Do Travel Compliance Incentives Make Sense for Your Company?
Should you implement incentive programs for your employees? Probably not.
Employers have debated for decades the pros and cons of various employee “motivation” methods. That discussion now permeates the corporate travel world, as travel managers and those responsible for accounting and finance struggle to boost compliance with company booking guidelines.
Why Compliance Matters
Following the rules controls costs. Without adherence to established travel policies, lower rates negotiated by corporate travel managers do no good. Expense predictions go out the window, endangering the budget as well as future forecasting.
Ensuring compliance also supports your legal duty of care, assuring, for example, a certain level of traveler safety and security with appropriate accommodations. And requiring everyone in your organization to follow the same rules provides a sense of equality among travelers, whether they’re the CEO or an intern headed off to her first business conference. Nonetheless, companies typically focus on the cost-saving value of in-policy booking.
But compliance isn’t a thing, it is a human behavior. That makes it a People Ops issue as well as a financial issue. The premise behind People Operations is that “to hold on to your talent, you have to understand and ‘take care’ of your talent.” Your travelers are whole beings, not just business assets or “human resources,” and their travel experiences with your company directly reflect how they feel about the job and how likely they are to stay with you.
People Operations relies on data to understand employees and what drives them. You might say it’s the science side of psychology. That’s a good thing, because in order to motivate travel compliance you have to use psychology. And that brings us to the subject of how to motivate booking compliance.
Some Employers Resort to Incentives (Dare We Say “Bribes”?)
The idea is to reduce T&E spending by offering a reward for every time a traveler saves money by booking within corporate policy guidelines. It seems sensible on the surface – why not reward travelers for spending less on hotels, flights, and ground transportation? You can use the money they save your company as a “kitty” from which to pay for the incentives. Most companies that are embracing this idea are using gift cards as incentives, because they’re simple and versatile.
Does This Really Work?
Perhaps yes in the short run, but psychologists and HR experts say direct financial incentives don’t work long-term. Why? Because they really are just bribes. They have no staying power. “Do rewards motivate people?” asks Alfie Kohn, a student of rewards systems. “Absolutely. They motivate people to get the rewards.”
Direct incentives can be overtly counter-productive
- Offering monetary incentives is simple and easy. Everyone who meets the criteria gets the same reward. Incentives can be very effective at first, but over time, they become an entitlement. Heck, if employees could score a gift card every time they book a plane or a hotel or a taxi, they’ll be clamoring to travel more often, needed or not.
- Are travelers giving away needed amenities for a cheaper hotel to earn a reward, putting their own comfort and business trip productivity in jeopardy? Will the reward make up for the lousy experience? (There’s nothing you can do to recoup the lost productivity.)
- Poorly considered incentive programs can make non-travelers feel left out, since they have no opportunity to cash in.
- Using incentives can also make people feel controlled instead of self-motivated – if you have to bribe them to do something, it must be something they would not want to do otherwise. That erodes trust and job satisfaction.
Frankly, if your employees can't be convinced to cooperate any other way, perhaps they don't care enough about your company to be employees.
Direct incentives can become a can of worms
What behavior will you reward? Initial bookings only? Every major policy? Take last-minute bookings, for example – what if the trip itself was needed at the last minute? That’s not the traveler’s fault but the reward is off the table because last-minute is out-of-policy. Establishing the ground rules can give you a terminal headache, take up an amazing amount of staff time (no savings there!), and create friction and dissatisfaction rather than positive motivation.
The Harvard Business Review notes that, “According to numerous studies in laboratories, workplaces, classrooms, and other settings, rewards typically undermine the very processes they are intended to enhance.” You might see initial results, but “rewards do not create a lasting commitment.” Furthermore, “relying on incentives . . . does nothing to address possible underlying problems and bring about meaningful change.” HBR blames managers for “using incentive systems as a substitute for giving workers what they need to do a good job.” Ouch.
