The Value of Points in Your Employee Recognition Award Program

 

The machinations of how the incentive industry has been hiding the price of awards in points-based systems have been around since the award stamp days (Blue Chip, S&H, Gold Bond etc.) where the redemption value of a book full of stamps depended on the grouping of merchandise items that could be redeemed.  With the inclusion of branded gift cards as part of the award mix over 20 years ago, they became the basis used to determine value of points in any type of points-based incentive or employee recognition system. 

The incentive/award industry fought the inclusion of gift cards with a variety of false information for years just to hide the value of merchandise awards that had become ridiculously higher than retail. By adjusting the number of points needed to redeem for an item of merchandise as well as the cost of the point the incentive supplier charged the client, you could easily hide the “price” of the award from the participant.  In past years it was not uncommon for incentive companies to change the cost of these points simply to camouflage the value.  We’ve seen them range from 1 cent to ½ cent to 1/32 cent to a dollar and every number in between.  Then all the incentive company had to do was provide “excellent service” to deliver these awards and everyone was seemingly happy.  

When gift cards arrived on the scene it was transparent what a $50 gift card should be worth in points.  By simply dividing the value of the card by the number of points needed to redeem for it, the cost or value of the point was apparent.   If you had merchandise included as an offering in a program the same calculation holds true.  It was then that folks started to see that the TV that looked so good in the incentive catalog had a point cost of twice or more what you could purchase the same TV at retail.

 It is no wonder that the growth of gift cards in the incentive industry has been exponential since their inception.  Today they represent by some research to be over 90% of all incentive expenditures.  And, when gift cards are available as an option along with merchandise in an incentive or loyalty program, the redemption of the points for gift cards vs the merchandise can easily exceed 95%.  If you don’t have gift cards in your recognition program and want to include them, expect a great deal of push back from your current supplier…. If included these suppliers will lose substantial profit.  

But isn’t the entire idea of recognizing an employee with an award to give them what they want with pricing that shows true value?  

 

 

Thank Them – Praise Them – Recognize Them

 

Remember those hopefully long forgotten days when we had bosses who thought that your pay check was “all the thanks you need?”  We’d like to think that they are long gone but unfortunately, we often hear that attitude is still very much present in today’s managers. 

We are in the “Thanks” business, it’s what we do, and we believe it because we know it works.  Unfortunately, there always seem to be a manager who defends the philosophy of not thanking employees and recognizing them for their performance on an often basis.  As social beings most of us intuitively know that thanks, praise and recognition is good for us.  We can’t recall a time when an employee every told us that they hated it when someone thanked or praised them for their effort.  They may have been embarrassed about how it was done, but that’s a different issue.  The American Psychological Association in a paper in the Journal of Personality and Social Psychology showed simply that a little gratitude does go a long way and motivates increased pro-social behavior. 

In our opinion not fostering a culture of thanks is unproductive, lacks judgment and we think it’s unwise.  It’s surely at least counterproductive for everyone involved.  Paychecks are great; it’s why they come to work, but it’s only half the contract.  It’s just paying what you owe, it’s not showing appreciation. 

Opposing managers often use these reasons why they withhold thanks:

• No one thanks me
• Thank people and they’ll only expect more
• If you thank one you have to thank them all
• I thanked an employee one time and he said ‘put it in my paycheck, who needs that kind of guff'
• Thank people and they’ll get false confidence
• I can’t thank people who need to improve

To these managerial types we say get over it.  It isn’t about you.  If your people expect more appreciation give it to them, they will deliver more to others and your workplace will warm up.  You don’t have to thank them all, but once you start you will naturally just thank more and more and it will become a habit.  And forget about the snarky ones, those are often malcontents who are looking around the corner at the next job move.

By simply choosing your words carefully it doesn’t mean you have to rise to the level of praising them, and then formally recognizing them.  But it is does start that cycle, that will result in a more engaged and productive workforce.

Thanks for taking the time to read this post.

