Gift cards and accolades boost employee performance. Except when they don’t.
By Jay Whitehead
What do you think of the reality that most of today’s workplace pats-on-the-back come through a flat-screen? Or that today’s primary form of employee reward is a prepaid debit card? Or that today, employees from the same company often meet each other online via Twitter, Facebook, LinkedIn, or the company intranet more frequently than they do in person? Or that more workplace Skype calls took place in the first quarter of this year than there were faxes sent?
Clearly, this is not your father’s workplace.
The new digital reality frames the four biggest trends in employee rewards and recognition. In fact, it even explains which of these four is actually a false trend (yes, one is not a trend at all but rather a worst-practice. Your job is to figure out which one—the answer is at the end).
Trend 1: Plastic rewards out-rock gold or silver or diamonds or any other rock.
Trend 2: The social media era means that you can avoid physically thanking or patting today’s employees on the back—and that sending them an online pat is actually more impactful.
Trend 3: In the social media era, it is a big mistake to assume that privacy is dead and that the only valuable recognition occurs when it is posted online.
Trend 4: Some (limited) gaming of any company employee points system to get killer swag is unavoidable, but don’t worry—once self-nomination and cross-nomination scammers get revealed, they’ll stop fast.
Let’s examine each so-called trend with a sharper eye.
Trend 1 actually happens to be true. In 2011, the dollar volume of prepaid value cards given as employee rewards in North America out-stripped jewelry or other physical gifts by up to 5 to 1. Truth is, cards are easier to distribute, transferrable, more fungible, and more in demand than any other reward type by a long shot. Yet cards are not without their detractions.
The downsides of reward cards are widely known. First, many come with expiration dates or fees that eat up the value on the card, although recent laws limiting fees or expiration have helped to curb some of these risks. Second, some vendors make redemption to get the cards rather difficult, which increases “breakage,” or card value expiration, and that hands the cards’ value right back to the vendor. Third, cards are often store-specific, and there have been many cases of stores (anyone remember Circuit City?) that have gone out of business, stranding millions of dollars in value. And fourth, many employees who get a store card as a reward and redeem it for a gift end up associating the gift with the store, rather than with their employer.
Trend 3 is also true. Contrary to a common web-world proclamation, privacy is not dead. Often, the most valuable online and real-world recognition is private or one-on-one. Public acclamation is good, but under certain circumstances private is even better.
Trend 4 is true as well. As company reward and recognition web tools have proliferated and improved, many employers have graduated from level-based, years-of-service award programs to points-based performance programs. Points-based programs award points for employee behaviors that drive company results, and have been proven to boost workforce performance. While newfangled points-based programs are increasingly popular, they do have two main challenges.
First, getting employees to redeem their accumulated points for awards can be tricky, It might require a savvy service provider to carefully calibrate the points award levels with the prices of the items in the gift redemption catalogs. Second, as employees have become more sophisticated online, the ranks of those who “game” their points programs have risen. For example, employees who can nominate each other for points have been known to cross-nominate in large quantities and share the resulting award loot. There have also been cases of managers taking kickbacks for giving their employees bigger awards than were earned.
Finally, Trend 2 is false. Plenty of recent research indicates that an online pat on the back is nowhere near as impactful on performance as the real thing. What’s more, while social media has revolutionized many jobs, it has not altered basic human psychology. For its sheer performance-enhancing value, “thank you” in person still beats the digital version, nine times out of ten.
Jay Whitehead is founder and publisher emeritus of HRO Today magazine. You can reach him at firstname.lastname@example.org.