Corporate Incentive Programs that Pay It Forward

In honor of Pay It Forward Day, we want to ask you to think more deeply about your corporate incentive programs.

Many companies spend a lot of budget on rewards-based programs to boost performance. The theme? Meet your goals and we’ll give you a reward or bonus. But the stats show they’re not doing much for engagement.

What does work? An employee experience system that lets employees give back to each other and the community.

The science shows that empowering your employees to pay it forward can pay you back. Employees are more engaged. Teams perform better. And the study results show that you get a better ROI on your investment in corporate incentive programs.

The Science of Paying It Forward

In the study Prosocial Bonuses Increase Employee Satisfaction and Team Performance a team of researchers asked an interesting question: what happens if we set up corporate incentive programs where employees get “prosocial” bonuses (meaning bonuses given to other people or a cause) instead of direct “personal” bonuses?

They did a controlled experiment with Australian bankers, Canadian pharmaceutical sales teams, and Belgian sports teams. The bankers were broken up into groups that were either given a personal bonus or asked to pick a charitable organization to get the same amount of money. The “prosocial” sales and sports teams were asked to spend their bonuses on their teammates, and their performance was measured against groups who got bonuses directly.

The results?

Taken together, our studies show that when organizations give employees the opportunity to spend money on others – whether their co-workers or those in need – both the employees and the company can benefit, with increased happiness and job satisfaction and even improved team performance.

The difference was noticeable. When they calculated the results for sales teams, for every $10 given to a team member to spend on themselves, companies got just $3 back. That’s a 70% loss on a personal bonus. In sharp contrast, for every $10 given to a team member to spend making another team member happy, companies reaped $52. At a $42 gain, that’s a 420% return on investment for paying it forward.

That’s right – giving the sales team money to make a co-worker happy (paying it forward!) was more effective than giving them money directly.

Sports teams had similar performance gains. And the bankers who got to give $50 to charity had a measurable boost in job satisfaction that their co-workers didn’t.

“Prosocial” Corporate Incentive Programs

We didn’t sponsor that study – although we probably should have. The Kazoo platform was built to enable employees to thank each other and pay it forward every single day.

We’ve taken our expertise and customer experience and put together a guide with 10 ideas you can use to encourage your employees to give back. Some of them include:

  • Volunteering as a group
  • Covering each other’s shifts
  • Saying a timely thank you

To get more ideas for embedding prosocial behavior and bonuses into your culture, download our guide: 10 Pay It Forward Ideas for Employees. (A tip — many of them are free!)

This way, you can shift your budget away from less-effective corporate incentive programs to an effective approach that empowers your employees to pay it forward.