Gifts of recognition boost staff motivation

If you read nothing else, read this …

  • Small gifts can be more visible and therefore motivating for staff than more expensive perks that can be overlooked.
  • They can send a clear message to staff that they are valued and create a buzz in the workplace.
  • Such gifts can include a bunch of flowers, champagne, a voucher for a meal for two, or chocolates.
  • To maximise the gifts’ effectiveness, employers should tailor them to suit the profile of their workforce.


Small tokens of appreciation for a job well done can often be a more powerful staff motivator than expensive benefits, says Jenny Keefe

Workers at computing support company IT Lab believe in fairies. Not the type that live at the bottom of the garden, but mystery fairies who leave little gifts, such as chocolates, cups of tea or other treats, on employees’ desks. The company, which has 62 staff, also gives other small presents, such as champagne and £25 Amazon vouchers.

Sometimes it is simple gifts that excite staff the most, says Sebastian Gray, IT Lab’s managing director. “We have our main company benefits, such as pensions and private medical insurance, but these sit in the background and largely go unnoticed after the initial signing of a new contract,” he says. “Recognition and reward needs to be an ongoing process to keep our staff motivated and their morale high.”

IT Lab is not the only employer that has discovered the joy of giving. According to the Chartered Institute of Personnel and Development’s (CIPD) Reward management survey 2010, 41% of organisations reward workers through recognition schemes.

Traditionally, employers may have assumed that expensive pensions and flexible benefits plans drive employees, with their huge price tags boosting motivation. But every month, workers across the country open their pay slips, barely noticing a £150 employer pension contribution before casting the slip aside. But a simple bunch of tulips to say thank-you can bring real cheer.

Powerful psychological effect

David Tong, a senior consultant at Mercer, says: “Small gifts have a powerful psychological effect. This effect can be disproportionate to their value when they are viewed by the recipient as recognition of a job well done or a special effort made. Sometimes employees are happy with a word of thanks and do not feel a small gift is necessary. However, the act of giving is a strong, almost ceremonial way to provide recognition to employees.”

Gifts, then, are about sending a clear message to staff that their employer appreciates them. Neil Conway, senior lecturer in organisational psychology at Birkbeck University, says: “Small gifts in the short term may boost an individual’s mood or morale. Gifts may also have a longer-term effect by making the recipient feel valued by their employer. In other words, they are symbolic of being party to a caring relationship.”

A case in point is marketing communications firm Peppermint PR, which hands out bottles of wine, manicures at posh beauty salons and vouchers for meals out. Suzy Glaskie, the company’s managing director, says: “There are no hard and fast rules about when to offer gifts. It is just when I feel someone has really pushed the boat out and gone above and beyond what you would expect, for example if a colleague has been unexpectedly absent and an employee has been landed with loads of extra work and hassle, and has risen to the challenge with good grace and a no-problem attitude.”

Single out individuals

The best strategy is to single out individual employees, says Carolyn Axtell, senior lecturer at Sheffield University’s Institute of Work Psychology. “Often, all staff get bonuses and a pension, based on an organisation’s performance rather than the individual’s,” she says. “To be singled out for praise or to be given a gift that shows appreciation for particular actions is far more motivating because it shows individual efforts have been appreciated. This is more likely to motivate someone to repeat the same positive actions.”

So what kind of presents work best? Bob Nelson, author of 1,001 ways to reward employees (Workman, 1994), says: “I am convinced almost anything can be rewarding, depending on the people involved, the context and the timing. One typical example is the HP senior software engineer who burst into his manager’s office to announce they had fixed a software problem. His manager literally groped around his desk and gave that employee a banana from his lunch. The employee showed everyone the banana the boss had given him and explained why. I have also seen tokens used for recognition, [such as] silver dollars, gold-plated quarters, pebbles, used trophies and even rocks.”

Employers should carefully consider what type of gift to offer. Justine McLennan, personnel and recruitment manager at communications technology firm Metaswitch, says: “Spend money wisely. Choose things that have broad appeal and impact. It is always more effective to have something that can be spread to a wide selection of employees, rather than something expensive for a smaller target group. Provide clear guidance to managers, so the policy is applied equitably and with sound and consistent judgement. Be flexible and open to ideas. Get feedback from people and find out what they value and appreciate.”

However, it is essential to match the right strategy to the right person. Ian Gooden, chief operating officer of HR consultancy Chiumento, says: “The real key is to know and understand a team’s motivational drivers. Even then, it will often be the case of satisfying the many, rather than the few. Whatever employers offer, it will appeal more to some than to others. It may also be seen as a waste of money in tight times, so make sure the gift is actually meaningful.”

For example, hay fever sufferers could be aggrieved by a bunch of flowers and teetotallers will be unimpressed by a bottle of champagne, he adds.