Individual or Team-Base Incentives? When to Use One, the Other or Both.

 

Twenty-five years ago, less than 20% of firms reported their workforce was engaged in one team or more at any given time.  Studies today show that teamwork and collaboration consume about 80% of the typical knowledge worker’s day. 

While most employees agree that team-based work is essential, only one-quarter prefer to work in teams versus alone.  Before the pandemic, 68% say the teams they work on were dysfunctional.   As business becomes increasingly global and cross-functional, silos are breaking down, connectivity is increasing, and teamwork is seen as a key to organizational success. 

When planning reward initiatives, designs to optimize team incentives is not immediately obvious or intuitive. The type of work that teams perform ranges widely and can change over time. For incentives to do good rather than harm, they should encourage the types of actions and behaviors appropriate to the work of the team in question – the right incentives at the right time. 

Things to consider when planning your team incentives might include:

 Whether the work of the team is highly-interdependent (tight team) versus loosely dependent (loose team).

 Organizations emphasize individual achievement when it comes to compensation, promotion, rewards and recognition because they’re comparatively easier to measure and administer.  Yet individual rewards might contribute very little to team dynamics and performance, or even detract from them.

 For a variety of reasons, team-based incentives and rewards may prove more difficult to administer (particularly in larger teams) because individuals come to their teams with different goals and contribute varying levels of effort and/or value.  Team rewards may even introduce issues where individuals let their teammates do most of the work while sharing equally in the reward. Adversely, individuals may have to give up personal recognition for the benefit of team performance.

There is a growing body of research that offers compelling evidence that where small teams engage in highly-interdependent work, team-based rewards drive better performance and outcomes than individual rewards.  This is possibly driven by intergroup competition.

 In small, highly-interdependent teams, hybrid rewards – which recognize team achievements and the behaviors and productivity of individual team members – can drive the best results of all. 

 As small teams become more interdependent, better communications and greater cohesion will result in better performance.

 When a team does not perform highly-interdependent work, greater communications and cohesion might actually harm performance; largely because it is time-consuming and unnecessary. Here, individual incentives are likely more effective.

 So do the research. Determine if you have tight teams (highly interdependent like a volleyball team or restaurant crew) or a loose team; whether you have small teams (10 or less) or large teams (more than 10 members.)

Small and tight teams are more effective at driving performance than large and loose teams.  For large and loose teams consider using Hybrid awards that reward the teams’ accomplishments as a whole and rewards the behavior and performance of the individuals as well.

  

What are the Most Important Drivers of Employee Performance?

 

10-24-21 What are the Most Important Drivers of Employee Performance?

 Recent research by the Cicero Group, a premier management consulting firm focused on implementing data-driven strategies for a broad mix of organizations across the globe, indicates that employee recognition is a driver of employee performance.

 We have seen similar research on the same subject for years, and frankly while the %’s of what the top drivers are always a little different…, the categories are much the same. 

Employee recognition is virtually always in the top third of drivers.  Why?  Because it works.  All companies seem to understand this, but their approach to how to implement these efforts differ widely from place to place.  

The Cicero research demonstrated that  one of the most effective ways to increase engagement is simply to recognize employees for their performance, in both formal and informal ways.

How to Design Effective Employee Recognition Programs

 

An employee recognition program can improve employee well-being, satisfaction, employee retention, and health. The impact of recognition can loom large over a company. 

According to 83% of HR leaders, employee recognition programs benefit organizational values, and 85% say they positively affect organizational culture. 

The challenge for companies is how to design an effective recognition program.  We deal with companies every day that tell us they are looking for ways to improve their current programs.  Many are stuck in an age-old “years of service” program that does little if anything to motivate change in the complex business climate of today. 

 When you are considering revamping your recognition program here are 5 keys to making it meaningful:

1.    Be relevant. Tie the award to specific achievement of certain objectives, either by                         individual or team.

2.     Timing is everything.  Recognition that arrives months later isn’t nearly as meaningful as recognition that is received immediately. Put systems in place to recognize employees and take advantage of the opportunity when it is presented.

