How to use it to recognise and motivate your employees

Using Christmas reward and incentives to thank and motivate your employees As a time for thanks and for giving, Christmas has traditionally provided an important opportunity for employers to think about recognising the hard work their employees have done through the year. But new research from Edenred has found the majority of employers are failing to take the opportunity to cement their relationship with employees by giving them an end of year thanks. What’s more, even in the minority of cases where reward is given, employers are doing it in a way which is impersonal or simply gets lost in an end of year pay slip. In the wake of five years of austerity after the financial crisis of 2008, the emergence of zero-hours contracts and the increase in the number of part-time or temporary jobs, it is clear the way employers and workers think about their relationship has changed. Maybe this is behind the no-frills approach to reward and recognition which our research has uncovered. But the fact is, end of year reward still resonates strongly with employees as a way of saying thank you. It may not be an expectation, but it is something which is appreciated and is memorable for employees. It is also something which doesn’t have to cost a lot of money. In this report you will find insight from our research into how employees see end of year reward as well as guidance to the five main areas you need to consider in getting Christmas reward right and maximising the return on any investment you make.

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What do employees think of Christmas reward?

65%

30%

35%

11%

35%

65% of employees don’t expect a reward that means saying thanks can have a real impact

Only 30% of employees got a Christmas reward in 2012

35% of employees say they have never had a Christmas reward

11% can’t remember how their Christmas reward was given

Only 35% get a ‘thank you’ from their manager

Most commonly used reward? CASH – 22% GIFT CARDS/VOUCHERS – 15% WINE – 12% HAMPERS/FOOD – 7% CAN’T REMEMBER – 4% OTHER – 40%

Who expects reward?

41%

26%

Employees under the age of 35 are most likely to expect reward – 41%

Middle-aged employees – 45-54 are least likely to expect something – 26%

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How to motivate with Christmas Reward – five areas you need to consider 1. COMPLETE YOUR PLANNING EARLY In most organisations budgets and attitudes towards Christmas reward, recognition and incentives can change yearon-year. From a sales perspective, progress towards the yearly targets which have a bearing on what you give may be unclear until close to December. Yet for any organisation considering end of year reward, thinking about your budget and starting your planning early on is the first vital step to take. This is important if you are doing it for the first time because (as you will see below) there is a lot to think about if you are going to get it right. If you are in an organisation which is used to giving reward already it is equally important so you can refresh your approach in order to improve its impact as a driver of motivation and engagement. In either case, a fresh approach to reward doesn’t need to be complicated but does need time to plan. That means starting out early to understand what your employees will value - ideally by asking them – and looking at best practice in your sector and among your competitors. You should also ask yourself who are you rewarding and why, whether you are missing anyone out. You can also ask yourself, what could be improved from last year. At the very least, your planning should clarify business and people objectives for end of year reward, outline the processes which will support its delivery and specify how impact on engagement and employee motivation will be measured. One last element of planning is to ensure end of year reward is managed and treated as a principal driver of engagement and loyalty and not seen as a box-ticking administration task.

AT A GLANCE: Getting planning right • Start your planning early – ideally before the Autumn • Establish how your reward, recognition and incentives measure up to employee expectations and best practice in your sector

• Create a plan which incorporates objectives, processes and outcomes which can be managed and measured

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2. CHRISTMAS REWARD… NOT JUST FOR CHRISTMAS? One of the major assumptions which every organisation should challenge is whether you should continue to load all of your budget into Christmas reward, recognition and incentives. Of course, meeting employee expectations that they should get some form of reward at this time of year is a powerful argument in favour of doing this. But when you take a step back, for many organisations and employees, the run up to Christmas is a hectic time: a blur of hitting end of year deadlines made harder by the pressure of personal planning for the festive season and a sense that there isn’t enough time to get everything done. Add in the tide of gifts which come many people’s way at this time of year it is easy for your investment in end of year reward to be lost in this mix – or its impact substantially reduced. So if the goal of end of year reward and recognition is to reward loyalty and hard work while making a positive impact on employee performance we think it makes sense for organisations to think about how that investment can work harder. One approach to doing this is to stretch the investment by splitting reward over December and January. Reward given when employees are struggling with the return to work and face a long wait until the January pay packet is likely to have a greater impact and be more appreciated than reward loaded into December – particularly if employees aren’t expecting it. More radical options would be to split the investment between a Christmas and summer reward or introduce a New Year reward scheme. Whichever route you choose, if your goal is to make a difference to employee engagement and performance, rethinking the timing of when you give reward and recognition can dramatically improve the impact of your investment.

