Recognise This! – Employees repeatedly ask for gift cards as the reward mechanism, yet business leaders cling to old-school merchandise out of fear and habit.

My day job is consulting with some of the world’s most interesting and innovative companies as they think through their ambitions for a strategic employee recognition programme – their goals, metrics for success, and programme design details.

A key element of any employee recognition and reward programme are the rewards. The challenge with any reward scenario is ensuring the rewards are what the employees want. A recent survey business leaders reported a disconnect between the rewards employees want and those the company offers:

    * 52% of business leader respondents said they used merchandise as part of their reward programme
    * However, 39% admitted merchant gift cards would be most appreciated by recipients (only 4% said merchandise would be)

This fully aligns with research conducted by the Stanford Graduate School of Business that found when even just a few gift cards are added to the mix of rewards in a traditional merchandise programme, the gift cards quickly become 90% of the rewards redeemed by employees. This is especially true when employees are given full choice from thousands of options of what gift cards they would prefer (as opposed to simply being handed a gift card pre-selected by a manager to a location the employee may not frequent).

For the last three years, preference for gift cards also continues to grow as reflected in surveys conducted by Incentive Magazine and illustrated in this graphic.  Research clearly shows a key trend and employee preference in reward, yet many cling to old practices.

What do you think is the reason for this disconnect?