3.     Recognition comes in many forms. As far as giving and receiving appreciation goes, everyone has a preference or style.  Many feel that it is best to ask the employees what they want, but a word of caution.  In over 90% of the time, the answer to this question will invariably be cash.  That may be what they say they want, but it’s not necessarily what will motivate them to incremental performance. 

4.     You don’t need to break the budget bank.  Thanking your employees for their daily efforts can motivate them just as much (and sometimes even more) as recognizing achievements.  The appreciation should also come from both managers and peers; some employees find recognition from peers to be even more motivating.

5.     Bringing it all together.  Employees appreciate the recognition that lets them know how their efforts contribute to the success of the company and their team is valued.  Employees gain a sense of security in their value to the company, motivating them to continue their great work. 

If employee recognition is important to your organization, you need to spend some time designing one that will produce results.  Unfortunately, most companies don’t take advantage of the professionals in the award industry who are available usually without charge (if you are buying their awards) to assist you in this regard. 

In difficult labor markets, hiring and retaining good employees is a constant issue.  You spend a tremendous amount of revenue on this, doesn’t it just make sense to spend a small fraction of that money on a recognition program that you measure to produce results?  With a well designed employee recognition program you can turn regular hires into game changers.

The Positive Effects of Properly Designed Employee Recognition Programs

 

Employee recognition awards have become a $46 Billion market.  In the last decade or so, employee research abounds that shows that employee recognition increases productivity, reinforces quality performance, promotes morale and builds positive relationships.  

A recent survey of employees conducted by “A Great Place to Work” found that teams scoring in the top 20% of engagement experience 59% fewer turnovers. 

However according to Gallup’s employee engagement statistics 53% of workers in the US are not engaged and up to 65% of employees haven’t received any form of recognition for good work in the last year.  It simply follows that when people aren’t appreciated for their hard work, they aren’t as inclined to continue to produce. 

Following are some thought-provoking statistics about employee recognition programs:

•  87% of company recognition programs emphasize tenure…

 While memorable recognition milestones such as 5-year, 10-year and 20-year work anniversaries are important, it is far more important to plan recognition efforts for your employees based on their results and behaviors

• Over 91% of HR professionals believe that recognition and rewards make employees more likely to stay.
•  An employee who has been recognized is 63% more likely to stay at his or her current job within the next three to six months

 Plan Your Recognition Efforts Around:

• Recognizing an employee going above and beyond to help a customer
• Providing avenues for peer recognition allowing your employees to acknowledge the efforts of their support teams
• Attract new employees
• Raise average ticket price
• Achieving short term operational goals
• Encourage developing of revenue generating or cost reduction ideas and ways to achieve them
• Drive operational excellence
• Measure training effectiveness
• Reduce order error

More Stats From Recent Surveys

•  A lack of recognition and engagement was contributing to 44% of employees changing jobs 
• Business productivity increases by 31% when employees are happy
• Recognition improves employee engagement productivity and performance by 14
• 92% of workers are more likely to repeat a specific action after receiving recognition for it.
• More than 40% of employed Americans feel that if they were recognized more often, they would put more energy into their work
• Employees mentioned that interesting work (74%) and recognition and rewards (69%) as the top factors that keep them at their current employers
• There are many ways in which you can recognize employees besides just money...in fact, 65% of employees prefer non-cash incentives.

For many years the incentive industry had a very difficult time measuring the effectiveness of employee recognition programs.  With the preponderance of employee research that give us stats as shown above, the benefits of a valued workforce are many and varied.  For one thing, appreciated employees report increased job satisfaction. That satisfaction is itself tied to increased loyalty and lower turnover — and that, of course, leads to higher overall productivity.

 

Is Giving a Gift Card Just Being Lazy?

 

A very interesting result comes from research conducted by the Journal of Experimental Social Psychology on the relationship between gift pricing and appreciate.  When researchers asked people to recall a gift they gave and then to rate how much they thought recipients liked it, higher prices went with higher ratings. But when people made the same ratings for a gift they had received, price was completely unrelated to enjoyment. 

