Iain Thomson, Director of Incentive & Recognition at Sodexo Benefits & Rewards Services UK, reveals the secrets of a successful Christmas rewards scheme.
What’s the point of Christmas rewards?
For companies, they serve a two-fold purpose. Firstly, it’s the close of the calendar year – or in some cases the financial year – and an opportunity to reward staff for their work over the past 12 months. Secondly, rewards can set up the engagement levels for the year ahead. From an employee’s perspective, Christmas can be a stressful period, both financially and in terms of their time. So, being able to relieve some of that stress is what makes them so popular. Two thirds of major UK firms reward staff at the year-end, while Christmas events are very popular in Latin America, with over 90% of companies in Chile giving rewards.
When should companies start planning them?
As early as possible – from January 1st onward – as they should be part of their employee engagement strategy, which means they need to tie into behavioral incentives that reflect the company’s values, vision and mission. They should not be a separate initiative, but part of what the employer wants to achieve over the year. In the manufacturing industry, rewards would typically tie into targets for efficiency, volumes and productivity, while in customer service they would reflect the speed of answering queries or going the extra mile to deal with a complaint.
So, communications have a key role to play?
Absolutely. Employees need to understand why they are being rewarded, so transparency about individual and company performance over the year is important. Many businesses do not get the value of their spending at Christmas because there is no association with what an employee has actually done. You then run the risk of a reward being expected, regardless of whether the business has done well or whether the employee has met their objectives. If a company is struggling, Christmas rewards can be a way of re-engaging the workforce – but the messaging needs to be clear. If you tell people that ‘times are tough, but next year we can come through this,’ the reward can be a motivational tool for continued loyalty.
What are the best Christmas rewards?
Store vouchers are very popular, whether it’s the UK, France or the United States. And a selection of different vouchers lets you offer something for everyone, while a luxury brand adds an extra touch – and the feeling that Christmas is special. But it’s really about the demographics of the workforce. For front-line employees, a case of wine or a food hamper is very well received and can ease the financial burden. Even small gifts, like boxes of chocolates, go down well. For executives, who typically spend more time away from their families, an experiential reward can be very effective; and the more family time you can integrate in the reward, the better. For them, a family trip, or a cinema and restaurant night can be good. As for higher-level gifts, cases of more expensive wines, champagne and branded watches are popular. Another option is to tie the reward into the year ahead, with a pair of designer sunglasses, for example. In general, the main focus should be on what an employee would like to receive, rather than what a company wants to offer. Don’t give 100 pounds, dollars or euros worth of wine – when employees would rather have a shopping voucher for 25.
What about timing?
For shopping vouchers, giving them out a week or two before Christmas isn’t ideal. By then, many people will already have the items they could have bought with the vouchers. By contrast, if you give them out at the end of November, employees can plan their shopping around the vouchers. With an experiential reward, closer to Christmas would be better. For the employer, the key is to anticipate when people will be able to make maximum use of their reward.
And what about the alternatives?
Many employees are short of time at Christmas, which adds to their stress levels. They are under pressure to do shopping, to visit family or attend Christmas events at their children’s schools. For them, a reward could take the form of flexible working, a half-day off or a Holiday Shopping Day that wouldn’t come out of their holiday entitlement. People without children could have a day off to work for a charity, for example. It depends on the company culture.
How can Sodexo Benefits & Rewards Services help?
We have a wealth of experience in reward fulfilment. We can provide the rewards and, equally importantly, the analysis and messaging behind them. But a rewards scheme is not just about fulfilment. It involves asking why a company wants one, what are they looking to reward and what do they want the employees to feel when they receive the rewards? Those questions allow us to then create additional value for clients by tailoring both the reward and the messaging.
If you are starting a Christmas rewards scheme, don’t set the bar too high in terms of the gifts. If everyone gets an iPod at the end of the first year, and they don’t get one the following year, they will be disappointed. The important thing is to manage people’s expectations. Be creative, and think about how a reward can be delivered – ideally hand-delivered by a manager, perhaps even dressed up as Father Christmas. Make it fun, and make the messaging clear. And remember that there are experts available who can help you get it right.
 SMEs’ challenges and quality of life at work. Global study 2015. Sodexo.