Travel Incentives For Smaller Budgets

Even if you can’t afford to whisk your top performers away to Europe on a private jet, you can still reward your employees with incentive travel that they can enjoy.

Incentive travel can be group or individual. If you can afford to send your team away on a teambuilding retreat, it doesn’t have to be far away. Campsites and resorts, even a day on a chartered boat can create a memorable experience. For individuals, it’s a better idea to send your recipient somewhere exotic enough to be memorable. If possible, allowing a spouse or children to accompany your employee is also a good idea.

An employee incentive getaway generally lasts from three nights to a full week, but weekend getaways can also work for smaller budgets. Accommodation could be in a bed and breakfast. Check travel and hotel websites often to catch their “travel best bets.”

9 Keys For Fair Employee Recognition Programs

When you run an employee recognition program, you want to make sure that it motivates all employees to perform at their best, not create more problems like rumors about favoritism or unfair rewarding processes. The following tips can help you avoid water cooler angst:

1. Establish set criteria for what contribution or performance improvements, behaviors and actions are considered rewardable.

2. Create a program where all employees are equally eligible for recognition within a given department, branch or managerial level.

3. Make sure employers and employees both understand what actions and behaviors are considered in the evaluation and reward selection process.

4. Award all employees who meet the criteria or performance standards.

5. Recognize successful employees as soon as possible after the behavior or action is performed as to reinforce the good behavior.

6. Avoid systems that allow management to select winners based on anything other than performance criteria.

7. Avoid criteria that is overly subjective in nature such as “friendliness.”

8. Provide ongoing opportunities for other employees to succeed in the program.

9. Provide feedback for all employees under evaluation on a regular basis.

How Are Corporate Travel Incentives Taxed?

For employees, corporate travel awards are generally treated as income and reported as such on the employee income statement. In the United States, a Form 1099 must be issued to any employee or non-incorporated client or customer for travel awards with fair market value over $600. Business meeting travel is nontaxable to employees, subject to the definition of what constitutes a business meeting, depending on which jurisdiction one is in.

Corporate travel incentives can be deducted by the company if th purpose of travel is for a business meetings within the United States and some parts of the Caribbean, excluding foreign-flag cruises.

The FTC forbids making purchase necessary when offering travel awards to customers in contests or sweepstakes. Many states strictly regulate how such awards are used, including full disclosure requirements. If you are deciding to run such a contest, it is advised you seek legal counsel.

Corporate Incentive Programs and ROI

You can expect a successful corporate rewards program to motivate employees and increase morale, strengthen interpersonal relationships and healthy competition, and improve customer goodwill. But without a postive return on investment (ROI), corporate incentive programs will not be sustainable. The following are tips for planning your corporate incentive program to maximize ROI.

1. Determine Whether Your Incentive Program is Measurable or Immeasurable.

Measurable incentive programs are funded by cost savings or incremental sales increases as a result of the incentive program. A benchmark cost is typically 5-10% of incremental sales or cost savings to cover the total cost of the incentive program. (Administration and cost of awards included, with 75-80% allocated to award cost).

Immeasurable corporate incentive programs are more difficult to estimate costs for. These may be awards for length of employment or for non-sales recognition. Any incentive program that does not ultimately increase revenue would be considered immeasurable. In this case, a good rule of thumb is to devide the recipient’s annual salary by the number of months the incentive program is in effect. Determine your
award pay out based on the following:

6-8% of recipient income for programs one to five months in length

Or

3-5% of recipient income for programs six months to two years in length

Establishing specific figures helps create executive buy-in for your incentive program propoal and ensure that your program is reasonable given your financial resources.

If you are considering a travel incentive program, click on the hyperlink.