It seems that function counts. Gifts that are actually usable are far more appreciated than those that aren’t.   Gift givers tend to focus on how pleasurable it would be to use the gift but overlook how easily or often the gift will be used.  Givers might favor the beautiful and dramatic because they think about gifts in the abstract.  Recipients, in contrast, imagine themselves using it, and so focus more on utility. 

Delayed gratification is also okay. Recipients don’t mind waiting, especially for a gift that would be more satisfying in the long term. 

 Don’t be afraid to give people what they ask for. Gift givers think that unexpectedness adds value because it shows thoughtfulness; however, recipients actually think it’s more thoughtful to give a gift that they requested. They see it as showing that the giver attended to and honored their wishes.

 Give experiences, not things. Because people are willing to wait, givers should consider research over the last decade showing that experiences lead to more long-lasting satisfaction than new possessions. A family vacation is a better bet than that diamond necklace. But givers are leery of experiences because they worry it’s more likely they’ll pick something the recipient doesn’t want. The answer is simple, give them a choice. 

When giving gifts it’s always best to set aside your own desires and try your best to anticipate what the recipient wants. Using a vast choice of gift cards is an easy way to avoid all of the above.  They truly give the recipient what they want when they want it.

 

Money Doesn’t Always Change Everything

 

According to the September 2021 issue of Sales and Marketing Management, using money as an incentive award doesn’t always change everything.  In fact, it may not change much of anything accept spending more and not achieving your goals.

For as long as we have been in the employee awards industry there has always been a blurred line between using cash and non-cash to improve performance.  To be overly simplistic, the easiest way to consider the two methods is in relation to what you are trying to accomplish.  Cash is part of the contract you use to hire and retain your employees.  It brings them to work, but it doesn’t necessarily motivate them to perform at the high level you want them to.  Non cash is more often than not used for achieving specific objectives with clear start and stop timing and sound measurement and feedback of that objective.  One of the biggest reasons that cash is also used in these kinds of programs is for ease of administration…all you have to do is just add some money to the paycheck.  Right?

Recently we had a potential client that had been using non-cash awards to reward employees but moved that budget to cash after a survey of employees found cash is what they wanted.  Frankly if you ask any employee group what they want for a reward they will universally say cash.  Unfortunately, when companies make that change, they rarely do any kind of measurement at the end of the reward program period to see if the change had any meaningful effect on the outcomes.  Worse, the extra cash in the paychecks will get lost in income and provide little if any motivational or lasting trophy value.  Over time it will just be considered as expected compensation and be very difficult stop.   You will assuredly end up spending more money on awards using cash than using non-cash.  In addition, the White Conference on Productivity showed conclusively that it took $3 in cash to produce the same results as $1 in non-cash.  Many clients tell us they wish they had never gone to cash rewards in the first place. 

Why consider using non-cash rewards as the best recognition for stellar work:

      ·       These rewards have emotional value that make them far more effective in driving                    employee loyalty

·       The perceived value of non-cash rewards tends to be significantly higher than the actual cost.

·       They make it easier for workers to celebrate each other’s success and talk about how they were rewarded.

·       Millennials and GenXers particularly appreciate non-cash rewards, especially for unique experiences.

 Your employees work hard.  Show your appreciation for their contributions and inspire them to reach goals with rewards they want.  Don’t just put another $50 in their paycheck.  It will get lost in the shuffle and you may lose the meaningful connection between the reward the performance. 

 

What Makes Work Meaningful — Or Meaningless?

Meaningful work is something we all want. The psychiatrist Viktor Frankl famously described how the innate human quest for meaning is so strong that, even in the direst circumstances, people seek out their purpose in life.

 A recent study by MIT Sloan Management Review showed:

 Meaningfulness was more important to employees than any other aspect of work, including pay and rewards, opportunities for promotion, or working conditions. Meaningful work can be highly motivational, leading to improved performance, commitment, and satisfaction.

