2020 Employee Gift Card Research

Gift cards remain the most popular employee award to use in incentive and recognition programs.  Not only are they most sought by the employees themselves, over 75% of industry professional rated them as effective or extremely effective awards. 

Following are other interesting points from the 2020 research recently completed by Incentive Magazine:

• 55% of the companies surveyed use the physical cards, while 39% used both physical and electronic.
• Gift cards are most often used by companies for sales incentives (55%) followed by business gift (49%) service awards (46%) and employee recognition and engagement (45%)
• About 2/3 of the companies purchase their gift cards directly from the retail brand, while 1/3 from incentive suppliers or gift card resellers

Company Budgets

Ave Spend Per Participant	% Spent
Less than $25	10%
$25 to $49	20%
$50 to $99	18%
$100 to $149	16%
$150 to $199	5%
$200 to $499	15%
$500 to $999	8%
More than $1000	8%

Compared to Cash Awards	%
Equally as Effective	39%
Less Effective	9%
More Effective	29%
Do Not Use Cash	20%
Not Sure	3%

Compared to Gifts	%
More Effective	59%
Equally Effective	28%
No Not Use Gifts	5%
Less Effective	5%
Not Sure	3%

While many companies still purchase individual brands directly from the retailers, studies have shown that when your employees are given the option, most would rather choose which gift cards they want.

Incentive Research Federation Study on Incentives in the Tech Industry

A recent study conducted by the Incentive Research Foundation found that the top performing technology firms are twice as likely to use employee reward and recognition programs as a competitive advantage over competition.  Top performing firms were classified as those that demonstrated more than a 5 percent increase in revenue or stock price in 2018. Of the 118 technology companies reviewed, only 49 organizations made the cut. 

Other findings of how these companies use reward and recognition compared to average performers include: 

·       22 percent are more likely to structure their programs with the goal of reaching each participant versus only recognizing the top performing participants.

·       25 percent are more likely to look to outside partners for expertise on the best ways to recognize and incentivize their program participants.

·       They spend an average of $6,833 per person for their sales incentive trips, while average firms shell out an average of $6,000 per participant.

·       21 percent are more likely than those at average performing firms to use financial metrics as program qualifiers.

·       They spend about 6.7 percent of participant income in annual spend for rewards and recognition.

·       They award a value of $4,292 on average to their top performers and $2,685 to their average performers in award points, merchandise and gift cards.

·       20 percent are more likely to offer a top performer sales award, with 23 percent of them having that award include a group trip.

·       13 percent award a variable versus fixed number of winners.

·       14 percent have their awardees earn automatically on predefined goals versus committee selection intervention.

·       9 percent are more likely to include achieving 100 percent of the predefined goal to qualify for a trip versus requiring their sales people to exceed their goal. 

·       19 percent are more likely to provide simple rules for their program. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

How Much to Budget for successful Employee Recognition?

We certainly don’t mean to be flippant, but the only plausible answer to this question is “Whatever it takes”! What we are certain about is that the vast majority of employee recognition programs are underfunded. Then again we sell these for a living so that’s what we should say….right?  Not really.  These are programs are underfunded because the vast majority of recognition programs are not measured with regard to any meaningful objective result that finance folks can touch and feel. 

There is a good deal of research showing that the companies with highest the employee engagement have the best bottom line results and that employee recognition is essential to improving employee engagement. While the studies are sound, in our experience, the C-suite hasn’t really bought into them.  It would be hard to find an executive who says he/she doesn’t agree with recognizing employees. But when asked how much to spend, there draw a blank. 

Recognition budgets are usually put together top down and the recognition program planners then try to implement a program that makes sure they don’t spend any more money than that.  Improving employee satisfaction, improving the culture, improving communications, improving anything takes a back seat to not spending any more than the given budget. 

Traditional employee incentive programs that did target a true bottom line result were budgeted differently.  Companies used a specific % of income during the program period as a method to determine how much to spend.  The % was 1-3% of income of the participants in the program for a long term (annual) program and 5% to 15% for shorter ones.  Or, they set aside a % of the sales or profits generated by the program as the budget. 

If you want to determine how much your senior management believes in the importance of employee recognition just do some simple math.  Take 100% of any monies you spend on any non-cash awards you use to recognize employees and divide that number by the number of your employees.  Then honestly ask yourself if you think that number would truly motivate you to improved performance?

So when you are considering a budget for employee recognition, the closer you can get to objective achievement numbers that can be measured, the closer you will get to a budget that will prove motivational.  Otherwise you will be left with taking the number you are given and trying to do the best with it. This is the recipe that produced the ubiquitous Person of the Month programs that were negligible in improving performance of your core employees.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

How to Maximize Your Recognition and Incentive Budget

When implementing employee recognition/incentive programs, one of the toughest challenges is managing your budget.  A number of factors must be taken into consideration when deciding how much to allocate to a given program.

To help make these decisions, Incentive has released a new white paper that breaks down more than two dozen tips for getting the most from incentive spending.  The tips cover a wide range of budget considerations such as:

·       Spending Strategically

·       Leveraging Technology

·       Protecting Your Incentive Budget

A main area to consider is leveraging your corporate buying.  All organizations have dissimilar award budgets spread out over an array of departments and divisions. These budgets are often used to motivate and incent the same employees for different objectives and can in fact be at odds.  You need to total all the awards purchased throughout the organization to find economies of scale. As there are usually different gatekeepers in these silos you may encounter some push back in determining this total for fear that the silos will lose their autonomy. 

