Reward and recognition programs are not static –you may not know that 86% of U.S. businesses make some revision to their program on an annual basis. T
Reward and recognition programs are not static –you may not know that 86% of U.S. businesses make some revision to their program on an annual basis. This is true across all business sizes and all sectors. And there is no one type of program change that rises above the others; sometimes it’s a revision of the rules, sometimes it’s the reward selection, sometimes it’s a simple revision to the language used to describe the program. The regulatory environment plays two roles in program design – it provides a potential impetus for revision of the program, and it informs the design and approval of those revisions.
A recent study into the effectiveness of non cash rewards by the IRF has revealed some interesting facts when it comes to rewards. Here are a few takeaways.
It’s common to change reward programmes regularly
In 2017, 93% of U.S. businesses made at least one change to program design based on the regulatory environment. Half of U.S. businesses made eight or more changes for this reason. There are no differences by business size or sector, meaning small businesses, despite their relative lack of knowledge and certainty, are still making an effort to meet the compliance requirements for their programs.
Communication and programme design are most common ‘tweaks’
The most common design revisions are to general program design (87% of businesses) or program communications (85%). Specific changes made by at least 40% of U.S. businesses to address regulations include:
- Underlying business purpose of the program
- A complete redesign of the program (especially financial services firms)
- Changing the rewards mix (especially financial services firms)
- Changing the name or description of the program (especially financial services firms)
- Editing the language used to communicate the rules (especially financial services firms)
- Changing the products included in a sales or channel incentive program
- Changing cash rewards to non-cash (especially financial services firms)
- Redesign of group incentive travel events (especially financial services firms)
- Increased scrutiny on program statistics
- Increased scrutiny on program accounting (specifically W2s and 1099s)
- Increased program budgets to pay for these changes (especially financial services firms)
Here are some of the stats in detail.
Regulatory Accommodations – Communications
Financial services firms were more likely than their counterparts to be making some additional changes:
- Outright elimination of a program
- Shift rewards from gift cards to other non-cash rewards
- Shift rewards from cash or non-cash to other intangible rewards
- Increased scrutiny on program outcomes, including ROI
- Increased staff support to accommodate regulatory environment
Small businesses are the most likely to be shifting from cash rewards to non-cash
When it comes to the rewards on offer, the largest and smallest firms have specific areas of particular focus. Small businesses are the most likely to be shifting from cash rewards to non-cash (and driving the continued increase of non-cash reward use in the U.S. market), while large firms are more likely than small and mid-sized businesses to be doing the following:
- Redesigning a group incentive travel event
- Outright elimination of a reward and recognition program
- Revising the name or description of a program
- Increasing staff support to accommodate regulatory compliance
Regulatory Accommodations – Rewards