 Researchers anticipated that the data would show that the meaningfulness experienced by employees in relation to their work was clearly associated with actions taken by managers. Instead, the research showed that quality of leadership received virtually no mention when people described meaningful moments at work, but poor management was the top destroyer of meaningfulness.

 The research aimed to uncover how and why people find their work meaningful. The study showed that meaningfulness was often associated with a sense of pride and achievement at a job well done, whether they were professionals or manual workers.

 “Those who could see that they had fulfilled their potential, or who found their work creative, absorbing, and interesting, tended to perceive their work as more meaningful than others. Accordingly, receiving praise, recognition, or acknowledgment from others mattered a great deal.”

The Five Qualities of Meaningful Work

The study also revealed five unexpected features of meaningful work; in these features might explain the fragile and intangible nature of meaningfulness.

 1. Self-Transcendent

 Individuals tended to experience their work as meaningful when it mattered to others more than just to themselves. Their work was meaningful when it showed the impact and relevance of their work on the individuals, the group or the community. 

 2. Poignant

 The experience of meaningful work can be poignant rather than purely euphoric. The experience of coping with challenging conditions led to a sense of meaningfulness far greater than they would have experienced dealing with straightforward, everyday situations.

 3. Episodic

A sense of meaningfulness arose in an episodic rather than a sustained way. It seemed that no one could find their work consistently meaningful, but rather that an awareness that work was meaningful arose at peak times that were generative of strong experiences.

 4. Reflective

 Meaningfulness was rarely experienced in the moment, but rather in retrospect and on reflection when people were able to see their completed work and make connections between their achievements and a wider sense of life meaning.

 5. Personal

 Other feelings about work, such as engagement or satisfaction, tend to be just that: feelings about work. Work that is meaningful, on the other hand, is often understood by people not just in the context of their work but also in the wider context of their personal life experiences. 

How Does Your Incentive or Loyalty Program Measure Up?

 

Executives want to know what they can expect in return for investing in an incentive, B2B, channel or loyalty reward program. That is a fair question, and one that the incentive industry have had trouble answering succinctly. We can pull from dozens of published case studies and examples, but these are best-case scenarios and not necessarily helpful in setting a minimum expectation — we need a baseline.

The following results come from research conducted and published in the Sept 2021 edition of Sales & Marketing magazine showed some things that could be foundational for program baselines.  Respondents for this survey included program owners and managers from sponsoring brands, as well as design strategists and program directors from companies that provide incentive solutions.

Q: What Kind of Results Can you Expect from Your Incentive Program?

• ·          9 out of 10 Programs Achieve 5-10% Year over Year program lift

o   2/3 of well-designed programs achieve greater than 10% incremental lift

• ·       82% of programs increased retention by 5-10%

o   Half of the expert respondents cited greater than 10%

• ·       90% of the programs achieved ROI’s 2:1 to 4:1

o   One in three of well-designed exceeded a 4:  ROI

With these findings, what is the reason that so many companies implement their own non-cash incentive programs without the assistance of industry design strategists and specialists?  In our opinion the reason is the vast majority of incentive reward companies are devoid of great strategists.  It simply costs too much money to keep them when they have such a difficult time being competitive.  Today you are more likely to have a seasoned veteran of industry calling on you charged with selling you just the “prizes”, which is where most of the budget is.   

Research: Gift Cards Better Than Cash for Employee Wellness

 

When it comes to promoting healthy behaviors in workers, managers should keep their cash and reach for gift cards. That was the finding by a team of researchers at Brigham Young University, who found that gift cards were far more likely to motivate participants in a workplace wellness program to successfully complete their challenges. 

Published online at Management Accounting Research, the study was conducted by BYU researchers Bill Heninger, Steve Smith and David Wood. It tracked an institution that rewarded workers who completed a six-week wellness challenge, giving participants a choice between a cash bonus on their paycheck, a gift card or a material reward of the same value. Approximately 60 percent of participants selected cash, 30 percent chose gift cards and 10 percent selected the tangible reward.

