· 8 min read · Features

Show them you love them this Christmas

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There is doubt about the effect on morale and loyalty of rewarding employees with gifts at the festive season. Robert Gray looks at which ones work and suggests 10 of the best.

They may not be as traditional at Yuletide as turkey, crackers and mistletoe, but Christmas incentives have long been the way of rewarding employees for their hard work during the year. The common-sense view is that well-chosen and carefully-delivered rewards should have a positive impact on employee morale and even loyalty.

Yet, while lots of money is spent on such incentives, evidence of their impact in stimulating motivation or performance is thin on the ground. A report by recruitment specialist Hudson, conducted among employers in New Zealand, recently found most employers do not actively measure the effectiveness of the time and money spent on their staff at this time of year and the picture is almost certainly the same in the UK. Christmas incentives, it seems, are frequently implemented because employees expect to be treated. They aren't hardwired thoughtfully into staff retention strategies.

"I think that a lot of the traditional holiday incentives are disappearing," says Enterprise Rent-a-Car European HR director Donna Miller. "Certainly the days of receiving corporate branded materials seem to be a thing of the past. Perhaps they may remain longer in the marketing world, but unless there is something quite engaging at the heart of it, it won't work for the majority of employees." House of Fraser's business incentives manager, Catherine Forrest, agrees: "Our sales figures show that Christmas incentives are not becoming a thing of the past - far from it. But it's probably fair to say that providers of incentives always need to be looking for something new and different to offer while encompassing the latest technology where relevant."

Last year was Enterprise's 50th anniversary and all employees received a Tiffany key ring as well as a model 1957 Chevrolet car (from the year the company was founded). In previous years, staff have received a selection of gifts from Victorinox, Callaway Golf, and Swiss Army, for example.

Miller says she has found that gifts to enhance leisure time (travelling cases, laptop rucksack, tote bags, watches, and so on) have been far more popular because Enterprise sees its employee population shifting from Generation X to the younger Generation Y. In addition, the company always has a holiday party for all employees and their spouses or partners. This has traditionally taken place in January as it is seen as a great way to kick off the New Year.

Some firms go to considerable lengths to ensure that their Christmas incentives are truly motivational. Last year taxi business Computer Cab awarded five drivers who hit specific targets £1,000 each in what is the company's busiest period. Some drivers covering specific corporate accounts picked up Fortnum and Mason hampers and PlayStation 3 consoles, while others were also offered reduced mobile phone calls via the O2 open scheme and a free Marks & Spencer Christmas pudding. For the hampers, drivers were entered into a draw each time they completed a job - the more jobs they had, the greater their chance of winning.

Food and drink treats have long been popular as rewards at Christmas but care does need to be taken. Over the past few years there have been reports of inappropriate and sometimes even offensive corporate gifts being presented to staff and clients. Alcohol to a teetotaller, cream cakes to a person with high cholesterol and a turkey to a vegetarian are just some examples. Even when the intention is well meant, it is important that noses are not put out of joint.

Raymond Robertson, director of consulting firm Strategic Reward and author of The Together Company, which examines the role of reward and recognition strategies in business performance, says that companies are often surprised by what their staff really want. When McDonald's carried out research among its 16-21 year-old staff, it found the most desired reward among this group was driving lessons.

"If companies can match the incentive to their culture, that really helps," says Robertson. "But of course it's hard to pick something that everybody likes. Choice is definitely a very good thing and I don't think that is going to stop."

In this, Robertson is alluding to vouchers, which have grown in popularity in recent years. The voucher market was worth £3.2 billion in 2007 and trade body the Voucher Association (VA) estimates around 45% of the market - roughly £1.5 billion - comes from corporate buyers. Around 60% of this business occurs in the last quarter, reflecting the importance of Christmas. "Although gift cards are proving to be more popular on the high street, corporate customers are still mainly sticking with conventional vouchers," says the VA director general, Andrew Johnson. "We've also noticed a bit of a move away from luxury goods to vouchers that can be used for items that are maybe a bit more everyday.

"The flexibility of vouchers saves employers from worrying about significant logistical exercises such as transporting 240 turkeys," he adds. "Also, it means you don't have to pigeon-hole people in a way they might not like."

For those seeking vouchers that are a little bit different, online spa treatment resource SpaFinder has recently joined the VA, while restaurant chain Pizza Express has launched a gift card redeemable at 300 UK restaurants.

But Sainsbury's Business Direct manager, Yvonne West, warns that giving someone the same gift year after year can become detrimental to the initial goal - of thanking that person for their hard work. "It pays to refresh the incentive each year to create a sense of excitement and anticipation," she says. "Surely this is more conducive to producing a motivated and loyal workforce. That's why we've introduced gift cards as well as paper vouchers, hampers and wine gifts so that an employer has the choice and can mix their incentives each year." In a similar vein, House of Fraser this year launched an exclusive 'Jimmy Farm' Christmas hamper - using the popular BBC2 series.

But P&MM head of the motivation John Sylvester says it is also vital for employers to distinguish between giving employees rewards as recognition for their year's work and something as a motivational tool. If it is the latter, he argues, incentivising them to work harder has to be made clear from the start.

Peter Reilly, director, HR research and consultancy at the Institute for Employment Studies, feels Christmas incentives quickly come to be seen by employees as their right, irrespective of performance, and can become a millstone round managers' necks. "If you are serious about using business incentives, Christmas is not the best time to do it," he cautions. "It doesn't take very long for it to become institutionalised and people expect it."

Some employers are still inventive during the Christmas season though. For example, PR agency Clarke Mulder Purdie (CMP) has held 'extreme dining' events at London restaurants Archipelago - where dishes include chocolate covered scorpions - and Dans le Noir, where the food is eaten in total darkness. CMP found its staff relished the unusual experiences.

