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So Plastic Gift Cards Are Most Popular Incentive

They offer much of the flexibility of cash and let employers raise their profile by adding logos or personalized messages.

September 21, 2006
Related Topics: Recognition, Compensation, Benefits
The employee at JK Harris & Co. had helped a reporter understand a complex tax issue on very short notice, even writing up a detailed explanation. Josh Baker, marketing director for the Charleston, South Carolina-based tax resolution firm, wanted to quickly express his thanks.

    So Baker sent his colleague a compliment via e-mail the next day. Underneath the notebook on his desk, he told the employee, he would find two gift cards to Outback Steakhouse.

    Baker could have provided a cash bonus instead. But a cash bonus must be processed through payroll, weakening its timeliness, Baker says. A gift card, he says, "provides instant notification that your work is appreciated."

    Gift cards remain the most popular employee incentive, providing much of the flexibility of cash, but with a personalized touch. Companies also can raise their own profile by adding corporate logos or personalized messages, recognition experts say.

    Two-thirds of managers reported using gift certificates or gift cards to recognize employees, according to a 2005 survey of 235 managers conducted by Northwestern University’s Forum for People Performance Management and Measurement. By comparison, 59 percent used cash rewards and 57 percent relied on merchandise incentives, according to the survey results, released in July.

    A gift card can provide bragging rights several times over, beginning with recognition among workplace peers, and then later when that employee pulls out the plastic to pay for dinner or that long-desired television, says Nancy Serrato, president of the Incentive Gift Card Council. Depending upon how the card is designed, it can also become a traveling billboard for the employee’s company.

    The card or accompanying sleeve can be personalized with your company’s logo, says Serrato, also director of corporate gift cards at Black Hawk Network, a subsidiary of Safeway. Technology also is available to implant a voice message into the card itself, so the employee’s manager could deliver a personalized thank-you.

    The majority of employers, 67 percent, spend between $25 and $150 on gift cards or gift certificates per recipient, according to Incentive magazine’s 2006 Gift Cards & Certificates Facts Report. The survey involved 591 respondents, 83 percent of whom used gift certificates or cards in their incentive programs. Nearly 70 percent thought gift cards and gift certificates were as effective, or more so, than cash; 13 percent believed them to be less effective.

    Dining and restaurant cards were the most frequently purchased card, with 76 percent reporting that they had purchased those in the previous year, compared with 68 percent in Incentive’s 2005 report.

    One quickly emerging category is the sports-related gift card, often tied to a particular team. That provides intriguing opportunities for both employee incentive and company promotion, Serrato says. For example, Coca-Cola could give its employees San Francisco Giants cards that also contain the soda company’s own logo.

    "That Coca-Cola employee at the plant loves the Giants," Serrato says. "And that’s what is going to motivate them. They are going to keep that card after the value is gone because it says ‘San Francisco Giants.’ "

Workforce Management, September 11, 2006, p. 30 -- Subscribe Now!

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