The report also includes a section on "cutting strategically," with tips such as "be transparent with everyone across the company" and "prioritize and shake things up."

The full report also has a section on "Making the Case for Value-Based Award Selection" that urges planners to remember that "whether it is a merchandise award, a gift card, or a travel incentive trip, an award will have a greater impact if it is personalized to the individual receiving it." 

Click here for the complete  white paper on budgeting for incentives.   

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Building and Managing an Employee Recognition Budget

Usually before anything else can be done to design and implement an employee incentive or recognition program, you must have a budget.  Without one you’re stuck at the starting gate ready for the race, but the gate never opens.

Over the years we have assisted many companies in building budgets.  Without spending quality time to do it, you will have to deal with obstacle after obstacle in developing the program and constantly be looking for permission to add all the pertinent strategies to make the program as effective as it can be.

Oftentimes, many parts of your needed budgets will already be embedded in the financial workings of the organization but in separate departments or disciplines.  When this is the case, you may find that you are competing with managers of those departments who want to maintain control of those budget dollars.  That can be a common occurrence.

There are common formulas and metrics for building a program budget that all have merit, such as: 

• Percentage of compensation
• Percentage of achievement levels
• Fixed budget design
• Open-ended design

 While these standard guidelines can help create a structure to track a program once approved, they won’t help you get the approval. In the end result you will also need to be able to analyze results and determine how the budget was spent.

Over the years we have seen many guidelines of how to determine budgets.  One of the best we have seen that also includes information on now to sell the budget to executives comes from Citizen Watch Company.  You can download a copy of that guideline here.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Satisfied Employees and Great Customer Experience?

Many companies have come to realize that it’s the employees who make the difference.  All the money spent on research, design, innovation, marketing loyalty etc can go right down the drain when the experience at the point of sale is less than desired.  We all like to trade at places where we feel important, and valued for our business, and our inter action with the employee, whether in person, on the phone, or digitally, can make or break that relationship. 

Numerous studies over the years show a strong positive relationship between employee satisfaction and customer satisfaction. Satisfied employees help produce satisfied customers… conversely, low employee satisfaction and overall low employee morale can negatively affect company operations greatly, causing dissatisfied customers and hurt profitability.

An extraordinary employee experience is the basis for a successful customer experience.  Consider it this way. Your employees are your brand.  If you have a brand promise, it’s your employees who are responsible for fulfilling that promise.  Think of the billions spent in implementing a world-class customer

service effort.  Then compare that to the budgets invested in recognizing and reward your employees who make that world-class customer service effort a success.  Is it really a fair comparison?  Your employees will deliver a customer experience that matches their own experience in your organization. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Unspent Recognition Budgets Don't Improve Performance.

You don't have to throw your remaining 2016 recognition budget down the drain.  Here's how you can use it in 2017.

If you have incentive dollars that are as yet unspent, be sure to use them! Often unspent funds can be “found” by the budget police looking for ways to cut back next year. So adopt a “use it or lose it” attitude and protect your employees from missing out on recognition and reward resources. Anticipate future needs and use those dollars to secure awards that will neither expire, decline in value, nor become outdated. 

When your first 2017 recognition event rolls around, you’ll be happy you did. If your organization is mandating budget cuts and perhaps suggesting that recognition is one of the “best” areas to reduce or eliminate, do not allow your reward and incentive programs to fall prey to those cuts! 

Statistics gathered from an actual program with a life-cycle of 10 years reflect that engaged employees will perform better in ANY market condition. In an up market, a recognition and incentive program will help exceed performance; and in a flat market, a reward program will help you maintain your performance. In a down market, taking care of your employees helps you protect your position and lets your key stakeholders know that you are grateful to them for sticking it out during the rough ride. 

At Ultimate Choice, we can suggest ways to ECONOMICALLY recognize and engage employees with our gift cards solutions that do not expire or decline in value. As always, we impose no program or per card fees, no expiration, and no minimums. Each employee gets his CHOICE of what is personally most enjoyable, meaningful and engaging.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

How Much to Spend on Recognition Programs?

We are often asked how much should be spent on average per recipient in a recognition program.  While there is no hard and fast answer to that, the incentive industry for years presented a formula to clients that were based on the employee’s income and duration of the award program.  If they were trying to motivate the individuals to achieve a outcome that
was quantifiable  based on profits, then the recommendation could have been 5% of income for the period if it was long term (9-12 months) and 10% of income during the program is it was short term (3-4 months). 

Recognition programs that couldn’t be quantified were simply budgeted based on what the company thought they could afford, nothing more.  The more emphasis the company leadership placed on the importance on a culture of positive reinforcement for employees who performed well, the hire the budget per employee.

This dichotomy is one of the single most important differences between incentive programs designed to produce results, and recognition programs that were designed to improve employee satisfaction.  However, drawing a line from satisfied employees the company’s bottom line results has always been difficult to do so it has always been difficult to determine a spend rate for it.

The 2015 Incentive Magazine Gift Card IQ survey asked their respondents how much they budgeted per employee for their recognition programs.  The results were as follows:   

$ Spend Per Recipient	%
Less than $25	11%
$25 to $49	28%
$50 to $99	22%
$100 to $149	17%
$150 to $199	4%
$200 to $499	8%
$500 to $999	5%
$1000 or more	5%

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net