Forms of incentives

personal incentives—which motivate an individual person through his/her tastes, desires, sense of duty, pride, personal drives to artistic creation or to achieve remarkable feats, and so on.

group incentives—which motivate a group of people through their tastes, desires, sense of duty, pride, personal drives to artistic creation or to achieve remarkable feats, and so on.

Incentive travel

Incentive travel, then, is basically composed of memorable and enjoyable trips paid for by the traveller's employer, with the explicit aim of encouraging employ­ees to meet challenging business objectives through reaching or exceeding individ­ual and/or group targets. These targets may occasionally involve non-sales aspects of the company, such as reducing staff turnover; but overwhelmingly incentive travel is used with the basic objective of increasing sales.

With its strong emphasis on lavish fun, entertainment and indulgence, incentive travel is the form of business tourism that most resembles the type of leisure travel normally undertaken by individuals in their own time, unconnected with the workplace. Nevertheless, despite their superficial similarity to holidays and short breaks, incentive trips represent a distinctive travel product, which, due to its definite work-related purpose, belongs firmly in the category of travel for business.

General definitions describe this form of business-related travel in terms of its usage, one of the most commonly quoted being that used by the Society of Incentive & Travel Executives (SITE): 'A global management tool that uses an exceptional travel experi­ence to motivate and/or recognise participants for increased levels of performance in support of organisational goals.'

Contests play an important role in incentive programmes, as they are often used to determine who within the company or sales team will be rewarded with the travel prizes on offer. For this reason, those on incentive trips are often referred to as 'incentive travel winners' or 'award winners'. This type of reward often takes the form of group travel - participants travel with other award winners, and often with their own spouses or partners.

Incentive programmes typically involve special entertainment, food and beverage functions, and either spectator or participative events, such as visits to a theatre or rafting or shooting. They may also include an actual work element, such as a conference or seminar, or simply a visit from a member of the company's senior management team who gives the participants a congratulatory pep talk.

Although most of these elements characterise the vast majority of incentive trips, there are differences of detail between national markets. In some developing mar­kets (e.g. India), the incentive travel award may be a simple, off-the-shelf package or even an airline ticket, possibly with some accommodation thrown in. A not insignificant proportion of the US incentive travel business is in the form of indi­vidual incentives (e.g. for couples or foursomes), using an incentive travel package in much the same wa^ as a catalogue or merchandise item (BTF & BTAC, 1999). However, the more triaitional form taken by most incentive travel awards is that of group travel and a made-to-measure programme of activities and entertainment.

The effectiveness of incentive travel

Widely recognised as a useful management tool, incentive travel is generally considered to be an effective means of rewarding and motivating employees. Its effectiveness can be explained partly by its popularity with the award winners themselves. Experience suggests that no matter how frequently participants travel on business as part of their job, incentive travel is still regarded by them as a highly desirable prize.

However, travel prizes arc clearly not the only method available to management as a means of motivating their workforce to achieve corporate objectives. Alternative performance-related rewards that companies may extend to their highest-achieving staff include:

• cash bonuses

• vouchers or merchandise awards

• profit-related pay schemes.

O'Brien (1997a) has estimated that only one in four major international corpor­ations uses incentive travel programmes to reward their personnel. As incentive travel programmes tend to be funded from companies' sales or marketing budgets, this means that they have to compete internally for funding against other sales and marketing projects as well as against the other types of motivational tools mentioned above. What arguments can be advanced to demonstrate the advantages of using travel as opposed to the other forms of reward? There are advantages to both the employer and the employee.

Advantages for the employer

Witt et al. (1992) described typical objectives that companies may have for their involvement in incentive travel programmes:

• To facilitate communications and networking opportunities, particularly with company executives.

• To foster corporate culture and social interaction.

• To generate enthusiasm for the following business period.

• To foster loyalty to the company.

It can be argued convincingly that most of these objectives are attained more easily through rewarding staff with a group incentive trip than by simply supple­menting their salary by the equivalent cost of the trip. The camaraderie and company loyalty generated by" the. trip and its shared memories can go far in strengthening participants' positive feelings towards their employer. Through participating in an incentive trip, colleagues, who may in the workplace be in competition with each other, are able to relax together and generate a measure of team spirit.

The highly visible aspect of incentive trips also gives them the potential to motiv­ate the nun-winning section of the workforce after they have taken place. This can happen when the award-winning employees return to their jobs with fascinating descriptions of their incentive trip; other colleagues are, as a result, stimulated to strive harder to win the next incentive prize. For the company, this represents a last­ing benefit that would not arise from simply giving the most productive members of staff a cash bonus, for example, since the recipients would be less likely to discuss that type of reward at any length with their colleagues.

