Is there such as a thing as a traditional reward these days? Previously the traditional reward was a pay rise or cash bonus, but with gift cards and ecards becoming increasingly popular has the traditional pay rise been gazumped?
Since 2003, the growth in the gift voucher and card market has been at between 5% and 15% per year, according to the UK Gift Card and Voucher Association (UKGCVA). Paper gift vouchers have been with us for a very long time and, although they continue to remain popular, there are now other options on the market such as:
- Electronic gift cards
- e-vouchers
- Voucher codes distributed through text messages
- Pre-paid debit cards
Businesses in all industries are using gift cards and e-vouchers to recruit, recognise, reward and motivate employees. And there are numerous studies showing how gift cards and gift vouchers contribute towards improved business results.
Perhaps one reason for pay rises and cash bonuses falling out of favour, is that these have less of an impact when it comes to remembering the reward, and why you got it. Often cash gets eaten up with everyday outgoings, which means there’s no positive reinforcement, no memory is created. Yes, there are companies who insist you spend your bonus on a treat, but it’s incredibly difficult to enforce this.
In fact, a survey of more than 1,000 employees by Wirthlin, a US market research firm, found that cash incentives had limited impact. Some 29% of respondents said they spent the cash on bills, 18% could not remember, and only 9% recalled buying a special personal treat.
A key component of motivation theory is that there should be a close link between the employee behaviour, or action, and the reward. In this way the employee associates the reward with their performance, and as a result thinks, ‘I’ll get that reward again if I perform better’.
In another study by the International Society of Performance Improvement, it was found that employee performance increases by an average of 22% when tangible rewards are offered. And they have an even bigger impact on team performance, where tangible incentives can increase performance by as much as 44%.
The beauty of gift cards and gift vouchers is that they appeal to everyone. And, because they allow employees to choose a reward that’s right for them, it becomes a treat or a memorable experience, that they can share with their family or loved one. No wonder gift cards are seen as more of a ‘treat’ and viewed more favourably by employees!
The ability to be associated with major, ethical or prestige brands is a big benefit for employers. Gift cards from such brands are a constant reminder to employees that their employer has rewarded them, leaving them feeling valued and motivated. However, the employer does have to do their homework first, and identify which brands their employees would love to receive gift cards or vouchers for.
Other benefits for employers include a higher perceived value, due to bulk buy discounts that are often available; versatility; and the ability to brand them in line with the company branding. Unique, dynamic and powerful are some of the words used to describe gift cards, add safe and secure to that, and you have got yourself a full house.
E gift vouchers and gift cards are becoming an increasingly preferred reward in both the business-to-business and business-to-consumer sectors. They are memorable, and they offer choice, enabling employees to redeem them for merchandise, experiences or travel that they wouldn’t otherwise buy for themselves.
