AT NATICK, MASS.-based Jordan's Furniture, executives regularly stock up on hundreds of concert tickets for shows in the Boston area. No, they're not scalpers or especially ardent fans. They buy the tickets to reward employees. Over the course of the year, department heads are empowered to give the tickets to employees at their discretion. Call it random acts of appreciation.
On-the-spot rewards — impromptu gifts for a job well done — have become an increasingly popular tool to motivate employees. “It's a niche that has really taken off,” says Ken Cheda, vice president of corporate sales at The Best Present Co., Concord, Calif. He adds that activity has spiked in the last few months, as companies look for new and different ways to hang onto their best people.
The beauty of recognizing employees with gifts out of the blue is that it's simple and relatively inexpensive. More companies are finding that a little goes a long way toward building a satisfied work force.
For starters, on-the-spot rewards are an effective way to develop employee loyalty, says Cynthia Niemczyk-Hodges, president of World Incentives Inc., a Sturbridge, Mass.-based incentive management company. This is particularly important in today's volatile job market, she adds.
Just as significant, these programs don't have to break the bank. At some companies, recognition may come in the form of a handwritten note, at others, a gift certificate. But it's not the size or type of the reward that matters, says motivational expert and CMI columnist Bob Nelson, PhD. “It's all about capturing the moment,” says Nelson, who has written several books including 1001 Ways to Reward Employees and The 1001 Rewards & Recognition Fieldbook. “Every company needs something quick and simple, timely and spontaneous.”
The benefits of on-the-spot rewards go beyond savings and employee loyalty. Spur-of-the-moment gestures can reinforce and encourage positive behaviors, acting as physical reminders to keep up the good work. They also help to “create a buzz” in the workplace. How? Consider a boss who tries to get momentum going by giving $10 to the person who makes the most sales in a given day, or who gives movie passes to an employee who worked through lunch all week to meet a deadline. When purchased in bulk, movie passes might cost a couple of dollars each, but to employees, they have a much higher actual value ($15 to $18, depending on where you live), and an even greater perceived value because of the recognition component.
In many cases, rewards don't have to have a monetary value to be effective, says Nelson. One of his client's gives out the “sparkplug award” — a gold-painted sparkplug — to an employee who provides a spark to the office. Pins are another token of appreciation that can commemorate hard work. Fun and quirky gifts are also valuable, if for no other reason than to bring a smile to someone's face.
John Thomas, manager of operations at Fort McMurray, Alberta-based Syncrude Canada Ltd., has instituted a Pay It Forward award, a plaque inscribed with the name of each winner. Thomas initiated it by presenting it to a senior staff member for exemplary work. The recipient then gives the award to someone else at his discretion, and so on — thus the name. Depending on an employee's accomplishment, Thomas also has movie passes and cash.
Gift certificates and cash are favorites, but the trend is toward the personal.
Chris Reagan, president of Get Ahead Pro Speakers Bureau, Nottingham, N.H., tries to give deserving personnel something that he knows they will value on an individual level. Recently, his information technology specialist put in long hours to finish a project. Not long afterward, Reagan learned that the scanner on the employee's home computer had broken down. So, to show his gratitude, Reagan replaced the scanner. “It's an incentive that I know he's going to really appreciate,” Reagan says.
Syncrude's Thomas finds that personalized letters are also effective. With about 600 people reporting to him, Thomas is responsible for a lot of performance reviews. After identifying the cream of the crop, Thomas writes personal letters to each, extracting points from the performance appraisals written by their superiors.
World Incentives doesn't work with gift certificates at all. “Many folks don't remember they had been given a reward with gift certificates,” explains Niemczyk-Hodges. Her company prefers programs in which employees accumulate points and then use them to buy merchandise from customized online catalogs.
Simply giving employees a choice of rewards personalizes the process, Nelson says. Some employees may appreciate a free car wash more than a free sundae at the local ice cream parlor, for example.
The Best Present Co., which counts Washington Mutual, Toyota, and McDonald's Corp. among its customers, has taken that lesson to heart and developed a program that emphasizes personal choice. Best Present sells gift cards to corporations in denominations from $5 to $2,500. The cards act as debit cards and can be used anywhere that MasterCard, which backs the program, is accepted.
One Best Present client, a hospital, recently ordered 13,000 gift cards in various denominations. “There's a lot of business opportunity out there,” says Cheda, particularly around the holidays. “Companies are looking for creative ways to motivate employees.”
While it's worthwhile to have at least one form of recognition that has no forms, approvals, or evaluations, on-the-spot awards do run the risk of being seen as capricious. “By being subjective, you can end up being arbitrary,” says Bob Nelson, PhD, motivational expert and author. “Some managers will rarely use them, while others will pass them out like candy.” Some managers, he continues, will be thoughtful about their use, while others will only use them when they feel guilty or have made a mistake themselves.
A good check-and-balance system should include a review of how on-the-spot rewards vary from manager to manager and from department to department. It's also important to remind department heads of the purpose of the program, especially those managers who aren't using it.