Staff feedback is crucial

So listening to staff feedback is crucial. Laura Meneaud, HR director at lingerie retailer Bravissimo, says: “The biggest thing is to listen to employees. Ask them what would make them feel appreciated, valued and engaged. It is not always about gifts, but can be about how they are managed, whether they feel listened to, and how they feel about their work-life balance.”

Whatever the employer’s budget, an element of surprise is crucial. An expected gift at a specified date becomes just another dry financial contract, says Peppermint PR’s Glaskie. “Do not hand out gifts willy nilly all the time, otherwise they will lose all impact and will come to be expected. At that point, people will be hacked off if you do not whip out a bottle of wine.”

Birkbeck University’s Conway says goodies dished out at specific times become a perk, which, when withdrawn, will lead to feelings of disappointment. “The gift will become expected and cease to motivate,” he says. “Rewards given infrequently and not according to a set schedule can be more motivating. This is because the recipient does not become conditioned to receive the perk.”

Employers should also consider how they hand over the present. “Do present the gift with genuine warmth and a sincere ‘thank you’ or ‘well done’,” says Glaskie. “Employers can hand over the most expensive bottle of wine, but if it is done grudgingly or in an impersonal, imperious way, that will really take the shine off it.”

When it comes to paying for presents, employers need a specific, but modest, budget, says Martha How, a consultant at Hewitt Associates. “For example, £5 per employee per annum can be used to reward 5-10% of employees for exceptional short-term effort. Obviously, the bigger the budget, the greater the scope for rewards.”
But How warns employers against using their own-brand products as gifts, because workers may view this as being cheap.

Darker side to giving

There can also be a darker side to gift giving. For all the popularity of the small gift model, Birkbeck University’s Conway has doubts about it. The division of gifts is highly emotive, he says. “Employees who do not receive a gift, but feel they are entitled, may feel inequity and favouritism takes place. Gifts mean a degree of spontaneity and stepping outside of custom, so are particularly prone to claims of unfairness.”

Then there will be those who view a nick nack as a trivial token. Jonny Gifford, senior researcher at the Roffey Park Institute, says: “If a line manager does not treat someone with respect, or employees feel they are consistently put under unreasonable pressure, a team treat may do nothing to boost engagement. It could even be damaging to offer small gifts to staff who feel underappreciated or not listened to, as it might be seen as a token gesture. This can reinforce the perception that an employer does not really care.”

Another fatal flaw is ignoring tax implications. Hewitt Associates’ How says: “For plans such as this, the value needs to be relatively small to avoid running into tax issues. Things that people value but are not excessive. Wine, chocolates, leisure tickets and dinners out generally work well.”

Case study: Little things mean a lot at Bravissimo

Lingerie retailer Bravissimo supports its staff with a host of small gifts, including shopping vouchers, cupcakes and jars of sweets.

Laura Meneaud, HR director, says: “We like the little-and-often approach, rather than big, grand gestures. We feel it is important to value and appreciate our employees throughout the year. Recognition is timely and, where possible, tailored to the team or department. We also ask for feedback from our employees about the gifts.”

The company, which has 680 staff, also gives mini eggs at Easter and chocolate snowmen at Christmas. All workers receive birthday gifts chosen by colleagues. Then there are one-off gifts such as champagne or cinema tickets with popcorn after a busy period.

“We generally look to recognise teams rather than individuals and are conscious it is the sum of the individuals that makes the difference,” says Meneaud. “We think about the gifts and don’t just spend money on them for the sake of it.”

Case study: Madgex says a big thank-you

Recruitment software company Madgex shows its gratitude to employees with cakes and bottles of bubbly.
At the firm, which has 54 staff, managers send out regular thank-you emails, copying in the whole company, so people can see who has worked particularly hard on a difficult project.

Hanna Smith, HR director, says: “Saying thank-you little and often goes a long way. [Employers] can all too often overlook someone’s hard work and commitment to the company. At Madgex, we truly do value and recognise that our employees go out of their way to do their job.”

As well as small gifts, employees get a pension scheme, bonuses linked to company performance, a cycle-to-work scheme, childcare vouchers and 25-30 days’ holiday a year.

Case study: Metaswitch turns on the treats

Communications technology firm Metaswitch rewards employees who go the extra mile with treats such as vouchers for meals for two.

The company, which has 540 staff, gives newlyweds wine glasses and new parents bouquets of flowers. There are also bottles of champagne at long-service milestones. All new joiners receive a bag of Metaswitch goodies, comprising a branded sports bag, folder and pen.

Justine McLennan, personnel and recruitment manager, says: “We have learned that gestures of this sort can have a very positive effect on an individual or team. When combined with a hands-on, collaborative management style and our suite of more expensive benefits, it creates an effective mechanism to make employees feel appreciated and rewarded.”

McLennan says it is crucial to make sure gifts are dealt out fairly. “Provide clear guidance to managers so that the policy is applied equitably, and with sound and consistent judgement,” she adds.


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