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Rewarding employees has become an element of motivation in the company. This has always been the case and will continue to be so. It is known that motivated employees are more efficient and are more likely to be involved in their duties. To increase their satisfaction and encourage them to act, it is worth giving them, for example, employee vouchers or gift cards. When thinking about choosing the perfect gift, remember not only about its value, but also about savings for the company budget.
Gift cards and vouchers, also known as employee vouchers, have become a way to celebrate many events in the company, including various types of holidays and jubilees. They are also often presented as incentive prizes for achieved results at work, the aim of which is to encourage subordinates to continue their activities. Employers like to reach for them, especially at the end of the year. As confirmed by the study "Santa at work. Gifts for employees, 2019” Edenred / HBRP, as many as 70% of them choose Christmas for this occasion.
The survey also shows that over 48% of respondents declared that they were not satisfied with what they received. What are the employees complaining about? Over 16% of them indicate that the company gift was too modest and missed, which can directly translate into a bad atmosphere in the company. An improperly chosen form of gift, e.g. shopping vouchers, which force employees to purchase their dream gift in a limited number of places or commercial facilities, causes regret in the team, not joy. Thus, it reduces the motivation of subordinates for a long time. So how do you choose a perfect gift for your employees?
Prepaid cards are a modern tool for employee motivation, which is why they are increasingly displacing standard gift vouchers for shopping in selected stores. They have the form of a Mastercard payment card, which nowadays is used practically by all of us. Recently, the trend of digital payments among Poles has been developing dynamically. According to the Mastercard study “Cashless payments through Poles’ eyes”, 2019 Pollster, only in 2019 over 79% of them chose card payments instead of cash. Considering the current epidemiological situation and WHO forecasts, which show that the threat to society can persist for up to 2 years – the only valid recommendation for employers will be to introduce digital motivation methods in their companies. Unlike classic employee vouchers, they are a completely safe solution.
Both cards and gift vouchers have the same purpose – to increase employee motivation. However, verifying their functionality and benefits package for the employer, we come to the conclusion that they differ a lot. Firstly, a form, secondly, a scope of acceptance, and thirdly, logistics and distribution.
Gift Cards meet the needs of the modern world – they are a safe and convenient tool for paying for purchases/exchanges for a dream gift. Employers can fund them with any amount in order to differentiate the value of support from companies and use the Company Social Benefits Fund effectively. Where can I pay with a gift card? They are accepted at all payment terminals around the world – without having to enter the PIN code in contactless transactions up to PLN 100 (Google Pay™ and Apple Pay), as well as in online purchases. In addition, those who get Edenred cards, receive access to MyEdenred savings platform and a package of unique discounts and promotions. Interestingly, even after using up all the funds on the card, the employer can recharge it – for a new occasion. This way, it reduces costs of re-logistics and distribution of cards, as they need to be passed on to the employees only once a year!
Gift vouchers for employees give them less freedom of choice and hinder the free management of allocated funds. Such limited flexibility may adversely affect the level of satisfaction of subordinates. Purchase vouchers are, as a rule, denominated in money – usually PLN 10, 50 or 100. Paying with them for purchases, employees cannot even count to receive their change for the transaction. The time of their use is also shorter – gift vouchers are valid for about 6 months or less, depending on the agreement concluded by the company. On the Edenred Gift Card, you can consume a gift from your employer for up to 2 years. Most importantly, employee vouchers have a "predetermined" and limited network of commercial recipients – in practice, this means that employees can only redeem their rewards at specific points, e.g. in home appliances stores. Therefore, investing in gift vouchers is a labour-intensive task, especially for company employees/HR departments. Every time new orders are needed for a given circumstance in the company, space for storing cardboard boxes with employee vouchers and very time-consuming distribution. Therefore, prepaid gift cards remain an alternative for entrepreneurs.
Taxes are another important issue that differentiates the functionality of employee gift vouchers and gift cards and supports the latter. Based on Art. 21 clause 1 point 67 and Art. 52 of the Act on personal income tax of July 26, 1991 (Polish Journal of Laws of 2018.200, uniform text), the value of the feeding into the gift cards financed from the Company Social Benefits Fund does not increase the basis for calculating the Polish Social Insurance Institution’s (ZUS) contribution. What does this mean in practice for the employer? Cards are exempt from personal income tax (PIT) up to PLN 2,000/employee. In a situation of crisis, optimization of the company budget or aversion to any cuts in the social sphere, this can be an argument for HR departments in favour of choosing cards rather than standard gift vouchers.
So, in summary, cards, or gift vouchers? We suggest to... go online!