Gift Cards
17 08 2009People Report tweeted today that 65% of all the companies they survey use gift cards to recognize and reward hourly employees. So, if you’re in the 2/3 of employers doing this, congratulations! Obviously you’re on to something.
But just as with any reward program, if you’re not doing it right, gift cards are just going to be a waste of your resources. Remember: the purpose of any reward program isn’t to make your top performers feel good - it’s to make sure that they continue to perform well, and to motivate others to perform well.
Here are a couple questions I think you should ask about that gift card you’re about to give an employee as a reward to make sure that you’re getting ROI on the gift cards:
Is this gift card to somewhere the employee will want to spend it?
It’s hard to choose gift cards that will please everyone. In fact, common wisdom holds that you can’t please all the people all the time. My advice here: DON”T TRY TO DO THAT. Instead, pick a few different, more specific gift cards, so when your Chipotle junkie wins you a customer for life, he can have a burrito instead of five bucks to the nearest big box.
Is this gift card’s value in line with what the employee did?
A friend of mine once joined a stranger to drag a drowning woman out of her car after she crashed it into a ditch. She later sent him them both checks for $200. He said to me, “I never knew you could put a value on a human life. Apparently hers was worth $400.” When you put a value on a given task by providing a reward for it, your Millennials will do the math. Make sure that the value you communicate to your employees is the value you want them to place on a given task.
A related question I’d like you to consider here:
If you don’t reward your employees for doing something, are you telling your Gen Y employees that the value of that task was zero?
I’ll share my thoughts on this with a post Wednesday, but think about it, and share your thoughts in the comments section!
TJ - thanks for the RT’s on twitter and the spontaneous blog post - at least it seems very spontaneous - here’s something else I’m curious about - do Gen Y ee’s care if the awards are a result of being identified by a supervisor vs. another employee or a customer - or is it again tied to it being thoughtful and appropriate? Joni
You hit on a couple of important points…
1. Choice - people want choice - but too much can drive them to choice paralysis. Gift cards for specific places - unless the choice is huge - always run the risk of unsatisfied recipients. However, a “universal card” like a VISA will pretty much get lost in the income stream and be used for gas or groceries.
2. Putting a value on the behaviors - while important to the company to manage costs - putting a $ value on behavior always leads to opinion conflicts - especially in situations where the reward is for something linked to a social norm versus a transactional effort. It’s easy to say - a sale is worth X dollars - less so when it is helping someone complete a task or get a shipment out the door on a Friday.
One more thing - none of these issues are GenY things - they are “people” things.
Check out our blog if you want more info on the whole psychology of incentives and motivation.
Great post, TJ. The good folks at People Report are on the leading edge of employee motivation and you can trust that their research is sound and accurate.
It’s always been my contention that gift cards are certainly something managers to keep on hand for immediate recognition when catching a young employee doing something right, but they lose their luster when they are dolled out like jelly beans. For example, let say Jamie works an hour after her scheduled shift to handle a complaint from a cranky customer, so the manager hands her a $10 iTunes Gift Card for going above and beyond the call of duty. The next weekend, Jarrod pulls a double and reorganizes the entire stockroom, and his manager hands him the exact same thing.
Won’t this come back to work against the manager?
I have never been a fan of gift cards- even on a personal level I think gift cards are pretty much the most thoughtless “gift” on the planet. Not to mention the fact that dollar for dollar you only get just what you pay for! I manage two franchise locations and have almost NO budget for incentives/rewards for my team, which forces me to be creative. I hand out coupons/vouchers for things like “Have Your Manager Work Your Shift But Still Get Paid” and I am a perpetual bargain-hunter… I snatch up any clearance item I can find that could potentially serve as a “prize” for my crew. You’d be amazed at what kinds of cool yet inexpensive things you can find if you just look! The rewards I give are fun, spontaneous and personal- my staff enjoys the fact that the rewards are ever-changing and I am able to stretch $20 a lot further than a $20 gift card!
Joni: It’s always a pleasure to share good info, and this post practically wrote itself after I saw that fact. To answer your question, I think that’s another case where managers will have to figure out which type of feedback will motivate individual employees - some will value peer input over anything else, while others will want to know that their boss likes what they’re doing. Actually, the one that still gets me is if a boss tells my parents I’m doing a good job - GC or no, those are two people I’m always happy to impress.
Paul: I absolutely agree that these concepts aren’t bounded just to Gen Y.
Eric: I agree that GCs shouldn’t be handed out like candy so that they can have a high value attached to them. And I think that you and Paul both hit the issue of value on the head - when two accomplishments that have differently perceived values are rewarded equally, it can create conflict.
Jenna: RIGHT ON! I’d love to hear about some of those!
my fiance works at a company that gives out giftcards that increase within the calendar year every quarter for safety. if the individual person does not have an accident they get $25 for the 1st quarter and it doubles each quarter until the year starts over. my man personally saves these up and uses them for video games that he’d like to purchase or other things he’d like to buy. the gift cards they get are wal-mart which no one has complained about.
so say my fiance gets his $25 the 1st quarter but was injured in the 2nd he’d not get a gift card but the 3rd quarter he’d start at $25 again.
at the end of the year if no one has had any accidents they get a huge bbq party paid for by the company. so far its worked out well and for as long as my man has worked there they have a bbq
This is a great example of tying a reward’s value to the accomplishment - a longer time = a greater reward. Thanks for sharing!
The funny thing about the $200 was that I used it on gas. I like how you were able to maintain my dryness of the comment in your entry.
As far as rewards and companies go, I work in a commission based field, so my performance directly influences my paycheck. The catch here is that there are many things that I do outside of what my normal job requires, but when a manager/supervisor(I have been in this position) witnesses this it is imperative to show your employees that those actions were important to the company.
Example: My detail department guys make $8 an hour and work very hard every day from 7-6. So I make it a point to get them a 12 pack of beer each at the end of every month not because we all know the beer cost only $10 bucks; but for them the idea that I went out of my way on their behalf shows my invested time to them as important employees of our company.