by Lisa Grimaldi | September 01, 2010

The terms and words used within the context of an industry often change to reflect shifts within the field or to mirror current trends. The incentive industry is no exception; the language used by practitioners has expanded and evolved over the past decade to reflect broadening goals and changing attitudes.

Following is a list of key terms and definitions for the industry, based on recommendations of a 2008 task force comprised of several incentive industry associations, including the Recognition Council and the Forum for People Performance Management and Measurement, under the auspices of the Incentive Marketing Association. A more comprehensive glossary can be found at IMA's website,

Employee engagement: A heightened emotional connection that employees feel for their organization that influences them to exert a greater discretionary effort on their work.

Incentive programs
Incentive travel: Any form of face-to-face event designed to motivate, either directly or indirectly. This includes the traditional definition of a formal, qualifying incentive program that offers incentive travel as one or all of the awards. It also includes any motivational use of a face-to-face event to accomplish a business objective -- distinct from meetings designed to get work done and communicate routine information.

Closed-ended program: An incentive program that has a predetermined number of award earners and/or a fixed-awards budget.

Open-ended program: A program that enables all people who achieve program goals to earn awards and/or a format with an open-ended budget, awarding unlimited performance rewards against stated objectives.

Points program: A type of incentive program where participants collect and redeem points for awards.

Plateau programs: A program that provides awards at preset levels of achievement.

People-performance strategy: An organization's overall plan for the attraction, retention and motivation of employees.

Performance culture: A set of shared norms and attitudes relating to performance in an organization. An organization with a performance culture based on teamwork, for example, is unlikely to be fertile ground for a reward system based on competitive performance among individuals.

Performance management: A systematic approach for managing individuals and/or groups that involves planning, monitoring, appraising, rewarding and improving performance in support of the business strategy.

Recognition program: A policy of acknowledging employee contributions, possibly without predetermined goals or performance levels that the employee is expected to achieve. Examples include giving employees clocks or other gifts on milestone anniversaries, granting an extra personal day for perfect attendance or paying a one-time cash bonus for making a cost-saving suggestion.

Formal recognition: A structured program with defined processes and criteria linked to organizational values and goals, a nomination and selection process, and an awards ceremony where employees receive public recognition and are presented with awards in a formal setting. This typically is an annual program, and only a small percentage of employees are recognized.

Informal recognition: This program singles out individuals or teams for progress toward milestones, achieving goals or projects completed. Celebrations may include low-cost mementos or refreshments as a way to celebrate achievements or outstanding positive behavior. It is less structured than formal recognition and reaches a larger percentage of the employee population.