AT A GLANCE: Spreading your investment • Ask yourself when reward and recognition would have the greatest impact for your employees • Think about spreading Christmas reward over December and January • Consider how your budget could be spread to other parts of the year to support your business objectives

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3. CASH VERSUS NON-CASH For many organisations, cash reward in the Christmas wage slip along with a letter from the boss covers off their Christmas reward and recognition – this was what our survey found. Other organisations may go for a combination of a Christmas mini-bonus in cash along with another token of thanks to incentivise employees. If your organisation falls into one of these categories, it is important to consider whether cash reward is really doing the job in cementing recognition for your employee’s contribution to the business. On the plus side, cash is easy to administer and gives the ultimate in choice: it really is down to the employee when and where they spend it. The downside of cash is that it easily gets lost in the bank account, chewed up by bills and may never get redeemed for a specific reward, thereby losing its motivational impact. So if you are looking to maximise the motivational impact of your spend on recognition then the argument for non-cash reward is compelling. By giving vouchers or pre-loaded gift cards you effectively ring-fence the reward so it will be more memorable. You also give your employees the choice which they value while you the employer benefit from the double motivational impact which comes first when the reward is given and then later, when it is redeemed.

AT A GLANCE Cash v non-cash • Non-cash reward ensures end of year reward doesn’t get lost in the mix of personal finance

• Vouchers and pre-loaded cards offer the same flexibility and choice as cash but ring-fence the reward

• Non-cash reward can do a better job of reinforcing the impact of any recognition and be a greater incentive for performance

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4. THE IMPORTANCE OF PERSONALISATION Today’s world is all about personalisation and choice. From what we watch on the TV - and online - to where we shop and the time we choose to do so, it’s an expectation we all have. When it comes to reward, recognition and incentives, personalisation matters not just because it meets this expectation but because it allows employers to give something of value which recognises different people have different needs and priorities in life. Personalisation is also important in providing a valued alternative to the ‘bottle of wine and chocolates’ approach to Christmas reward – something which can leave reward feeling predictable and stale, so undermining its benefits. What this means is that when you plan reward and recognition, giving choice – in terms of what the reward is used for, when it is used and how it is used - is as important as the gift itself. That doesn’t mean you have to give cash. Personalisation can be met by empowering employees with ‘choice’: the ability to choose their own reward. This can be achieved through multi-store vouchers or cards where employees can choose the retailer they shop at which is still the most popular option at Christmas, or increasingly through online platforms with employees redeeming an e-code. In our experience where reward and recognition is relevant it has more impact, so personalisation is critical – something which can then be built on when it comes to the final element: communication.

AT A GLANCE Personalisation • Choice and personalisation are increasingly an expectation for many employees • Vouchers, pre-paid store cards and e-coupons give employees the choice of when and where they redeem gifts

• Relevant reward has more impact for your organisation

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5. SAYING THANK YOU While the nature of your reward and recognition is important, the importance getting the ‘thank you’ right is also critical. As our survey showed, many organisations fail to capitalise fully on the motivational element of reward because they don’t get the communication right - or fail to say thanks to employees altogether. At the heart of good reward communication is face-to-face thanks from their line manager. This allows messages to be delivered clearly and directly to the employee. Managers should be clear about the contribution the employee has made and explicit in why the reward is being given and, of course, say thank you. It should be done through a one-toone and a good communications plan will ensure the timing of these meetings is consistent across the business. A second layer of communication should use team meetings to say thank you to whole teams and reinforce any corporate messages. The final element of the corporate reward and recognition process should be a more formal thank-you either from the CEO or relevant individual in the leadership team. A good communications plan will ensure key corporate messages are delivered consistently while ensuring employees feel their contribution to the business is truly valued at an organisational and personal level through their manager. It will also look at how messages of appreciation can be reinforced early in the New Year to create a more supportive and motivating environment in the post-Christmas return to work.

AT A GLANCE Getting communication right • Organisations need to plan communications so they are consistent in messages and timing

• One-to-one thanks from the managers is a critical element of the process which should never be missed out

• Organisations should seek opportunities to reinforce these messages from a corporate perspective

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Conclusion For many organisations the changes they make each year to Christmas reward, recognition and incentives start and end in deciding what the budget allocation will be. In the current climate where most of us are trying to achieve more for less, Christmas reward represents a great opportunity to rethink what we do and how we do it. With better planning and creative thinking about how reward and recognition is delivered, organisations can improve motivation and employee engagement while laying the foundations for performance in the next year.

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Edenred Christmas rewards and incentives At Edenred, we say treat everyone differently. Treat each person as an individual with different personalities, interests and motivations and you’ll notice the difference in performance right away. It’s this mantra that makes us design incentives and rewards that cater to the individual; never adopting the one size fits all approach. We offer the widest range of multi-channel reward & gift products with the widest choice of redemption options. No other brand in the incentives and rewards market can match the choice of reward options available from the Compliments brand. If you’re looking to engage and motivate employees, offer them the reward of choice.

