Why Gift Cards Are Better Than Cash in Reward and Recognition
While cash has long been the main reward option for employee recognition in the workplace, gift cards offer a broad set of advantages over cash rewards that should be acknowledged. According to a 2016 Incentive Research Foundation study, 53% of UK organisations offer non-cash rewards. To find out why, here are the main reasons that gift cards are better than cash when it comes to employee recognition.
In most company cultures, talking about cash rewards or bonuses can be considered taboo in the workplace which is less the case with gift cards. Around the coffee machine, employees are more likely to share what they purchased with their rewards like a new TV or sofa. This also provides a great way to indirectly call attention to the award and what was accomplished to earn it. Word of mouth discussions will have a positive impact on the internal interest and participation in your programme, especially if your organisation has a peer-to-peer recognition scheme as more people will want to take part and help improve their company culture.
Often when an employee receives cash, it simply goes into the large “hole” of day-to-day costs like mortgage repayments, loans or energy bills. Gift cards can allow for guilt-free spending to buy something tangible that they may have been wanting to purchase for some time such as new golf clubs or running shoes. For your team, gift vouchers are not seen as compensation but as a reward for their efforts, the main aim of any employee recognition programme.
The tangible gift purchased with the retailer gift card will remind the employee of their organisation and what they did to achieve the reward over time. While they may not remember their cash bonus years later, the recipient will remember the TV or computer they were finally able to buy thanks to their hard work in their role. Memorable gifts can make the thank you even feel more appreciated, which helps drive employee engagement and retention.
It’s not a non-specific gesture like cash, but a gift. The recipient has the choice to spend it on what they want, making the reward personalised to them as opposed to merchandise catalogues which restrict the choice of redemption options. With an internal gift card programme, recipients can even choose how they would like to redeem their reward. These could include restaurants, a variety of retail partners, cinema tickets or even contribute to family holidays.
Pleasing Loved Ones
There’s always a strong motivation for people to give something special to their partners or their children on special occasions like birthdays or at Christmas. Seeing your child full of joy that they finally got their desired games console from their Christmas wish list can’t be replicated or replaced. Another anecdotal example is from personal experience where a recipient in one of our programmes redeemed their reward for jeweller gift cards which contributed towards their engagement rings.
More Beneficial for Employers
From the ease of administration and cost effectiveness, there are many benefits of gift card programmes over cash for HR departments. A 2015 study from Incentive Magazine found that 95% of businesses that offered non-cash rewards in their recognition programmes consider gift cards to be equally or more effective than monetary rewards within their organisations. On an international scale, gift cards, with the inclusion of locally attractive rewards and taxation could be advantageous. Going through a third-party, like Ovation, with an extensive catalogue and the existing relationships with retail partners could prove to be the best solution. Read our recent article to learn more.
To summarise, gift cards can provide more value for your employees and your organisation than cash rewards. While cash often contributes to the daily bills, it lacks the more personal and memorable elements of gift cards. Thanks to their broad appeal, gift card rewards will make your team members feel more appreciated and in turn, increase employee engagement and retention.
To learn more about the power of gift cards in your organisation, get in touch with Ovation today!