Archive for the 'employee awards' Category
Thought we’d bring this research from late 2012 on what gifts that adults wanted for the holidays.
It’s a little dated, but parallels more current data we’ve seen from the incentive industry. In light of all the discussion of late about employee engagement award platforms, we thought this would be helpful. Since the founding of this blog, we have been stating that gift cards are the #1 award in the incentive industry, for the fundamental reason that it’s what people want. That hasn’t changed. And when it does, don’t worry, gift cards competitors will tout that to the heavens.
In terms of what outlets these gift cards are for, this same IRF survey revealed that the largest number are for department stores at 39% followed by restaurants at 33%, bookstores at 21%, coffee shops at 18%, discount stores like Costco at 14%, grocery stores/gas stations at 13% and online retailers rounding it out at 11%.
It was interesting for us to note that when the traditional merchandise award supplier’s harangue on the main problem of using gift cards the main reasons is that they can be used for groceries and gasoline. And they are right, but 87% of the time, they wrong! Frankly it really shouldn’t make much difference to the incentive planner; the participant has to perform in order to receive the award. There are some schools of thought that think you should let them have what they want anyway. Who are we to determine those preferences?
We go a little “nutso” every time someone in the incentive/award industry uses the word “gift” when they mean an “award”. If you are conveying a gift to someone, they didn’t have to do anything to get it, that’s why it’s a gift. If you are presenting an award to someone, that person actually earned the right to receive that award.
Now let’s go a little deeper into the world of employee recognition and incentives. Frankly there is a part of the incentive industry that has an “everyone should win the prize mentality,” which doesn’t make much sense. The prize should be presented to the winners of a competition in recognition of outstanding achievement. We found this interview with Tom Coughlin, the coach of New York Giants, and his feelings on motivation to be very interesting. His view is fairly simple. People earn the right to win, just as employees in any recognition or incentive program have the opportunity to earn the right to win. The have to work for it.
Essentially Mr. Coughlin explains that motivation is a process that involves learning. Most people inherently want to be the best they can be. They want good managers who are interested in their performance and success, they want to be coached. Most employees have pride in what they do. To use that pride in the success of your organization, help your employees set realistic goals for achievement, and then show them how to attack those goals.
You can’t go anywhere in the Human Resources world without running into the discussion of employee engagement. It’s the piece of their world that drives performance in the company. But you can’t just expect engagement to exist without setting up the process to help the employees along the way.
When you do, the awards they receive will be received with the pride knowing that they Earned the Right to Win.
The cynics of the award industry come and go. Alfie Kohn and Dan Pink wrote two of the bestselling books in the incentive industry, both anti incentives. They created a contingent of believers and supporters who like an ideologues in any field have a difficulty in ever seeing the other side of the subjects. Consider for a moment what Mr. Kohn claimed in his 1993 book…
“The bottom line is that any approach that offers a reward for better performance is destined to be ineffective.” And “the more closely we tie compensation (or other rewards) to performance, the more damage we do.”
But let the academicians argue over science and other aspects of the award industry. There are plenty of them who have positions opposite of our two famous authors mentioned above and have actually been a lot more scientific about it.
A highly respected one is Gerry Ledford ,PhD a Senior Research Scientist at the Center for Effective Organizations, Marshall School of Business, University of Southern California. He received a Ph. D and M.A. in Psychology from the University of Michigan and has authored over 100 articles and ten books and he frequently speaks at professional events. Just as a comparison, Mr. Kohn was a high school teacher, and Mr. Pink was a political speechwriter turned author.
As discussed in this article from The Compensation Café, scientific research on awards is quite different than what Pink and Kohn suggest. Some highlights from this article include:
- Monetary incentives generally do lead to increased performance.
- Extrinsic awards actually can increase intrinsic motivation
- Rewards have no negative effect on intrinsic motivation
So the next time a naysayer expounds on why award programs don’t work, hand them this post and tell them if they do want information on the other side of the issue to review the posts referenced here. The incentive and awards industry is alive, still thriving and still producing results for thousands of companies. Why? Well in a word because these programs produce results. If they didn’t we wouldn’t have them. It’s just that simple.
Research by Bersin & Associates shows the impact of employee recognition on the bottom line. As we’ve seen with other research on the subject, successful companies use recognition to motivate the performance of their associates and drive strong business performance and accountability.
In the yearlong study Bersin showed that employee recognition can produce some surprising results. After defining and measuring what a “high recognition company” was, they concluded that those companies dramatically outperform like organizations by 12 times in a wide range of business outcomes. In addition those companies had 30% lower voluntary employee turnover which equates to millions of dollars in savings for those corporations.
These “high recognition companies” structure recognition systems that allow peers to “thank and provide feedback to peers,” not just use managers to do it. By giving employees open access to the program everyone can see who is being recognized and for what. They can create an entire organization of previously unsung heroes to get the credit they deserve. As this form of recognition creates positive reactions from both the giver and receiver, it makes everyone happier and more productive.
Simply saying ‘Thank You’ is a management tool that has been around for years, allowing the front line employees to do it by themselves is a relatively new phenomenon in business, but one that has proven its worth. Take a look at what a very successful CEO, Robert Eckert, retired CEO and Chairman of Mattel had to say about ‘Thank You’ and how it affected his career.
Recognition works; it will drive bottom line results and achieve a wide range of business objectives. If you haven’t made peer to peer “thank yous” as a part of your overall effort, you’re probably missing some big opportunities.
By the way, in the spirit of shameless advertising, the Award of Choice makes a perfect award for peer to peer programs….they are easy to administer, cost effective and exactly what your employees want.
According to First Data research, store specific gift cards are more popular than credit card-branded gift cards for incentive programs.
The “Prepaid Business Incentive Report” showed that over 37% all incentive budgets are used for some type of gift card, a large percent considering the numbers of incentive categories there are. It also mentioned many other types of incentives such as service award merchandise and travel only made up budget shares in the single digits.
This is truly surprising growth; less than twenty-five years ago gift cards didn’t even make up 1% of incentive budgets. Traditional merchandise incentive suppliers have painstakingly attempted to quash this growth of gift cards with all manners of negative selling but to no avail. For every 100 sales reps calling on American corporations trying to sell them incentives, there is only about one selling gift card systems.
The respondents of the survey were companies employing over 100 individuals and represented industries as disparate as manufacturing, government, retail and communications. Of the 37% of budgets using cards, 20% were single merchant cards and 14% were network branded open loop cards such as Visa and American Express, and 3% was paper gift certificates. The balance of the budgets was made up of 6% in merchandise, 4% to points based programs, 3% to travel, and 14% to plaques, pins and logoed apparel. Cash and cash like awards made up the rest with approx. 36%. At one time cash was in excess of 60% of all incentive budgets, maybe more.
The reason companies prefer closed loop merchant gift cards vs. bank credit cards was attributed to a variety of factors. These include employee preference (38%) followed by physical proximity and past ordering history. When purchasing large quantities of certain merchant gift cards, the company can receive a volume discount, but it is administratively and financially difficult to source several cards like this. In addition they lose the advantage of having a gift card system that offers hundreds of different cards giving the employees a great choice. One disadvantage of using open ended bank type gift cards is the fee. As most gift card denominations used in these types of incentive programs are $25 and some $50, these fees can represent as much as 15-20 additional cost over the face amount of the card.
The most common reason for using gift cards as employee awards were employee recognition (which includes safety awards) at 48%; service anniversary awards at 36%; year-end holidays 32% and employee health and wellness goals at 12%.