Recognition & Rewards

Recognizing the unique Millennial

The top three challenges for HR organizations today are employee engagement, turnover rates, and succession planning. Though these issues are not new, former strategies just don't seem to have the same effect and the shift has left employers - especially those with Millennials in their ranks - scrambling for answers. In the past, reward systems were monetarily based, providing employees with compensation for their time and extra efforts with strictly financial compensation. The ineffectiveness of this method in retaining and motivating employees is indisputable.

• 37% of U.S accommodation and food services employees say that they had or will quit their position in their current place of employment within a 12 month period.
• The majority of employees in 2015 were reported as “not engaged” while another 17.8% were “actively disengaged”
• For the majority of 2015, monthly averages for consistent employee engagement hovered between 31.5% and 32.1%
• One-third of new hires quit their job after about six (6) months.¹
• Nearly four out of five (78 percent) of business leaders rank employee retention as important or urgent.
• In 2015, 40% of companies reported that with the arrival of lower unemployment rates, the difficulty in finding and maintaining talented individuals has heightened their concern for loss of personnel.

So, what has changed?

‍Millennials.

As of 2015, Millennials make up the largest section of the global workforce and will compromise nearly 75% of personnel by 2030.² The average tenure of a millennial employee is only two years and the key to building a strong, profitable business in 2018 rests in the ability of a company to redirect this pattern. Millennials may have a bad rap for being on cell phones and a general sense of entitlement, but here is the truth: Millennials aren't lazy, they have specific needs.

Psychologically, every human being experiences a direct correlation between their perception of self-value and their state of happiness. This is even more pronounced in millennials, where monetary rewards are secondary to the feeling of personal growth, engagement, and significance within a company. With every resource at their fingertips, millennials are constantly looking to jump into a role that will fulfill these elements. The employer then is fighting a perpetual battle against the threat of the “next best thing.” In order to win the fight, you have to understand your employee's criteria.

Fuelling your employees

Retaining valued talent in your business depends on your employee engagement levels. For Millennials, the single highest contributor to this is their belief that they are truly valued for their unique strengths. Recognizing the influential role an employee plays within your company bolsters their confidence and boosts their comfort with expressing ideas amongst coworkers and superiors. If a millennial believes their employer recognizes them as an asset, they respond by fully applying themselves to maintaining high standards, simultaneously satisfying a need for self-growth and importance.

“More than ever, they want to be part of a workplace culture that allows them to discover their own identity and inner confidence so they can unleash their full potential. (Glenn Llopis, Forbes 2014).

”Currently, less than 40% feel so engaged.³

Because Millennials base their performance on output rather than time spent on a project, it is essential that they feel their commitment to quality is noticed. According to a recent survey by TriNet, one in four millennials feel in the dark about their work performance; As it stands, 8/10 Millennials think they deserve to be recognized more for their work. Only 54% of female employees say they are recognized when they do excellent work and only 61% of males.⁴ That's an average of 43% of employees operating under the impression that they are not valued!

‍The answer to these statistics is relatively simple- Workplace culture is everything. Traditional superior-to-employee encouragement, though beneficial in its own way, can often feel contrived, insincere, or infrequent to an employee. Peer-to-Peer Recognition fosters camaraderie, heightens energy levels, and alleviates preoccupying worries about work performance which deduct from creative spirit.

You can completely re-establish your work culture by integrating a peer-to-peer recognition program. By encouraging staff to communicate with one another on their successes, you are cultivating company-wide collaboration. Values-based recognition from a peer is like getting a compliment from a friend on your outfit or touchdown in high school- instantaneously that person is invigorated with new energy to duplicate their success or surpass it. The cycle peer-to-peer recognition promotes quickly takes on a life of its own, as each compliment given encourages the receiver to then offer one of their own to another co-worker.

Did you Know? ‍

86% of values-based recognition programs show an increase in worker happiness.

Peer-to-peer recognition benefits

Peer-to-peer recognition is statistically 35.7% more likely to have a positive impact on financial results than manager-only recognition. In 2015, 41% of employees said that if they were given the tools to comfortably engage in peer-to-peer recognition, they would gladly do so. Once a program had been established, 58% of “happy employees” (individuals who considered themselves fulfilled by and content with their job) reported giving regular peer recognition.⁵ Staff who are empowered to recognize other employees are twice as likely to identify themselves as highly engaged while 90% of employers say their employee recognition program had a positive impact on overall employee engagement.

These interactions then, are not one-off comments, but authentic conversations progressively developing gratifying company habits, transparency, and teamwork. Not to mention the right culture attracts new, talented employees who will vie for the chance to be a part of a positive, collaborative team. Millennials will choose to invest themselves in your business' long term, thriving in the synonymous relationship between their ambitions and your company’s achievements.