There’s a Bottom Line Problem as Well
In their zeal to adopt automatic incentives to motivate compliance, many companies don’t quite catch the fact that gift cards are oftentimes not included in the cost of a travel platform, but are added after the fact. The money is still coming out of the corporate pocket, ultimately.
And where’s the ROI? While you’re saving money on cheaper in-policy bookings, you’re spending the money you save (or at least some of it) on endless rounds of incentives -- gift cards or whatever else you’re giving away. Since the program is ongoing, how are you budgeting and reporting that spending? How can you, when there is no predictability?
So perhaps you’re just winging it, assuming the net will be in your favor. At least when traveling employees book at hotel room or a flight you capture that expense and it is annotated for properly in your T&E ledger. But is the money spent on gift cards flying under the radar? Your CFO is all about hard numbers. A rewards plan they can’t pin down with real numbers in real time is no reward for them. So much for their share of the corporate travel program experience.
We Have a Better Idea, Thanks
And that’s it: motivate travelers with thanks for helping your company achieve its T&E goals through improved compliance. This focuses on the outcome, not just the individual -- and that, say the experts, is the fast track to motivational success.
Gift cards do make nice rewards, but there’s a better way to use them to everyone’s benefit. For example, what if you created a program that rewarded the most efficient business traveler in the quarter with a $100 gift card? That would align with your overall business interests and not reward an employee solely for saving the company money (which they should do anyway, right?).
Why is this distinction better?
It meets the psych profile – the People Ops emphasis that looks to create a better user experience for travelers and travel managers as well as the numbers team. It fosters teamwork because “prizes” are based on more than individual behavior. It fosters greater sense of inclusion because all travelers are eligible to win and every one of them gets acknowledged for their efforts. It appeals to everyone’s better nature instead of innate greed. It helps employees see how their actions directly affect the company’s prosperity and future. That would be their future.
To truly improve organizational performance, you must reward people based on multiple measurements, not just one. What works best?
- Keep rewards small and award them with relative frequency, but not as a one-to-one event. This reinforces the correlation between the good deed and the reward without making it just a payment.
- Reward publicly, to enhance the glory and set a good example for others.
- Reward as after-the-fact thanks that surprises rather than promising, “Do this, and you’ll get that.”
Our quarterly contest idea meets all the criteria for success. Plus, you can turn it into a fun company-wide celebration.
Your travel and finance managers will be celebrating, too. This plan is a time-saver as well as a cost control benefit – nothing convoluted to administer – and the cost is not only low, it is 100% predictable. No ugly surprises in store.
Gift cards, however earned, are not a stand-alone tactic to ensure booking compliance
Of course it’s essential to stress the importance of following the company’s travel policies. But there’s more to ensuring compliance than exhortations and rewards.
- Educating employees regarding policies and processes surrounding all aspects of your corporate travel program is critical, including periodic reminders. Studies show that training significantly improves compliance.
- Studies have also shown that travelers emulate their higher-ups, so compliance starts with top leadership -- another reason to require everyone, regardless of position, to follow the same rules. Leaders that not only “walk the walk” but communicate how the company benefits from compliance exert the most influence.
- Outfitting the entire team with a simple, comprehensive technology tool that saves time and gets things right automatically can be your single-most-valuable decision. In a just-released study, 80% of travel managers said quality technology boosts traveler experience (and, by the way, traveling employee retention).
- Set policy guidelines that make sense in the first place. In that same study, 77% of travel managers cited travel-friendly policies as key to experience and retention.
- Invite traveler feedback about policies and their overall travel experiences. (Give a prize for the best suggestion of the quarter, or the year.)
If the only reason your travelers follow the rules is to get some incentive, the process becomes a vicious circle. And it’s self-perpetuating. You can’t stop because if the rewards end, compliance will, too. Remember Pavlov? His dogs learned to ring a bell in order to get a treat. No treat, no point in ringing the bell. So you’re back to square one. You’ve spent a lot of money without achieving your cost-cutting goal.
On the other hand, by creating relevant periodic contests and using random thank-you's, you can reward those who do their best without resorting to blatant bribery.