How To Fund A Travel Incentive Program
When the members of top management begin considering the implementation of a travel incentive scheme, one of the key issues that often arises and needs to be immediately addressed is the topic of budget. While some organizations have more than adequate funds for an incentive scheme, others need to carefully weigh the benefits of such a program vis-a-vis the costs.
If your business organization is mulling over the idea of implementing an incentive scheme, you can take a cue from other firms that have successfully launched theirs. Here are a few of the most common budget schemes used by business organizations.
One of the most commonly used budget schemes used by organizations which have implemented an incentive program is the self-funded or self-liquidating budget. The logic behind this budget scheme is that the winning participant should be able to generate extra profit for the business — enough to cover the award and with more than enough to spare for additional profit for the business. However, if the incentive scheme participant was not able to meet the quota to qualify for the award, he or she does not win anything. The organization, however, still ends up winning with the extra income, spending a minimal amount of money toward program design and promotion.
Some business organizations want to implement an incentive scheme in order to cultivate a healthy relationship between them and their employees or customers. However, in some circumstances, it is virtually impossible for the organization to secure additional sales figures. Some businesses work around this stumbling block by adding the incentive scheme to the overall budget of the organization. The main advantage of this funding option is that the organization can still attain its goals without relying on getting additional sales numbers.
One of the criticisms leveled against implementing incentive schemes for employees is that only the winners get rewarded while the non-winners are left behind. One way to counter this is to divide the awards into two levels. In the first level, the top performers fully qualify for the awards while in the second level, those who did not fully satisfy the requirements are still given some form of reward. For those who fall under the second category, the organization can give participants the chance to buy into the second level to reap the complete award.
The final funding option used by many organizations is called a hybrid budget. Here, a portion of the budget may be funded by the company or it may call for additional sales from the winners. On top of these, the organization may develop a two-level scheme, thus encouraging more participants.