The Theory of Behavioral Based Motivation
Goals are objectives which are set for progress. Everyone has goals. Personal goals could include, for example, buying a new home. Production goals could include setting a record and surpassing the competition. Sales goals could include becoming the top producer of the month. So what makes us strive to achieve those goals?
Behavior is the manner in which we behave. We change our behavior to accomplish a goal.
- Personal goal - save money to make a down payment on a new home.
- Production goal - work smarter and take shorter breaks to produce more.
- Sales goal - make more cold calls to generate more sales.
So how do employers influence behavior and encourage employees to take ownership of company goals?
Motivation is the reason behind our actions
Behavior is influenced by motivation.
With proper motivation - we will do whatever it takes to accomplish the goal.
We will say “no” to spending money on a new car because we are saving for the new home;
or
We will take a 5 minute break instead of a 15 minute one to make sure we produce more;
or
We will call on 20 new accounts per day instead of 10 to generate those sales.
The concept of incentive motivation recognizes that goals we work to achieve must be rewarding to influence our behavior.
So to encourage employees to take ownership of the company goals you MUST:
- Motivate properly by rewarding
- to get the intended behavior
- that will ultimately lead to accomplishing the goals!
What are the Most Influencing Motivators?
A Sense of Pride - A feeling of worth and satisfaction for your achievements
People want and need to be recognized and rewarded for special efforts.
What employees want is tangible proof that you really care about the job they do.
Recognition - the acknowledgment of a behavior, effort or action that achieves the goal.
Don’t get confused and create a culture of expectation.
Compensation is what employees get for doing their job (an expectation).
Recognition is a reward for their efforts and accomplishments (motivation).
Studies show that 62% of employees feel they are not properly recognized.
Employee recognition is the scientifically confirmed application of behavioral psychology.
Employee performance and retention are directly linked to consistent, appropriate, positive
reinforcement of behaviors that promote attainable goals.
can foster an atmosphere of motivational behavior change.
So How do you motivate properly?
By acknowledging the studies and listening to employees - the formula for success is clear...
Gallup Workplace Study 1999:
Employees with the most satisfying, profitable and productive workplaces state that they...
Know what is expected of them
Have the tools to do a good job
Have the opportunity to do what they do best
Receive recognition for a job well done
When questioned - employees state that the most important and influencing aspects to them were...
Motivate me.
Recognize my efforts.
Create a positive recognition experience for me.
Provide a reward that I can choose.
Foster open communications of appreciation and improvement.
Allow me to share with my family.
Basically - What’s in if for ME?
82% of employees say the most important and influencing feature of an incentive program is:
The ability to choose their own reward - what THEY want.
~Synovate Employee Survey March 2000
Why Lifestyle Merchandise Rewards?
Lifestyle awards are the best avenue to reward and recognize employees for numerous reasons.
Tax Free
The first and probably most important to you and your company is:
An All Merchandise Program is TAX FREE!
All gifts and awards from employers to employees are considered wages for income tax purposes,
and as such are subject to all payroll deductions and employment taxes.
There IS however a narrowly crafted exception to this general rule and in these cases the award is
received by the employee tax-free and the employer still receives a tax deduction.
The exception applies to employee achievement awards.
The Tax Reform Act of 1986 provides, in general, that an employer may deduct the cost of
“employee achievement awards” given to the same employee up to $400 in any year BUT if the
employee incentive achievement awards are earned under an established, written and published
program, the $400 deduction limitation is increased to $1,600 per employee. When the incentive
award qualifies under these guidelines, it is not only deductible to the employer but it does not
have to be included in the taxable income of the employee. Nor is it included in employment taxes
or the social security benefits, either.
The IRS code defines “employee achievement award” as an item of “tangible personal property”
transferred to an employee by an employer for achievement or length of service. This is the
primary reason you will not find gift cards, gas cards or travel rewards as part of the Incentive
Solutions programs because these are not tangible personal property as far as the IRS code is
concerned and are considered taxable income.
Lasting Effects
Merchandise rewards are the best avenue for rewarding employees because of the lasting affects.
Employees will remember their accomplishment and remember their recognition for a job well done
every time they use their lifestyle merchandise reward. In a 2005 survey for Incentive Federation
Inc., 4 out of 5 respondents confirmed that merchandise is remembered much longer than other
incentives.
