Why are experiential rewards so successful for motivating & engaging staff?
We’re glad you asked!
We create positive memories and associations when we experience something new, fun or exciting and corporate travel rewards and experiences allow us to offer employees the best type of memories, linked to their work. The positive association is tied back to the employer who made it happen.
Traditionally, places on incentive trips were ‘won’ based on sales performance however more savvy companies realise that the benefits of company-wide trips and awarding places to employees achieving business objectives measured by other metrics (other than sales) should also be carefully considered to gain maximum business benefit.
It's not only the memory, that will make people work harder for the chance to attend a company incentive trip. It’s the chance to spend time with management out of the office environment. It’s the chance to build stronger relationships with peers. It’s the chance to be publicly recognised as a high performer and valued employee. If a company offers extraordinary experiences to employees on a regular basis then the risk of missing out on this in the future will even be front of mind when people are weighing up the possibility of moving on to new pastures.
Research from CEB/Gartner uncovered something interesting about what actually drives employee behaviour when it comes to rewards. We've long known that rewards need to be relevant and meaningful to motivate people, but this research managed to find an actual monetary figure on that meaning.
Recent research found that bonus pay-outs for top employees need to be at least 50% higher than pay-outs for the average employee to be seen as meaningful, and therefore change behaviour. They also found that financial rewards of less than $100 had hardly any impact, but once that $100 boundary was passed, the impact started to fall again. The conclusion? It's the perception that the reward is meaningful, rather than the cash value of the reward itself, that matters.
It's clear to see how, if you're handing out cash bonuses, there's a fine line between motivating staff and having no effect at all and therefore being a waste of money. Experiences, on the other hand, have far more potential to create meaning for employees as they create memories, build relationships and provide public recognition among colleagues (and the recipient’s friends and family who will enjoy the social feed from the trip, no doubt).
And of course there are millennials. They really are the future of our workplaces. It’s no surprise that they're really into experiential rewards. New research has found that 84% of people in the millennial age bracket are motivated by experiences as rewards.
Whether it's a chance to fly over Victoria Falls, paraglide in Rio, swim with whalesharks, sleep under a blanket of stars in a private camp in Morocco, marvel at the Northern Lights from igloos, go to your favourite music festival, drive a supercar on a famous race-track, cycle a spectacular mountain pass, summit a mountain, work alongside locals at a charity project in Africa, have a coaching session with an inspiring business leader or eat at a restaurant that’s impossible to get into and has been on your wishlist forever, an experience can offer your employees something that they may be unable to access on their own that will enrich their lives and potentially transform them forever.
There's no two ways about it, the cost of living is increasing. Your employees are having to divert more and more of their hard-earned salary to bills, food and mortgage payments or rent.
You might think that financial rewards are perfect for a time like this. When money's tight, surely more money will help? Well, not always as much as you might think. Bonuses get eaten up by tax and whatever's left just goes into the bank account, getting spent on utility expenses like rent and mortgages.
Experiential rewards, on the other hand, allow your employees to do something they love without the guilt of what it cost. Whether it's ticking off a bucket list experience on an overseas adventure, or a money can’t buy experience locally, these rewards sit outside of the weekly or monthly budget and their value can far exceed the monetary investment.
Better yet, experiential rewards obtained through a well-connected supplier (like 33 Degrees!) means the value is greater than what a cash reward would buy after tax.
No matter the age or interests of your team, experiential rewards tailored to their interests are effective because they give people the chance to create shared memories and it's the anticipation of the experience and the actual memory of an experience that influences behaviour, rather than the actual experience itself. It doesn’t hurt that the recognition is far more highly visible to their peers than a cash bonus too.