While cash was the most popular choice, the most effective choice turned out to be gift cards. According to the findings, those who selected gift cards were approximately 25 percent more likely to complete the challenge than the participants selecting other rewards, taking into account all other factors.

"You would presume that when people pick the reward type that is the most appealing to them, it would have the most motivational power," Smith said in a statement. "But that wasn't the case. Employees choosing to be rewarded with gift cards actually reaped the greatest health benefits.

The findings add more evidence to the assertions long held by leaders of the incentive industry that gift cards are a more effective incentive than cash. The authors suggest that the gift cards might have proved more effective because they strike a balance between flexible and specific when it comes to entertainment or fun. 

"People keep mental accounts," Wood explained. "If you work and make $10, that's your work money. If you find 10 bucks on the ground, then that's free money. You might go out to lunch with the free money, when you normally wouldn't with your work money."

Gift Card Rewards Even More Popular in a Touchless World

 

Gift card use in corporate America is having a moment. Actually, as the return to offices has been pushed back by most companies due to another spike in COVID cases, the gift cards moment will likely be extended indefinitely.  

The pandemic has generated a steady stream of stories about managing remote teams, and gift cards are invariably mentioned in most. Gift cards were a common component of employee recognition programs prior to the pandemic, but the forced cancelation of incentive travel programs and gift cards’ ease of use in a world that is not working together has produced a significant increase in their use.

 The Incentive Research Foundation (IRF) reported late last year that since the business world went remote in March 2020, there has been a 26% increase in the use of gift cards in workplace incentive programs. Corporate use of gift cards in the past year range from helping workers equip their home offices, to buying team members lunches for Zoom meetings, stocking up for Zoom happy hours, or providing impromptu spot rewards by managers or in peer-to-peer recognition programs. 

The ability to digitize gift card delivery has existed for some time, but more companies relied on these capabilities during the past year and a half for obvious reasons. The IRF reports that many lessons were learned about the power of virtual engagement:

 “Digital options enable immediate, coordinated, trackable delivery of rewards regardless of geographic location, and groups of employees can receive their reward at the same time such as during a virtual meeting. Digital delivery can also increase control, enhance reporting and reduce overall administration time for program owners.”

Recognizing achievements instantly — or as immediately as possible — is more important in the remote work world. Motivation experts also remind managers that recognizing top performers in front of peers has always been critical. That may have to be done during a virtual meeting these days, but it should be done. If you sponsor a peer-to-peer recognition program, make it easy to use and promote it frequently. Companies risk underutilization of a program if it’s not meaningful and easy to use.

Are You Actually Willing to Empower Your Employees?

 

Everyone seems to agree and supports the idea of empowering your employees.  Leaders want to empower their people. But while empowering sounds good and beneficial, not many leaders are actually empowering their people. 

Much of the frustration that people have today with business is that no one seems to be empowered to get anything done.  Why?  Simply because the reality is that giving up control is insanely difficult. In the business world, empowerment can mean giving up control of tasks, embracing an employees’ suggestions, or even using ideas that come from outside your current company.  We are all guilty of not wanting to give up power. 

In a study conducted by Leadership IQ entitled “The State of Leadership Development” some interesting findings were as follows:

• Only 29% of employees say their leader is always open to using ideas/practices from outside the company to improve performance.
• Only 16% say their leader always removes the roadblocks to their success.
• Only 20% say their leader always takes an active role in helping employees to grow and develop their full potential.
• Only 29% say their leader’s vision for the future always seems to be aligned with the organization's.
• Only 27% say their leader always encourages and recognizes suggestions for improvement.
• Only 26% say their leader always responds constructively when employees share their work problems.
• Only 20% say their leader always shares the challenges we're facing.

 If you truly want to empower your employees, consider the following three statements:

When employees give me alternatives, I avoid telling them which one I want. Instead, I ask for their suggestions. 

