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With just a few months until Christmas, you may be wondering how best to reward and incentivise your team this festive season. To help, we caught up with Behavioural Psychologist, Paul Russell, who specialises in influence, persuasion and behavioural prediction. Paul is founder of Luxury Academy, training partners to some of the world’s most recognisable brands.
Saying thank you matters
As leaders and bosses, we regularly thank our team members for their work during meetings and in emails, so does a specific thank you during Christmas mean that much? Apparently so, says Paul. “A thank you or show of appreciation goes a long way at any time of the year. At Christmas, however, it has become almost a societal norm to give some kind of gift or reward to your staff. It shows that their work has been recognised and appreciated.”
Making rewards meaningful and useful
In the UK, 66% of adults in Great Britain said their cost of living increased in August 2023 vs. the previous month. When choosing rewards and incentives for staff, selecting a reward that can be used to support households to get the things they want and need could make it a more meaningful and useful gift. Paul adds: “The rewards that don’t work as well are things like cakes, bottles of wine or champagne because they are seen as generic and lacking in thought.”
Rewards that work
So if cake and champagne is off the rewards menu, what makes a better gift for a festive thank you? The key word is choice, according to Paul: “Gift cards allow staff to buy their own gift, giving them a freedom that another gift wouldn’t necessarily provide.”
Experiences matter
It seems that all those hours spent at time during the pandemic had a lasting impact on how we want to spend our time and money now, with a Barclaycard survey finding that over half of consumers would rather spend money on entertainment and events than material items. Paul explains: “Post pandemic and most staff would rather have a gift card that enabled them to go for afternoon tea or lunch with a friend than, say, a bottle of champagne to the same value. Experiences are also more likely to be more memorable for your team, so it’s a reward that they’ll remember.”
Consider staff expectations
When making Christmas reward and incentive decisions, it’s useful to consider what has been done in the past as this can influence staff expectations, says Paul: “Anything that has become the norm will be anticipated by staff, so if you provided a reward last year and do nothing this year with no explanation, staff can feel disappointed. Maintaining motivation often means going bigger and better.”
To party or not to party
An annual Christmas ‘social’ can be another expectation around the festive season, and if you’re planning a festive get together there are a few things to consider, says Paul. “Make sure it’s a fun event but also make sure people realise it’s a work event that requires a certain standard of behaviour. Post pandemic, and staff may not be quite as au-fait with what acceptable Christmas party behaviour is, so it’s often worthwhile setting out what the ground rules are. In Asia, Christmas social events tend to be a lunch rather than a dinner and disco, and this can be a good alternative to the traditional party.”
Think about values
If you’re deliberating about the right reward or incentive for staff at Christmas, it’s often helpful to look at the company’s values; what does your company stand for and does your reward or incentive align with those values? For example, if sustainability or care for the community is a core focus, can you encourage staff to make more eco-friendly shopping choices, or try and benefit local businesses with their reward? Paul adds: “Putting genuine thought into the message that their Christmas reward or incentive gives to their staff and other stakeholders is time well spent, reinforcing the brand values and developing a beneficial reward that can pay dividends long term.”
Avoiding cash
A cash bonus can seem like an ideal Christmas reward but that’s not always the case. Academics from Brigham Young University in the USA looking at mental accounting found that people will treat rewards or incentives given as cash vs. gift cards differently, even though the funds are economically identical. Paul agrees, saying: “As cash bonuses have to go through salary, the deductions often leave a bitter taste in many people’s mouths.”
Diversity
A common mistake when choosing a Christmas reward or incentive is to forget about the most important thing, who it’s for, says Paul: “Companies actually waste an awful lot of money on gifts at Christmas because they don’t consider the ages of their staff and their interests. An example might be giving out a hamper of luxury goods to staff when you have many younger people on the team who won’t appreciate the items inside the hamper. Choose a reward or incentive that works for everyone.”
