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Enhancing Incentives Through AI

As interest in using artificial intelligence continues to grow, recognition and rewards leaders are searching for ways to best leverage the technology to support their programs.

By Maggie Mancini

Though the use of artificial intelligence (AI) by rewards and recognition professionals is still largely in its early stages, interest in and use of the technology is steadily growing, according to a recent report from the Incentive Research Foundation (IRF). Discussions and debates on the topic of AI solutions for employee rewards and recognition can be seen all over the industry, as leaders seek to find ways to best leverage the technology to help support their organizational needs.  

The report finds that incentive professionals are primarily using ChatGPT and other large language models to increase the efficiency of their market, writing, and data analysis. For many, the technology provides opportunities to increase efficiency and focus on more strategic tasks. It can also be helpful for drafting communications and analyzing data, the report finds.  

While many incentives leaders view AI as the next phase of a larger technological journey, others are hesitant to fully implement the technology due to privacy concerns. Despite their hesitation, many executives still recognize the benefits associated with AI and understand that it’s important to get past that hesitation and find ways to familiarize themselves with AI, according to the report.  

“There are a couple of opportunities for leaders to support the use of AI in organizations,” says Stephanie Harris, president of the IRF. “Establishing guidelines for use is an important step. Employees may be hesitant to use the tool if they are unsure of company policy regarding the use of AI, so having clear guidelines can help give them confidence to experiment with the tool.”  

She explains that it’s important to encourage individuals to establish an account and play with the tool by giving them exercises. One of the study participants notes that she would give simple exercises during team meetings—like asking employees to use AI to put together a four-day itinerary in a specific destination—to help them gain insight into the kinds of prompts that produce the best results. 

A few respondents—many of whom work for larger organizations or corporations—reveal that their company has policies in place regarding the use of AI. Smaller organizations, however, tend not to have formal policies in place other than urging caution around uploading any documents with proprietary information, the report finds.  

Additional research from Deloitte finds that that organizations are increasingly planning to hire AI ethics researchers, compliance specialists, and policy analysts to ensure that they are deploying AI thoughtfully and keeping the entire organization aligned on how to use the technology.  

Within the recognition, rewards, and incentives industry, the report finds that it’s important for suppliers and clients to have detailed discussions around the expectations and use of AI within their programs to avoid conflicts and confusion surrounding applications and disclosure of AI.  

As more incentives organizations begin to incorporate AI into their program design, they are tasked with addressing workforce demands and the increased desire for personalization and custom rewards. Business leaders are increasingly looking to incentives professionals to provide data on the effectiveness of investment in employee recognition and rewards, the report finds.  

“To identify effective reward structures for their participants, organizational leaders can provide AI with statistics about their group and their goals,” Harris says. “By giving AI the profile with aggregated data around job roles, age groups, history of earning, past incentive structures offered, and current goals, AI can suggest other program structures.”  

By following up on that recommended structure by asking for enhancements, participants can enable AI to deliver on personalization and customization that will yield additional insight and suggestions, Harris says. This is because AI is a conversation—leaving room for follow-up questions and refinement often nets the best result, she says.  

Since employee recognition programs tend to be internal, there are many possibilities for incorporating generative AI. In many cases, program administrators can run data through the recognition system to gain insight into ways to improve the program. The report also provides several recommendations for applications of AI in recognition programs, including the following: 

  • determining recognition styles of individuals; 
  • communicating recognition program details; 
  • crafting peer-to-peer nominations; 
  • seeking employee feedback on the recognition program; 
  • helping managers write personalized thank you notes; and 
  • helping employees navigate recognition platforms to increase ease of use.  

When it comes to enhancing rewards programs with AI, the report finds that rewards that are more personalized to the recipient are more likely to have a major impact on them. By asking questions, an AI-driven rewards engine could provide tailored recommendations for merchandise to help incentivize employees to redeem their rewards.  

“Within third-party organizations, AI is being used for faster analysis of performance within programs and suggestions for rules structure enhancements to help achieve program goals,” Harris says. “For example, historically organizations would need to wait for analysis of data to see if programs were likely to drive the desired results. With AI, that analysis is available faster and gives the organization the information they need to adjust rules structures or reward levels early in the process to help ensure desired results are achieved. AI can also help identify unintended consequences of rules structures and eliminate those from programs as well.” 

Measurement and reporting are two of the most common areas where AI can impact rewards and recognition programs, according to the report. Using AI to run and administer survey materials can help streamline the feedback process and analyze datasets for key information that can be used to improve the program.  

Still, staying vigilant about privacy and keeping proprietary information safe from generative AI software is essential to thoughtful deployment of the technology to support recognition, rewards, and incentives, the report finds. Harris says that setting clear guidelines for the use of AI should be the first step an organization takes, outlining what data can and cannot be used. No proprietary or personally identifiable information should ever be used, particularly when using OpenAI, she says. Even on paid platforms, it’s important for organizations to have specific guardrails for what information is provided to AI engines.  

“AI is an important tool for the incentive industry,” says Harris. “In an environment where we are eager to show program value, and where many are challenged by flat budgets and constrained resources, AI can help identify opportunities and spark ideas that help incentive professionals maximize the opportunities non-cash incentives present for organizations. It all starts with a simple conversation with the AI, so I would encourage people to start simple and give it a try.”  

Tags: AI, Current Features

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