I’m open to using ideas/practices from outside the company to improve our team’s performance.

I encourage and recognize my employees’ suggestions for improvement.

If you are brutally honest with yourself while considering these statements you’ll discover where you are on empowerment or if you struggle to empower. 

 

Corporate Gifts Remain Popular Rewards

 

For the balance of 2021 and probably into 2022 as well, Incentive Magazine’s Gift Survey reveals that reward planners will continue to offer merchandise in lieu of group travel to motivate performance. According to the Incentive Research Foundation, the use of gifts as a motivational reward skyrocketed by 68 percent in 2020, and that trend is expected to continue. 

There is a lingering uncertainty about the pandemic's effect on travel and some incentive travel programs are still being booked, but many companies have preferred to use gifts instead.

 What are the most common problems when using merchandise gifts?

• merchandise was not always available when needed according to more than 75 percent of respondents 
• more than half of those polled cited frustrating reward delivery delays to recipients.

 These problems can be expected to continue, as manufacturing delays remain a global issue.

 Which gifts are most commonly given?

• 61% of respondents favored using apparel, the vast majority of which was shirts with company identified logos.  Past surveys have indicated that while employees enjoy logoed apparel items, many would prefer a choice of awards
• 59% utilize gift cards or gift card systems that allow the winner to order any of the most popular gift cards in the country, and thus use them to get what they really want, not what someone thinks they want.
• 51% use electronics and food-and-beverage items were used by 44 %.
• Luggage and leather items, sporting goods, outdoor equipment and watches were among other prizes preferred by more than 20 percent of respondents.

 How are rewards being used?

• More than two-thirds of incentive professionals use rewards to recognize employees.
• 55% give awards to thank employees for their performance
• 50% use rewards to thank loyal customers
• 50% use them to build morale and increase job satisfaction
• 43% use them as award to motivate increased sales.

 It is always difficult to pick just the right award, and some would suggest that it can’t be done.  There are too many variables and too much diversity of recipients to get it right.  Many planners voiced frustration about the dearth of new gift ideas.  When you offer a gift each year, it's hard to come up with something new!

 One planner summed up why gifts make great rewards. "Choosing the right gift leaves long-lasting positive impressions and memories — and it generates great PR buzz long after it's given!"

While that is as true as true can be, no one can really tell you how to choose that right gift that leaves all those long-lasting memories.  There is a lot of justification to have a system where the recipients can choose for themselves.

Don’t Lose Your Best People

 

According to research conducted by Ipsos Research at the end of 2020, about 1 in 4 U.S. employees planned to leave their employer as the COVID-19 pandemic subsides. 

 

According to Engagement and Retention report, presented by the Achievers Workshop Institute in early 2021, 52% of employees surveyed plan to seek new employment in 2021. 

 

Employees are most likely to leave a current job for one with better compensation and benefits or better work/life balance.  The majority of employees cited burnout as the main reason. 

 

Can you sustain your business if you lose 25% to 50% of your employees?  It is inevitable that you will see a lot of employee movement.  The type of employees you lose will differ by industry, but no one can afford to lose their best people.

 

There are some steps you can take now to mitigate the loss and retain many of your important people.  Here are a couple: 

 

First and foremost, identify all of the top performers that you don’t want to lose and ask your managers to have quality communication meetings with them at least twice a month.  Get as good a sense of their job satisfaction as you can.

 

Then, listen to the employee challenges and look for solutions.  Catch unsatisfied performers before they start looking for and applying for jobs.  Once they start doing that your chance of keeping them are much lower. 

 

If you take just these two steps you will be well on your way to retaining your top employees, and those retention efforts will help in keeping employees in general. 

 

Top Seven Reasons Employees Consider Leaving their Jobs

 

According to the “Employee and Retention Report” provided by the Achievers Workshop Institute in Feb. 2021, following are the top reasons that employees consider leaving their jobs:

• 36% - Better compensation and corporate benefits
• 25% - Better work life balance
• 16% - Lack of recognition for their work
• 8% - To find a better Corporate Culture
• 5% - Current company values don’t align with theirs
• 5% - Lack of strong relationship with peers
• 5% - Don’t know.

