The most successful manufacturing companies don't just manufacture products. With the help of non-cash incentives and rewards, they also manufacture high-performing employees, finds a new study published yesterday by the Incentive Research Foundation (IRF).
The study -- "What Top Performing Manufacturing Companies Do Differently for Incentives and Rewards" -- is based on data from 158 manufacturing firms, 71 of which were classified as "average" performers and 87 of which were classified as "top" performers. IRF analyzed the reward and recognition practices of both in order to determine what separates top performers.
Several key findings emerged. For example, IRF found that executives at top-performing manufacturing firms receive higher levels of support for their reward and recognition programs than executives at average performing manufacturing firms. Furthermore, executives at top-performing firms were more than twice as likely as those at average performing manufacturing firms to regard their reward and recognition programs as a competitive advantage, 27 percent more likely to consider reward and recognition programs to be effective recruitment tools, and 44 percent more likely to consider reward and recognition programs as critical tools in managing the performance of the company.
IRF also observed differences in the structure of programs. Top performers, for example, are three and a half times more likely to structure their programs with the goal of recognizing or rewarding all participants, whereas average performers are three and a half times more likely to structure their programs with the goal of recognizing and rewarding only top-performing employees. Likewise, top performers are more than twice as likely as average performers to design and manage programs collaboratively across multiple departments and divisions, more than twice as likely to centralize and manage non-cash rewards activity from the top down, and significantly more likely to have a single reward and recognition program for the entire company.
Reward types are different, too: Most top performers (87 percent) use primarily award points that can be redeemed for gift cards, merchandise, event tickets, etc., while most average performers (69 percent) use primarily gift cards and merchandise.
Top and average performers use incentive travel at similar rates -- 20 percent and 24 percent, respectively -- but have different priorities. Top performers said their biggest priorities for incentive travel programs are appealing to a large audience, providing a unique experience and allow participant flexibility. Average performers, on the other hand, said their top priority is building brand loyalty.
"The [study] revealed notable differences between how top performing and average performing manufacturing companies design and administer their incentive programs," said IRF Vice President of Communications Andy Schwarz. "From incentive program design to goals to budgeting processes, top performing manufacturing firms are taking a different approach than their average performing counterparts."
The full study is available for complimentary download at IRF's website.