COMPLIMENTS CARD

A multi-store gift card that’s designed to fit all types of budget and all types of incentive for your employees, channel partners or customers. With over 100 different shopping options that include high street favourites John Lewis, Selfridges, House of Fraser and Toys R Us, there are almost double the number of retailers than other similar products on the market today. The compliments card comes in 4 designs or can be personalised with your company logo and branding within Mastercard® guidelines. Plus, from October 2013 we’ll be adding Chip & PIN functionality to enable enhanced security and wider in-store acceptance thanks to the Compliments Card being part of the Mastercard® network.

COMPLIMENTS VOUCHER

Compliments Vouchers are Edenred’s multi-store gift voucher and can be used at over 130 high street stores and over 20,000 outlets. That’s 40 more national retailers than any other B2B multi-store gift voucher on the market today, but more importantly; more choice for your employees and customers! With over 350 independent retailers, Compliments Vouchers offer unrivalled choice for your employees covering shopping, dining, activities, holidays and more. Compliments Vouchers are available for well-known high street brands including John Lewis, B&Q, Argos, Ernest Jones and Oasis.

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COMPLIMENTS SELECT

Compliment Select is an online reward platform that lets you issue almost any kind of reward, of any value, to any recipient, in any location. Reward Managers issue the reward online, then recipients can also redeem their rewards via an easy to use online platform and choose from the full Compliments range of multi-store and single-store retail cards and vouchers, incentive travel and experience days covering over 350 brands. We then fulfil their order and deliver to the selected address. The platform is easy to set up, can be branded with your logo and can be used throughout the year as an on-going reward tool.

COMPLIMENTS PASSPORT

Once Christmas has passed, attention is often drawn to booking a holiday. The Compliments Passport voucher provides an unrivalled choice of holiday rewards for worldwide destinations and resorts and is a perfect way to motivate and reward high performance individuals. You can either decide on the destination yourself, or create a Compliments Passport to a specific value and give the recipient the freedom to travel wherever they wish. Vouchers can be redeemed with our in-house ABTA approved travel agency who also have a dedicated team of travel advisors to help recipients find their perfect holiday from top, well known travel operators.

COMPLIMENTS EXPERIENCES

Compliments Experiences is an incentive gift card from Edenred offering card holders the chance to redeem rewards in the form of over 1,500 experiences and activity days. From driving fast cars to relaxing in luxury spa’s, Compliments Experiences has something to suit every taste and every budget. You can choose to reward recipients with specific experiences or give them the freedom to make their own decisions. Employees will receive an experience gift pack, allowing them to book their chosen experience as and when they like.

RESTAURANT AND FOOD VOUCHERS

Christmas is a time for enjoying good food and with our easy to use restaurant and food vouchers, your employees can eat and shop at over 33,000 food outlets nationwide. From coffee shops, sandwich shops, restaurants and fast food outlets. We cater to all tastes. Easy for you to implement, the vouchers can be purchased in a range of price denominations and used anytime during the year, not just for Christmas. This Christmas, why not help your employees cover the cost of their Christmas food shop or treat themselves to a family meal to celebrate the festive season. Available to use in food and restaurant outlets nationwide including Tesco, Café Rouge, Bella Italia and Sainsbury’s.

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EMPLOYEE SAVINGS

Christmas can be an expensive and stressful time of year so Employee Savings is a great way for you motivate and engage your employees by offering exclusive savings, discounts and offers for everyday spending such as supermarket shopping or large ticket items, such as a laptop, holidays, or gifts during the holiday season. Not just for Christmas, Employee Savings are available as a motivational tool all year round featuring: • Over 90 lines of reloadable shopping cards, vouchers, SMS vouchers and e-vouchers to spend at over 350 top brands such as Debenhams, Sainsbury’s and PC World. We’re proud to say we’ve got the largest selection by far compared to other schemes like this on the market today! • Over 10,000 GPS located instant savings and coupons available on the mobile version of the website • Over 400 discounts to redeem in-store, online or over the phone • Over 1,400 cash back options on insurance, utilities and lifestyle products

MYWORKOFFERS

At Edenred we don’t believe that your employees should miss out on special offers, lifestyle discounts and savings because they work in a smaller company. MyWorkOffers is an easy-to-use online platform giving your employees access to all the same benefits as Employee Savings, but at the fraction of the cost. The platform can be branded with your logo and is a great way to motivate employees, show them you care and increase engagement, all from as little as £4 per employee per year! So help your employees save over what can be an expensive time of year and give a gift that is not just for Christmas, but can be used all year round.*

HAMPERS

The ultimate gift for food lovers, our luxurious food hampers come in all shapes and sizes and can be themed to suit all tastes.

*Minimum contract value £200

Get in touch with us today to discuss how we can help motivate your employees using Christmas rewards and incentives and to discuss your reward and recognition strategy for 2014.

Call: 0844 264 0059 Visit: www.ComplimentsFamilyChristmas.co.uk Email: [email protected]

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