What are you waiting for? Mature employee recognition programs are 12 times more likely to have quantifiable, superior business results!!⁶

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Foster a collaborative and engaging workplace culture of your own - book your Qarrot demo today!

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Sources

• ¹ https://www.tlnt.com/9-employee-retention-statistics-that-will-make-you-sit-up-and-pay-attention/
• ² Bureau of Labour Statistics
• ³ Tony Schwartz, Harvard Business Review
• ⁴ Modern Survey
• ⁵ Great Place to Work
• ⁶SHRM/Globoforce Employee Recognition Survey 2012

The amazing growth of gift card rewards

Recalling my days working for a leading customer loyalty program, I remember the remarkable growth of program members exchanging their points for gift cards. This growth was remarkable for different reasons. First, it was a travel program where the majority of members accumulated their points for airline tickets. This travel orientation meant that members were accustomed to saving-up their points for long periods of time. Moreover, before the program introduced gift cards to its catalog, it added merchandise and experiences. This meant that members had a wide range of choices—everything from plasma TVs to show tickets to VIP events. Despite all these options, gift cards quickly grew to become the most popular non-travel reward.

Looking back, I now realize that the popularity of gift cards as a reward option had a lot to do with their flexibility and their faster attainability compared to the more aspirational, less attainable travel rewards.

But, my previous company isn’t alone. The entire incentives industry has seen the same trend in the past decade. In fact, the Incentives Research Foundation states that in 2012 gift cards had become the most popular gift among consumers shopping for friends and relatives and the tool of choice for businesses hoping to motivate employees, customers, and partners.

Gift cards: the preferred employee incentive reward

When it comes to motivating employees, gift cards are now undeniably the preferred non-cash reward option and used by 75% of businesses. Use of gift cards in employee rewards and recognition programs has even exceeded travel, merchandise, and cash rewards according to the October 2011 October 2011 report “State of Gift Card Use in the U.S.” by the Incentive Research Foundation. According to the IRF’s research, consumers have embraced gift cards because they make gift-giving “easy” and “reduce shopping time”. This convenience factor has no doubt also influenced people’s warm reception of gift cards as incentives in the workplace.

Incentive program managers and planners also prefer using gift cards as incentives because they are easier to administer, are more flexible and personal, and are popular amongst company staff. Above all, incentive planners view gift cards as the “most effective” reward option that offers the best overall return on investment, even compared to cash.

Similar to the IRF’s findings, we believe the effectiveness of gift cards over other non-cash and cash rewards is largely due to the unique combination of flexibility and “trophy value”. For example, if you offer your staff a catalog of merchandise, you’ll achieve high trophy value but low flexibility as staff may aspire to have some of the items you offer, but won’t necessarily find something appealing at any given time. In contrast, cash rewards offer high flexibility but low trophy value. The following quote from Mike Ryan, President Emeritus of The Performance Improvement Council, in the IRF report highlights this perfectly:

“A responsible person who receives cash as a reward may not feel comfortable about spending it on themselves, so it is not exciting for them. A $25 gift card is better than $25 cash because it gives them license to spend on themselves and this makes it appealing.”

Gift cards seem to strike that perfect middle ground - by offering a selection of well-known brands, as well as “open” prepaid cards from Visa, MasterCard, or American Express, your employees will find both trophy value and flexibility.

Compared to merchandise and travel, gift cards also dramatically reduce the administrative costs and burden associated with employee incentive programs. Ever shipped a TV across the continental US? It’s not cheap. Not to mention that merchandise programs require frequent catalog refreshes to maintain employee interest and tend to have higher customer servicing requirements (with staff calling to find out when their rewards are going to be delivered).

Digital revolution: the rise of e-gift cards

With the rise of mobile and digital payments, it’s not surprising that gift cards too are increasingly offered electronically. “E-gift cards” are similar to their plastic equivalents in that they can often be used in-store (printed or with a barcode displayed on your phone) or used to pay for purchases online (by either entering a PIN or redemption code). Moreover, Millennials prefer e-gift cards because, unlike physical cards, they can’t be “lost” and don’t need to be remembered before going shopping.

Plus with the growth of online retailers like Amazon as well as the online offerings of bricks-and-mortar retailers like Best Buy and Walmart, the number of possible ‘reward options’ is nearly infinite. Why manage a merchandise catalog with hundreds of items, when these online retailers have tens of thousands? And to offer their catalogs as rewards to your employees all you have to do is provide their e-gift cards as rewards in your employee incentive program.

Beyond the flexibility and choice provided by e-gift cards, I believe they will quickly overtake physical gift cards in the coming years as the most popular employee incentive reward due to their simplicity. Incentive program managers and planners will love them too - from the low cost of fulfillment to the instant gratification they provide (e-gift cards can be emailed or received instantly upon redemption), they help simplify and, at the same time, expand the utility of incentives.

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Qarrot makes motivation easy with our feature-rich platform and catalog of e-gift cards! Book your demo today!