Perceived Value
The perceived value of merchandise rewards is much higher than other types of rewards. A gift
card is a fixed value. A gas card’s value is concrete. There is no perceived value - only the face
value. With merchandise rewards, individual dynamics can increase the perceived value over
and above the actual cash value. This is classified as the “trophy value”. Participants are provided
the option of earning merchandise that improves their lifestyle - merchandise that potentially could
not be afforded or the expense could not be justified. There is no limit to the perceived value when
it improves your lifestyle.
Consider a Canon video camera or Nikon digital camera for an upcoming family vacation.
This could be priceless to the recipient for the documented memories.
Or what about a Calphalon Cookware Set with which to cook your first Thanksgiving meal for your family?
Or how about a Sony flat panel TV and Home Theater System to host a family movie night every week?
Merchandise rewards are lifestyle enhancements with no limitations to the perceived value.
Actual Value
Merchandise rewards provide an actual increased merchandise value to the participants.
Think about a $300 Garmin GPS system you want to buy - You must have earned at least $425
before taxes on a paycheck to net approximately $320 after taxes. Then consider you will pay
sales tax (on average of 7%) of the purchase price, which is $21. To get a $300 GPS, it would require
more than $425 in taxable income and this doesn’t even account for the time and gas it took to get
there to make the purchase. To earn a $300 GPS in a merchandise rewards program, no sales tax
is required, there is no tax liability because it is not considered earned income and there is no extra time
or gas required to acquire the award. All that is required is accomplishing the goals.
Merchandise Versus Cash
There is perhaps no subject debated more frequently than the value of tangible non-monetary
incentives versus cash. Cash as a motivator is not only taxable but is unemotional. While
it could be used to purchase lifestyle merchandise, most likely it will be charged against a
burgeoning pile of bills or deposited into a leaky checking account where it soon ceases to
exist. And with the demise of the cash award also goes the memory of its origin. Studies from
the Center for Concept Development conclude that more than 50% of employees view cash
incentives as something they are due. Three out of five respondents agree that a cash payment is
perceived as part of their compensation plan. In the same study, 74% of respondents agree
that a program with merchandise rewards is more exciting than cash and is perceived as a
reward that was earned - not compensation.
Flexibility
Merchandise rewards can be chosen and redeemed at the participants’ leisure as they reach
milestones. They can choose what they want to be rewarded with and when they want it.
Long Term Consistent Achievement
With a structured and ongoing merchandise rewards program, employees will continue to strive
to achieve the goals at every milestone in pursuit of those much-sought-after rewards. If a DeWalt
Cordless Drill is valued at 10 tokens or points and an employee can earn up to 3 tokens or points
per month, this motivates and inspires consistent long term goal achievement. Even after the
participant has earned the cordless drill, they will then set their sites on the next lifestyle
enhancement reward with a renewed enthusiasm.
How do these efforts benefit the Company?
Employees aren’t the only ones who benefit from great incentive programs.
Findings from a Watson Wyatt Worldwide study indicate that companies with an
effective program in place realized a median return to management and
shareholders that was almost double that of companies which didn’t have ways
to motivate and recognize employees for achieving goals.
• Employees are more dedicated and loyal.
• Morale and the workplace are enhanced.
• Quality and quantity increase.
• Goals are achieved.
The Company Profits!!!
Why have Incentive Solutions design and manage your program?
There are very few opportunities today that offer a guaranteed return on investment and a tax-free one to boot!
Incentive Solutions designs each and every program to follow strict IRS guidelines for incentive rewards to
be tax free and we design it where there are no up-front costs to you, so you do not spend a dime until your
goals are accomplished.
How can we guarantee a return on investment? Because we are your business partner. We do not
get paid unless we make your program successful by getting your goals accomplished. We do this by
educating and communicating with the participants, choosing lifestyle rewards that motivate them and by
structuring a program that is easy to understand, follow and remember. Our goal is to have every
participant take ownership of the program.
We want to be considered an extension of your staff. We will get and stay involved in every aspect
of the program and its success. If we keep the participants motivated and engaged, we will both
enjoy success. We will do whatever it takes to motivate your participants whether it be teaching a
participant how to use their new digital camera, to sourcing a special merchandise request such as
a 12” miter saw as opposed to the 10” featured in the current catalog, or drop-shipping a video camera
to the hotel where your participant is staying for their family vacation because their redemption request
wasn’t submitted in time to receive their reward before they left for vacation.
We are a complete support organization for your program. You will be provided a dedicated program
manager that is available to all participants 12 hours a day along with an account manager that is available
to your management staff.
No other incentive company offers the Incentive Solutions level of engaged support with no up-front costs
and with such a commitment to the success of your program.
Allow our team to design an incentive program that will achieve your goals.