Advantages for the employee

As well as meeting the company's objectives, travel as a reward also owes much of its effectiveness to the fact that it has the potential to respond to some of the individual employee's own intrinsic needs. For example, unlike many other rewards, a travel prize has a considerable amount of trophy value attached to it. Social status is increased, not only because the winner is recognised as a top salesperson, but also because he or she may be one of the few who have experi­enced the unique award, such as staying in a medieval castle in Scotland or visit­ing a particular foreign country. It has been argued by the supporters of incentive travel that any reward giving this type of recognition to its recipient provides a long-lasting, positive reinforcement, an element that adds to its motivational value.

For example, it has been suggested by Ricci and Holland (1992) that, foe the indi­vidual, an incentive trip has the potential to harness each of the four categories of travel motivation described by Mclntosh (1984):

• physical motivation (rest, health, sport, etc.)

• cultural motivation (the desire to experience other cultures)

• interpersonal motivations (to meet and visit people]

• status and prestige motivators.

It is clearly upon the fourth category of travel motivators that incentive travel builds most strongly. The enhanced attention and status accorded to award winners fulfils a basic need for recognition and acceptance.

Another advantage for the award winners, it is often claimed, is greater accept­ance by their partners and other family members of the additional time and effort that must be worked in order to achieve the award. When family members also go along on the trips, there can be greater tolerance for the long hours needed to achieve a reward. This point will be developed further in the later section on the organising of incentive programmes.

With so many benefits arising from its use, the effectiveness of incentive travel as a motivator is not in doubt. However, commentators differ on the question of whether travel is always the most powerful motivational tool available to employ­ers. While some (e.g. Wilt et at., 1992; Hastings el al., 1988) have concluded that travel-based incentives are more effective at motivating employees than other forms of reward, others are much less convinced that this can be demonstrated unam­biguously in quantitative terms.

Buyers

It is important to distinguish here between those who pay for the trips, the companies, and those who go on incentive trips, i.e. the award winners who are the end consumers.

Looking at buyers in terms of industry sectors, there is little change from year to year in who constitute the biggest spenders on this form of business tourism. In general, the major buyers of incentive programmes remain as they always have been: the automotive, financial services, pharmaceutical, office equipment, electronics and consumer durables sectors (The European, 1995). The fact that these industries all operate in extremely competitive sectors, where maintaining or increasing market share demands constant exhortations to greater efforts on the part of the salesforce and management, makes these types of business the natural consumers of the vast majority of incentive trips.

The trade magazine, Conference & Incentive Travel, carries out regular surveys in which UK-based incentive travel agencies are asked to name the industry sectors that provide them with the most business. The results of one such survey are shown in Figure 4.1. In terms of end consumers, an earlier survey found that sales staff and dealers account for 80% of business for the agencies, confirming the overwhelming use of this type of award with those selling their companies' products and services (Twite, 1999).

Considering the main buyers in national terms, it is the country that first used travel to motivate employees that still consumes the most incentive travel products. The origins of incentive travel as a modern motivation tool are attributed to the US company National Cash Registers of Dayton, Ohio (now part of AT&T). In 1906, the company awarded 70 salespeople diamond-studded pins and a free trip to com­pany headquarters. In 1911, the winners got a free trip to New York. (Ricci and Holland, 1992). It is back to those humble trips that today's multimillion-dollar incentive travel industry may trace its genesis.

Today, the US incentive travel market remains the largest in the world, and it is still recognised widely that the major trends and developments affecting incentive travel tend to originate in the USA and then spread to other countries.

Europe is the next largest user of incentive travel, although this motivational tool did not cross the Atlantic until the 1970s, being used first in the UK and then about ten years later in continental Europe. Most of the European incentive travel market is still generated by the UK, followed by France, Germany and Italy. Nevertheless, the Scandinavian countries, Austria, Belgium and Spain are all fast developing as outbound incentive travel generators.

However, even between individual European countries, there are a number of interesting differences in the ways in which incentive travel is used. O'Brien (1997b| points out two of these. First, whereas the French, Italian and German incentive travel industries have always capitalised on their own domestic destinations, the UK domestic market is relatively small because many UK companies do not regard the home market a-s ah. appropriate destination for their major incentive programmes. .

Second, in the case of the Scandinavian countries, O'Brien notes that the elitism implied by incentive travel goes against the work ethos, particularly in Sweden. Consequently, when travel is offered as an incentive, the award tends to be offered to practically everybody in the company and resembles more a company outing rather than an incentive trip.