Gift Cards Are a Boon To Employee Recognition Programs

Gift cards as we know them became popular in the early 1980’s and actually started to be used in employee award programs only a few years after that. 

The development of the gift card has been a blessing for anyone who wants to award and recognize employees.  If you think you can find the perfect award that fits every employee you can’t. Unless you only have a handful of employees, you won’t know each of them well enough to offer an award that suits them, at that time.   And we've learned that one size really doesn't fit all.

Employee award gift cards have grown in popularity faster than anything else in the award industry.  In the retail world the growth has been exponential.  In 2004 we spent $20 billion in gift cards and that has grown to over $100 billion annually.  Today it is hard to find company that doesn’t use gift cards somewhere in their recognition mix.

Gift cards have gone from being considered impersonal gifts to being the most thoughtful gift of all. The gift card is a sign of the times - tastes change quickly, options should remain open, and when you use gift cards for employee awards, you’ll always be giving them the award that they want. 

Research shows that:

•         93% of U.S. consumers purchase or receive a gift card annually
•         Consumers spend an average of $213/year on gift cards
•        83% of corporations use gift & prepaid cards for employee incentives

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What Do Companies Spend on Wellness & Safety Awards?

When considering an incentive effort to drive employee wellness and safety one of the first decisions to make is how much to spend on each employee. There has never been any definitive analytical proof that will show you how much it will take to motivate someone to change behavior, or for that matter what award will induce the most excitement.  For years the incentive industry has provided guidelines to help you decide: example: X% of the salary for the program period, but there has never been any empirical evidence to support these rules.  The chart below will give you a good idea of what type of budget companies are using today.

A number of factors go into motivating behavior change.  And while one is the award itself, it is by no means the only one.  If you think by simply offering some type $50-$100 fitness device you are going to motivate an employee to change years of poor lifestyle choices then think again, it probably won’t.  But in combination with the other pieces of the wellness program (not the least of which is well designed communications) a choice of awards can be effective. 

Low Employee Engagement Equals Costly Poor Work Performance

If you subscribe to the belief that low engagement equals low performance, you’ll understand the importance of keeping your employees excited and sustaining the belief that they are valued and appreciated.

Losing an employee that you’ve spent time to hire, train, and bring up to speed  is significant.  The cost of replacing an employee who leaves is at least 30% of that employee’s annual salary.  To put that in perspective, with a $150M annual payroll, just a 20% turnover would cost that company $9M a year!

Employees often leave due to a LACK OF APPRECIATION AND PRAISE – not money!  A lack of something as simple as an unexpected “you did a great job” –  or “we couldn’t have done it without you.”

Many companies use simple “thank you” recognition programs to foster a CULTURE OF RECOGNITION.  Others allow their employees to say thanks to each other with peer-peer programs.  Over the last few years research has shown that positively engaged employees will perform better, last longer, and provide better and more positive experience for your customers.

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