When you’re making a gift list and checking it twice, are you including something special for the employees of your small business?
"The holiday season can be a fun, festive but often stressful time of year," says Kara Simon, general manager of 3Cheers!, a company that helps employers create motivation programs for their staff. "We recommend that companies spread holiday cheer to their employees with a little something extra, but that doesn’t mean it has to break the bank. There are many low-cost and even no-cost ways to reward staff during the holidays. You could host an office potluck, write handwritten notes of appreciation or hand out additional time off."
The Cash Bonus Question
Are year-end bonuses an expected reward this time of year? "The long-time tradition of Christmas bonuses varies by company," Simon says. "If companies choose to go the bonus route this holiday, it’s important to be very cautious. Year-end cash bonuses can often become an entitlement rather than an acknowledgement of good performance. When that happens, employees believe the holiday bonus is a given and sometimes even spend the cash before it’s in hand." Simon says it's better to tie bonuses to performance so employees know they have to earn them.
If you want to give employee gifts, stay away from cash. "It’s easy to choose cash as a reward because it’s flexible and it’s typically what people say they want," Simon explains. "But the reality is, non-cash gifts like gift cards, merchandise and other rewards have a longer-lasting impact on the recipient, resulting in stronger motivation and heightened performance."
Tim Houlihan, vice president of the reward systems group at BI Worldwide, a global provider of incentive solutions for businesses, agrees with Simon—your employees may say they want cash, but it's often not the best staff motivator.
"People say they prefer [to give] money because they believe it's the best motivator," Houlihan notes. "But research is clear that money and gift cards aren't the strongest motivators. And store-specific gift cards aren't really gifts—they're more like a discount and they rarely cover the purchase cost of what you want. It’s almost like your boss offering you a Groupon for a good deal on a TV."
So what's better than cash? "The best rewards are meaningful and luxurious—something we’d love to have but wouldn't buy for ourselves," Houlihan says. "Paid time off is a great example of an awesome gift."
Motivate All Year
While motivational gifts may be top of mind during the holiday season, it's a good strategy to give motivational rewards all year long. "If you wait too long to reward someone for their efforts, the connection between the reward and the behavior becomes diluted," Simon says. "So instead of waiting until the holidays to express your thanks, companies should spread rewards throughout the year. That way, they can continue to motivate people year-round.”
"Our memories are too short to hang onto motivation and recognition for an annual event unless it’s a really, really big deal,” Houlihan adds. "The best thing to do is recognize people regularly but in varying degrees. Making a really big deal out of turning in a report on time would be odd, but a simple recognition is nice. Say, 'Hey, thanks for getting this report in on time. I know you’ve been busy with lots of projects, and I really appreciate this.' "
And don't make your recognitions few and far between, he adds. "I have a chart on my recognition dashboard that tells me how many days it’s been since each of my team members has been recognized and how many recognitions they’ve received in the past six months," Houlihan says. "I pay attention to that chart so I can make sure I’m doing my job as a manager in recognizing the effort and achievements of my team members."
Not all staff responds to the same motivation, either. "My Millennial team members need recognition a few times each week while the Boomers can go up to a couple of weeks without a notice," Houlihan explains. "The best recognition for a Millennial will refer to how independently they accomplished something."
If you know your employees well, you’re more likely to select the perfect motivator. "A best practice for choosing motivational gifts is for business owners to know their workforce as individuals rather than making assumptions based on gender, age or lifestyle," Simon says.
Houlihan agrees. "Flowers might be really meaningful for one person while the latest Bluetooth speaker might fit someone else best," he says. "Right now, we’re seeing movie tickets as the No. 1 redeeming item. It's a special treat, especially for working-class families."
“When executives take the time to know their employees," Simon says, "they're able to select gifts that are personally meaningful, making them much more memorable and motivating.”
Read more articles on employee motivation.
This article was originally published on December 25, 2014.