Companies will always be looking at compensation and corporate benefits to develop budgets designed to attract top talent and maintain your industry position.  But except for this #1 reason above, the rest of reasons are subjective.  And these make up almost two-thirds of the reasons employees consider leaving.  These will require an in-depth evaluation of where your company stands in comparison.

When you do, be as transparent and honest in your appraisal as you can.  After all, your best employees could be at risk.  Ask yourself some very elementary and candid questions about this 64%.  And remember, that because you are in upper management, make sure you put yourself in your employee shoes.  Example: thinking you have a state-of-the-art recognition system, doesn’t mean much to an employee who doesn’t feel recognized.

Manager Training is a Key Step in the Retaining Your Best Employees

 

Research on employee satisfaction from just a few years ago showed that:

 “Half of employees who don't feel valued by their employer intend to look for a new job in the next year. Among those who feel valued, just 1 in 5 (21%) will send their resumes elsewhere.”

With labor market in complete flux as it is today, that % may double or even triple.  While you are doing everything to find and hire new workers, you also need to do what’s necessary to retain your current ones.

Lots of studies show that employee recognition is one of the factors that will keep your employees from job hunting.  The first factor of course is pay and benefits, but when you reached the plateau on those and there’s not much more give in those budgets, you need to look at other ways to get things done.  Monetary compensation is not the only reason employees stay with a company.

Behavioral psychologists know that you appeal to a workers' sense of value when you reinforce their performance with positive consequences.  Employees that feel valued at work, tend to stay at work with that company. If it’s that easy, why do we constantly work with clients who are having problems with their current recognition efforts?  Could it be a simple matter of management training? 

According to David Ballard, PsyD, an assistant director of organizational excellence at the APA:

"Most managers and supervisors are never really trained to give effective recognition, and don't track the effectiveness of programs that they have in place.”  Managers need to be trained "in the basics of recognition and reward theory to make sure that recognition is closely tied to the behavior that they're trying to recognize and encourage."

No single reward strategy will appeal to all your employees.  Everyone has a unique way that they like to be recognized.  And the front line manager is the best suited to bring that recognition to the employee, to know what they want.  Once they know what their employee’s value, if they make it a priority to implement a reward system that addresses that value, you will get more of that type of performance. 

And, while you’re at it, you may want to institute a recognition system to reward those managers who are going the great job of recognizing and retaining their people. 

When to Use Cash or Non-Cash as Employee Awards

The argument of whether to use cash or non-cash as awards to motivate or recognize employee performance is as old as the award industry.  There have been many corporate managers who think that cash is the only way to reward behavior, and in fact as money is the contract that we have to get people to come to work, these same managers often think that we shouldn’t have to pay them anything additional to perform their jobs.  Frankly, in many respects this is a valid opinion…. the old “a day’s work for a day’s pay” attitude. 

Based on decades of experience in analyzing recognition awards programs, we have firsthand knowledge that the salary you pay employees is considered by most as merely the contract that you make with them to get them to work.  It has relatively little to do with how well they perform their responsibilities when they get there.

 Many people in the incentive industry will say that cash as an award doesn’t motivate as well as non-cash.  Frankly to say that cash doesn’t motivate is disingenuous. It is innately tied to our perceptions of cash as a universal motivator in this country.   It is easy to use, easy to distribute, and fulfills many of the needs that people have.  In difficult economic times it can certainly be very motivating.  

However, there are two sides to using cash as a motivator, and to understand when to use cash and when to use alternative awards requires an understanding of both sides.  

Over the years we have spent a great deal of time researching cash and non cash as an employee award and have come up with at least eight reasons why non cash may be a better choice when attempting to motivate and award employees.  Pease see the attached white paper for a more detailed explanation of the reasons.