Should Companies Cancel Incentive Travel During a Recession? Executive Oasis International Provides Strategies for Rewarding Top Performers Even During Tough Times

Toronto, Canada, February 10, 2009 --(PR.com)-- Whenever there is an economic downturn, many companies cut incentive travel and other non-cash incentives. This is short sighted. When times are tough, it’s much more difficult for sales professionals to “make their numbers”. It’s even more important than ever to have strong incentives to motivate your team and reward top performers.

If a company is performing well, there is no better time to schedule an incentive trip than during a recession. Even 6 and 7 star resorts in Dubai are now offering special rates. These bargains will disappear when the economy picks up.

Incentive Travel Pays for Itself

Incentive travel is particularly effective because it pays for itself. How? Incentives are given at the end of the year After successful results have been produced. For incentives to be effective, careful planning is needed.

At the beginning of the fiscal year, companies should:

- set targets, the minimal level of financial performance both in terms of profits and earnings per share

- identify the level of sales that each business development team member needs to attain for the organization to meet its target

Individuals should qualify for the incentive based on 2 criteria:

- the company's level of performance
- the individual's level of performance

Why companies Cut incentive travel

So if incentive trips pay for themselves, why do companies tend to eliminate them when the going gets tough? The answer to that question is complex but part of what is going on right now is “the AIG effect”. Some of the companies that received bailout money in 2008 have still organized luxury junkets and lavish corporate events. They seem to have forgotten that incentive trips and luxury corporate events are rewards for Exceptional performance, not an entitlement to be bestowed even when there is failure of epic proportions. We’ve all read the headlines about AIG, Bank of America, Wells Fargo and Morgan Stanley.

The poor judgment of some organizations and the risk of negative publicity is now making even organizations that are doing well nervous about spending ANY money for incentives. This is throwing the baby out with the bath water.

When Companies Have Earned the Rewards

When through sheer hard work and determination, sales professionals and executives have beat the odds and produce outstanding results, they deserve to be rewarded. However, it is important to make the rewards proportional to individual and company performance. One size does not fit all and it should not have to. For example, if some members of the team have gone above and beyond the call and a company is still struggling, by all means reward them. However, this is not the time for gambling junkets or stays at lavish resorts. Keep it simple. A dinner at a really nice restaurant for the team members and their spouses would suffice for this year. Then, the organization should take a portion of the money that would normally be spent for an incentive trip and invest in consultants and business facilitators with a proven track record that can help get the company back on track.

When companies are doing well, they shouldn't be afraid to pull out all the stops. It's important to reward employees who have gone the extra mile and produced exceptional results. Showing appreciation for your clients is also critical. This will encourage them to do even more next year. The key is for organizations to also ensure that they are doing their share in terms of giving back to the community and contributing to local charities.

Setting up a simple matrix to determine the non-cash incentives and corresponding dollar value of the incentive to which each member of the team will be entitled will be helpful.

PR departments should also ensure that the word gets out about company’s outstanding performance and the success strategies that produced results. Heaven knows, everyone could use some encouraging news in this tough economy.

Incentive Travel: A Triple Win

Incentive travel and events such as awards galas can be viewed as a triple win. The company wins because a motivated team produces higher results. The individual sales professionals win as they reap the rewards of their efforts and receive recognition from their peers. The economy also wins. For example, a local banquet will provide work for:

- event planners
- restaurants, caterers or banquet halls
- transportation companies
- grocers
- hairdressers and barbers
- entertainers
- AV companies

Overseas incentive trips will also produce work for:

- airlines
- travel agents
- pharmacies
- luggage stores and manufacturers
- airport stores
- hotels and resorts
- dry cleaners
- uniform supply companies
- florists
- tour operators
- local attractions

....and so on...and so on.

If companies are doing well, they shouldn't be afraid to splurge. They shouldn't be criticized for rewarding employees who have worked hard and earned recognition. In the process, they are also helping the economy.

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