Unconventional employee rewards more cheerful than check

Liz Hayes
| Saturday, Dec. 14, 2013, 1:46 a.m.

The $500 holiday shopping spree offered to Dynamic Ceramics employees is an example of the creative ways employers are finding to reward their workers.

Rujirutana Mandhachitara, an associate professor of business at Penn State New Kensington in Upper Burrell, said offering a Christmas bonus isn't a new concept, but how the bonuses are offered is changing.

Combining a bonus with shopping is a new way to motivate staff, said Mandhachitara, who specializes in studying marketing.

And adding a financial or time limit to the offer ups the challenge and interest.

“People like to shop anyway,” Mandhachitara said. “Put pressure on consumers, and people tend to see that as an adventure.”

She used the proliferation of Black Friday and even Thanksgiving Day shopping deals as an example of the positive response people have to time-sensitive deals.

It plays into the shift in consumers' priorities since the recession: rather than bragging about buying name brand merchandise at a premium price, she said shoppers are more likely to boast about the bargains they snagged or the coupons they used.

“Now they're competing over who got the best deal,” Mandhachitara said.

James Craft, a professor of business administration at the University of Pittsburgh's Katz Graduate School of Business, said offering the bonus in the form of a shopping spree rather than just giving the money tends to make it seem more special to employees.

“Traditionally, companies use a financial reward thanking employees for their work and wishing them the best for the season,” he said. “That's nice, but that money is often seen as the same as the money you get in your paycheck.”

Even if employees are getting the same amount as they would in a traditional bonus, the shopping-related incentives tend to go over well, said Craft.

“I think it's a way that employers are using to drum up motivation,” he said. “It's very different, it's exciting, it's unique. It's not another paycheck.”

Craft, whose research focus is in organizational behavior and human resources, said he's primarily heard of two types of bonuses related to shopping: either employees are turned loose in a store and given a few minutes to grab whatever they can, or they're given a specific amount to use at a store or group of stores.

He said he's read that the shopping spree bonus may be more appealing to younger employees who are entering the workforce.

Dave Baker, CEO of the Pittsburgh-based human resources consulting firm Human Capital Advisors, said about half of the companies he works with offer some type of holiday bonus.

While a set amount of money is the most common reward, he knows of a few companies that have taken a different approach.

Some offer gift cards, often to retailers such as Wal-Mart or Amazon.com that offer a wide array of products.

Baker said one client gives employees money for themselves, then provides an additional sum that each worker is supposed to give to someone else.

“Some companies are saying, ‘we really want to spread holiday cheer,' ” Baker said.

Baker and Mandhachitara noted some other changes in the way bonuses are offered.

Whereas bonuses once were used primarily as incentives and handed out only to top performers, Mandhachitara said the rewards now are more equalized and offered to all employees.

Baker said bonuses were often calculated as a percentage of salary. Now, he says, they're more often a flat amount.

As the economy has rebounded, he's seeing more bonuses being offered.

“Most of our companies are small companies, and most of the owners are being very generous knowing that there are other people who are not as fortunate as they are,” he said.

“Because the economy has come back, we have noticed quite a few have taken that step,” Baker added. He said companies have the attitude of, “We want to reward our employees for sticking with us.”

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