Glossary of Incentive Industry Terms

 Attendance Program:

Promotion designed to reduce employee absenteeism and increase productivity.

 Award:

An award granted for merit.

 Awards Budget:

The amount of money specified for awards to participants in incentive programs.

 Closed-Ended Programs:

Incentive programs that have a pre-determined number of award earners.

 Consideration/Purchase:

What an entrant must do to participate in a contest; can be monetary or non-monetary. For example, a customer must buy the sponsor’s product and show proof of purchase with entry, or the customer must answer survey questions to qualify for entry.

 Consumer Incentives:

Motivational products targeting consumers.

 Content Theories:

Motivational theories having a focus on the factors within a person that energize, direct, sustain and stop behavior. They look at the specific needs that motivate people.

 Contest:

A competition based on skill in which prizes are offered. A game in which chance is eliminated and winners are chosen according to predetermined criteria or skills, such as reaching a sales goal.

 Continuity Program:

A program designed to offer an incentive to an individual that encourages her or him to return to do additional business such as a frequent flyer mileage.

 Dealer Incentive:

Premium or other reward given by a manufacturer to retailers or distributors in return for a specified bulk purchase.

 Dealer Loader/Display Enhancer:

Merchandise designed to motivate dealers and distributors to purchase larger quantities of product than they traditionally buy. Usually includes a point-of-purchase display.

 Employee Incentive:

Motivational product targeting an employee of a sponsoring company.

 Expectancy Theory:

Looks at how likely it is that the performance and outcome will occur. An individual makes voluntary choices about: (1) whether the job can be accomplished, (2) whether the outcome will occur as a result of performing and (3) whether the outcome will be desirable.

 Extinction:

Decline in response rate due to non-reinforcement.

 Extrinsic:

Rewards that are external to the job, i.e., pay, promotion, fringe benefits or tangible awards; or rewards that are administered by someone else.

 Gift Cards:

Plastic cards with a magnetic strip and/or bar code preloaded with a dollar or point amount. They are generally available in two types: (1) those that carry a major credit card brand and are redeemable at any merchant accepting the brand; and (2) merchant-specific cards, such as those issued by well-known retailers, which are redeemable only by the issuing merchant.

 Gift Certificates:

Vouchers with dollar or point values embossed on them. They can be personalized with the recipient’s name and giver’s logo.

 Gift Checks:

Sometimes synonymous with gift certificates, gift checks usually refer to money orders issued by banks or credit card firms.

 Goal:

A purpose toward which an endeavor is directed; an objective. A destination or state to be attained. Something that an individual, team, or organization is consciously trying to attain.

 Group Incentive Travel:

Qualifying meetings and incentive trips held in especially appealing destinations, usually targeting salespeople and resellers. It is among the most potentially powerful in terms of impact but also among the most logistically complex.

 Incentive System:

An organized program of rewards and/or recognition offered for the purpose of motivating employees in specific ways. Attributes of an incentive system include intentionality (deliberately developed with the intention of influencing employee performance); externality (devised and administered by agents external to the employee or employee group); standardization (applied in a clearly defined manner that specifies employees affected by the incentive system, the nature of the incentive/s and the rules for attaining specified rewards).

 Incentive:

Objects or events that are valued, which incite to action or effort. Something valued by an individual or group that is offered in exchange for increased performance. A stimulus or condition that exists in an organization with the expectation of directing or influencing the behavior of organizational members.

 Incentive Federation:

An alliance of incentive product manufacturers, industry suppliers, and associations.

 Incentive Motivation:

The characteristics of the goals one works to obtain will influence his/her behavior.

 Incentive Program:

A planned activity designed to motivate an individual to achieve predetermined organizational objectives.

 Incentive System:

The program by which incentives are offered for the achievement of work goals and assessment procedures are identified and explained. The four types of incentive system formats or schemes are: quota, piece rate, tournament, fixed rate. Also, open-ended, closed-ended, and plateau type programs.

 Incentive Travel:

1. Any form of face-to-face event designed to motivate, either directly or indirectly. This includes the traditional definition of a formal, qualifying incentive program that offers incentive travel as one or all of the awards. It also includes any motivational use of a face-to-face event to accomplish a business objective—distinct from meetings designed to get work done and communicate routine information. 2. Packaged programs for individuals and significant others, used in every type of program from employee recognition to consumer sweepstakes and contests.

Intrinsic:

Rewards that are part of the job itself, i.e., responsibility, challenge and feedback; or rewards that are self-administered.

 Motivation:

An incitement to action.

 Open-ended Programs:

A type of incentive program that enables all people who achieve program goals to earn awards.

 Plateau Programs:

A type of incentive program that provides awards at different levels of program achievement.

 Points Program:

A type of incentive program where participants collect and redeem points for awards. Points programs also apply to reloadable ("Stored Value") gift cards.

 Positive Reinforcement:

Anything that increases the strength of response and induces repetition of the behavior that preceded the reinforcement (adding something positive).

 Process Theories:

Theories of motivation that provide a description and analysis of how behavior is energized, directed, sustained and stopped.

 Premium:

Merchandise offered free, generally to induce an individual to buy a product.

 Prize:

Anything of value awarded to winners, even if the value is nominal.

 Reward:

To recompense. An item given to an individual or team for meeting a pre-determined goal. (Sometimes cash-based).

 Recognition:

An "after the fact" display of appreciation or acknowledgement of an individual's or team's desired behavior, effort, or business result that supports the organization's goals and values.

 Safety Program:

Promotion designed to motivate employees to work safely, or drive safely, in their work environment.

 Sales Incentive Program:

Promotion designed to motivate salespeople to sell a specific product during a promotion period, or achieve a certain percentage of sales increase in a time frame.

 Self-Liquidating:

The money expended for the product equals the amount of money received for the product.

 Service Award Program:

Promotion designed to reward employees for length of service to the company.

 Utility Value:

The perceived benefit of completing a work task. When work tasks are not themselves valued highly, people often weigh the benefits of completing the task or avoiding the punishment involved in avoiding a work task.

 Value-Added:

Merchandise that includes something of value designed to encourage an individual to choose one product over another.

 Virtual Certificates:

Many gift certificates can be delivered via e-mail directly to the recipient’s mailbox, saving time and the expenses of printing and delivery. The "virtual certificate" can contain a link to a Web site where recipients can select and claim their rewards.

 Vouchers:

Certificates bought by or given to consumers that can be applied for discounts on travel packages.