Perhaps the most rigorous survey ever of motivation research reports impressive results from incentive programs, but notes that "most organizations lack the knowledge or will to create properly constructed programs that yield desired results."

The study incorporated a meta-analysis of dozens of academic research projects related to business incentives, along with a detailed survey of business users. Some of the key findings:

Incentive programs improve performance. Properly constructed incentive programs can improve performance by as much as 44 percent in teams and 25 percent in individuals.

Incentive programs engage participants. When first asked to perform a task, a 15-percent increase in performance occurs. Asked to persist toward a goal, people increase their performance by 27 percent when motivated by an incentive program. When business incentives are used to encourage "thinking smarter," performance increases by 26 percent.

Incentive programs attract quality employees. Organizations that offer properly structured incentive programs can attract and retain higher quality workers than other organizations.

The study isolated five conditions under which incentive programs work best:

1. Current performance is inadequate.
2. The cause of the inadequate performance is related to deficiencies in motivation.
3. The desired performance type and level can be quantified.
4. The goal is challenging but achievable.
5. The focus on promoting a particular behavior does not conflict with or override everyday organizational goals.

The study provides an eight-step Performance Improvement by Incentives (PIBI) model, outlining the elements of a successful program.

"Incentives, Motivation, and Workplace Performance," University of Southern California, University of Central Florida, and Harold D. Stolovich & Associates, on behalf of the SITE Foundation and the International Society for Performance Improvement, 2002