But even a run-of-the-mill Christmas party can be a potential minefield. Reilly recalls running a focus group for an employer in Leeds, which degenerated into petty squabbling over the food they had been served and about whose drinks were paid for. So much for the Christmas spirit.

INVENTIVE INCENTIVES

1. Happy Box - Happy Box London

Happy Boxes start at £30 and can be delivered the next day nationwide. Gifts are sourced from luxury brands including Coco Ribbon, Daylesford Organic, and Penhaligon's of London. "I felt Happy Box understood our requirements along with being very adaptable to a brief," says Barclays Commercial Bank national sales team recognition and incentives manager Kelly Brown.

www.happyboxlondon.com

2. Photo Books - CeWe Color

Photo books are one of the fastest growing areas in the photo market today and, with CeWe's system, HR teams can personalise books by adding their own text and background. Prices per book range from £5.99 to £70, depending on size and style such as, linen, hardback and soft cover. "They offer businesses the chance to make their Christmas and office party photos into professional quality books that promote morale in the company," says CeWe internet sales manager Andrew White. "They are a perfect way to reward staff."

www.cewe-photoworld.co.uk

3. Pure Indulgence Days - House of Fraser Business Incentives

This is a luxury personal shopping and pampering experience gift at House of Fraser's flagship London's Oxford Street store. Each Pure Indulgence Day includes a champagne reception, style and fashion advice, an appointment with a beauty and skin care expert, lunch at Cafe Zest, followed by the employee's chosen experience. Three levels exist: classic (£300); premier (£600); and ultimate (£1,000). Vouchers are for both men and women.

Email: incentives@hof.co.uk

4. Experience Days - Virgin

Vouchers begin at £49 for activities as diverse as tank driving, paintballing, flying lessons, making music in a recording studio, bungee jumping and racing high-performance cars. Experience packs can be branded in the corporate style of the buyer's choice so the end user has a direct relationship with the supplier. Electrical contractors body NICEIC used Virgin Experience Days for a day at Silverstone Circuit. Richard Pagett, NICEIC group PR manager, says the activities were "a great team-building event and something we'll all be talking about for years to come". www.virgin.com/experiencedays

5. Flowers - Teleflorist

The Teleflorist scheme offers up to 15% discounts on general floral gifts. It is supported by a dedicated corporate account team, centralised invoicing for gifts, staff discount codes, and reporting. It is free to set up a corporate account and clients include Nestle, Manpower, P&MM, Norwich Union and Aon. "The arrangement was easy to set up and because the staff order directly there isn't any admin for us," says Manpower procurement manager Androulla Sofroniou. www.teleflorist.co.uk/corporate

6. Create your own perfume/aftershave - Fragrance for You

Recently launched fragrance design gift certificates allow the holder to create their own personal perfume. Redemption values are available for the following sizes: 30ml, 65ml and 125ml. Each certificate is uniquely numbered so it tracks back to the company giving the certificate. There is no expiry date so there is no wastage in lost value in unredeemed certificates. Certificates can be printed with company logo and designed in quantities as low as 250. Product prices start at £30.00 per unit but significant volume discounts are available. A bank and an airline are the first two corporate customers.

www.fragranceforyou.com/corporate/products.html

7. Gift vouchers - Kingfisher

These vouchers can be spent on more than 400,000 different products, in 1,500 B&Q, Comet and Woolworths stores nationwide. Support services include developing clients' incentive and reward programmes; database management; design and production of supporting literature; and handling and fulfilment. Costs are face value of vouchers minus bulk discounts - 2% on £1,000 or more, and 5% on £10,000 or more. Lorna Rainer, Young's Seafood HR adviser, says: "We wanted to offer a range of retail brand experiences that would hold the greatest appeal to a diverse audience - we have a cross-section of staff, from over 3,000 in production through to senior management."

www.kgv.com

8. Silver and leather gifts and accessories - The Corporate Gifts Company

Products include the Trio Wine Stopper Set - three wine bottle stoppers on a stylish and striking curved design base with prices from £11.20. Photo frames, travel wallets, torch key rings, pens and clocks are also available. Clients include MBNA, PC World Business, Kraft Europe and Arup. "With our ability to do mass customisation, we can engrave a logo and an individual's name on each gift to give that personal touch. It's an old cliche, but it really is the thought that counts," says Corporate Gifts Company director Kevin Ross.

www.corporate-gifts-co.com

9. Harrods Gift Card - Harrods Corporate Service

Harrods says it is very popular for companies to use a gift card tailored to a specific department or product rather than just a monetary value. Wealth management company the Alexander Associates Group, for example, found that the Gift Card was an excellent tool for its annual motivation scheme. The three top performers in its insurance team were offered a £1,000 Harrods card for use in the British Men's Tailoring Room or at its personal shopping suite, By Appointment. Harrods also offers the chance to redeem gift cards in Trailfinders. www.harrodscorporateservice.com

10. ENVY - Maritz

There are nine ENVY experience vouchers available at different price points. Experiences available include health club day pass, Airkix indoor skydiving, Thames lunch cruise, quad bike thrill, Ferrari thrill, Champagne hotel break, Lamborghini experience, single-seater experience at Brands Hatch and Let's Do Paris - In Style! Vouchers range from £25 to over £1,000. "The benefit of giving an experience voucher in December is that the recipient can enjoy it when it's convenient for them - after the Christmas and New Year rush has died down - and when your gift is more likely to be appreciated and memorable," says Maritz incentive specialist Julian Bazley.

www.maritz.co.uk.