Promoting, protecting, and researching the optimal use of incentives, rewards, and related promotions in business.

Activities

The Incentive Federation was founded in 1984 as an alliance of associations involved in various aspects of the incentive field, encompassing rewards, recognition, promotional products, and related promotions.

Originally founded to focus on government affairs, the Federation continues to lobby state and federal governments and agencies to protect the field. It has been successful at providing constructive input into tax laws related to the treatment of qualified noncash rewards, in helping OSHA see the benefits of safety incentive programs when writing related regulations, and in helping federal regulators understand that financial institutions have legitimate uses for premiums and incentives.

Since its founding, the Federation has expanded into three related domains: Corporate outreach, through its support of the Incentive Performance Center, the industry's major outreach group, education, and research through its administration of bi-annual industry studies and through its support of the Forum for People Performance Management and Measurement, affiliated with the department of Integrated Marketing Communications at the Medill School at Northwestern University.

Promoting: The Incentive Performance Center

Just as the industry benefits from having a centralized legislative affairs arm, it has gotten significant mileage out of the Incentive Performance Center, the industry's collective public relations and outreach arm. By pooling resources, the associations receive the benefit of a dedicated PR staff that knows our industry and the key messages.

The IPC provides the public relations support for industry research conducted by member associations, manages and markets the not-for-profit industry portal at http://www.incentivecentral.org, and develops overall messaging related to more effectively marketing the field.

When it was founded in September 1998, a primary goal was to expand usage of incentives, rewards, and recognition programs by enhancing respect for their usage and promoting their virtues. The IPC started by identifying a message that would resonate with business and media: the connection between the issue of people in business (including both customers and employees), the issue of performance, and the solutions related to incentives, rewards, and related promotional products and services. It then developed a Web site and promoted a series of research projects for member associations focusing on this connection.

Non-cash rewards and recognition are now used not only for salespeople, consumers, and dealers, but for employees as well—with well over 80 percent of companies using noncash rewards for employees, according to the latest Society of Human Resources Management research.

The IPC will be heavily involved in expanded corporate outreach efforts in the coming year.

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Protecting: Legislative Activities

Federal and state legislation can have a significant impact on the conduct of business in any field, especially the incentive and related promotional fields. How the federal and state governments tax incentives, and how they regulate promotions or employee reward practices can either positively or negatively affect the business. The Incentive Federation supports the best practices in the field and the highest ethical standards to motivate customers and employees. It stands vigilant to make sure that legislatures or regulators recognize the value of properly constructed programs, favor them when possible from a tax or regulatory point of view, or at the very least do nothing to impede their proper use.

Critical issues include:

  • Tax or regulatory issues related to incentive, safety, or promotion programs
  • Gift cards legislation involving escheat consumer protection
  • Statutes or regulations affecting promotion marketing
  • Contests and sweepstakes legislation and regulation at the federal and state levels

The Incentive Federation Update newsletter keeps members informed about latest regulations affecting the field.

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Researching: Industry Studies and Research

Industry Studies

Since the beginning of this decade, the Federation has been the primary producer of research on the incentive field, conducting biannual surveys of corporate end-users and industry practitioners to identify trends and prevalent practices. The studies receive wide publicity and are available at Incentivecentral.org.

Here's an outline of the available studies and direct links to the complete reports:

The Forum for People Performance Management and Measurement

When it developed its message related to people, performance, and effectively used incentive, rewards, and promotional programs, the IPC recognized the need for more research to better understand the intuitive premise that engaged employees can equal more engaged customers, which in turn can provide greater financial results.

The Forum was launched and in part funded by the Federation to:

  • Determine to what extent this connection exists, both by looking at research already conducted and conducting new research;
  • Determine the best practices related to making the connection and measuring the results;
  • Develop a more formal means of implementing these practices, based on research;
  • Develop a curriculum for providing training on this subject at all levels, from the C-suite, to the managerial level, to the world of academics.

Among the Forum's key contributions:

  • The creation of scientific research documenting the financial connection between engaged employees, satisfied customers, and financial performance, both in terms of profitability and even long-term share performance of publicly held companies.
  • Identification of a previously under-studied link between organizational and "brand performance," and employees who interact with customers as well as back-office and production employees.
  • The creation of research documenting the role of various types of communication programs, including rewards and recognition, when it comes to making a better link between employee engagement, customer loyalty, and profitability. 
  • The development of a framework for both studying and implementing People Performance Management and Measurement.
  • The foundation for an eventual curriculum for both corporate and academic education.

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