’d think that this would be a banner year for employee incentive programs.

But the 2009 Promo P&I Survey found that it’s business very much as usual for programs aimed at rewarding employees and building workplace morale. If anything, the number of marketers polled who report incentive programs within their own companies has dropped from about one-quarter last year to one-fifth this time. And only about 10% of the holdouts say they plan to launch a workplace rewards program in the coming year.

Cash payouts rank first among employee rewards at the companies who grant them. That makes sense, since companies with incentive programs say they most often aim them at sales reps (75%), although 66.1% say they include non-sales employees.

Not surprisingly, then, respondents who offer employee incentives most commonly said they measured the ROI of those programs by tracking incremental sales (47.5%), although the proportion using sales as a metric of effectiveness is off somewhat from last year’s 53.7%.

Notably, more marketers say their companies are using incremental productivity and employee attitude surveys as gauges for the impact of their internal incentive programs. Year over year, employee retention has actually slipped five percentage points as an ROI metric to 20.3% — perhaps simply indicating that employees have more reasons to stay in a job these days than a restaurant gift card.