Because there are so few ways for organizations to show employees gratitude and appreciation, most succumb to giving gifts. There are all sorts of employee appreciation gifts available, from throwaway junk, like desk dolls and paper weights, to more valuable and unique items, like crystal awards or expensive wine. Often, the smallest gesture can bring light to a hardworking employee’s face, and cheap gifts seem like a great idea for an organization trying to show they care.
However, gift giving isn’t a risk-free activity. Not only are there some ethical concerns with giving employees gifts, but gifts can also impact a company’s bottom line. Read on to learn the real risks and rewards of gift giving — and to learn how you can walk the line safely and profitably.
Reward: Boosting Their Motivation
There are two forms of motivation: intrinsic and extrinsic. Gift-giving stimulates extrinsic motivation because it encourages employees to work harder to receive rewards from outside sources. In fact, there are many sources of extrinsic motivation in the workplace, from the regular paycheck to verbal recognition to gifts, and in regular life, such as loyalty points with stores and cashback with credit cards. External rewards are exciting, and they are often effective at encouraging productivity.
Risk: Ruining Their Motivation
Unfortunately, extrinsic motivation isn’t effective forever. If extrinsic motivation is used too often, your employees will become accustomed to it, almost expecting it for the bare minimum of work. Much like a paycheck only functions as a minor motivator over time, rewards and gifts given too freely might eat away at your staff’s willingness to put in extra effort, meaning you’ll need to offer even more prizes and incentives than before. It’s best to use gifts only in rare circumstances, when someone truly goes above and beyond — or to give in ways that encourage intrinsic motivation.
Intrinsic motivation comes from within; it is behavior that derives from pursuing a passion, achieving a goal or enjoying some other intangible, internal reward. Studies have shown that people experience greater amounts of satisfaction from intrinsic motivators, and motivation spurred in this way is unlikely to wane over time. It’s important that you understand what drives employees and to feed into that type of motivation because gifts can have a negative effect on some workers in the long run.
Reward: Building a Better Brand
Gift-giving is a sign of beneficence, and in an era when conscientious brands are winning, looking like the good guy is a powerful tool. More often, consumers are voting with their money, supporting organizations with a record of treating employees and customers respectfully. If you can establish your company as one that actively appreciates employee efforts with valuable and meaningful gifts, you can win over approving consumers and establish your brand as responsible and respectable.
Risk: Bribing Employee Behavior
That is, unless your gifts come off more like bribes. Gifts given at the wrong time or to the wrong person can be misconstrued as attempts to curry favor or influence behavior in a shady way. For example, what would you think of an organization that awards a sizeable bonus to an employee who recently lodged a sexual harassment claim? What about a manager who accepts a gift from a subordinate, who soon after receives a promotion?
There is a theory of ethics surrounding corporate gift giving that you should be aware of and adhere to if you want to avoid catastrophic scandals. If you aren’t familiar with any amount of business ethics, it might be worth your time to sign up for an ethics course through a local business school or online through a MOOC.
Reward: Enticing Top Talent
Organizations known to appreciate their workers cultivate an enviable reputation not just amongst consumers but also amongst job seekers. When a company is known as a top-tier employer, they tend to attract top-tier talent, meaning their staff is filled with the most skilled, most connected and most productive workers out there. This gives a company a major competitive edge in the market and all but guarantees significant and valuable growth.
Risk: Over-spending on Gifts
Yet, in the attempt to attract valuable human capital, it is possible to invest too many resources. Gift-giving isn’t free in any sense; it requires careful thought and, perhaps more importantly, money. If you are spending much of your day planning your next employee gift — and if you are dropping hundreds of dollars per month on your gifts — you are being wantonly wasteful. Your organization can likely use those resources in other ways to greater benefit, especially if your company is small or new.
Gift-giving is great — until it’s not. While you should by all means reward your employees for their hard work, you should also be aware of what your gifts are, how you are giving them and when you are doing a bit too much. Then, not only will you be giving the right way, but your workers feel encouraged to give their all, too.