Hit 10 times or miss 1 – which rewards stay with people?

Have you ever given a bad gift or reward to someone? You can see in their eyes that there was a miss on your side. And no amount of fake smiles could ever cover that miss. But do people actually care? What if they just forget an inadequate reward and move on?

According to psychologists, they don’t. In fact, a miss stays with them longer and impacts their behaviour in the future. The good news is that you can prevent bad gifting and rewards by simply letting them choose on their own. How to do that? Let’s find out!

Negative experiences stay with us longer

So, why do negative experiences stay with us? Does actually hitting 10 times with a perfect reward mean less than one critical miss?

Negative experience creates a negative impression, which leads to avoidance. This kind of behaviour was coined by psychologists Amos Tversky and Daniel Kahneman as loss aversion:

Loss aversion refers to the relative strength of two motives: we are driven more strongly to avoid losses than to achieve gains^[1].

That means that people tend to remember the bad and learn how to avoid it. And no matter the gains they can receive in the future, the negative impressions are deeply rooted in our memory. This creates a bias that impacts the entire behaviour and sometimes may impact not only an individual but also a collective, like a company, for instance^[2].

Irrelevant rewards lead to disappointment

In terms of employee rewards, that means that insufficient rewards lead to disappointment, which in turn leads to that said cognitive bias. Wrong rewards that didn’t fit a person’s needs tell them, ‘you are not valued here,’ ‘no one actually listens to your wants.’ This is a highly unrecommended path for you, our fellow gifters. Do you ask your employees what they want to receive as a reward?

The more bad rewards or gifts you give, the less satisfaction your employees get with each one. Until you eventually end up with the classic eye roll whenever you bring up the rewards programme. And what happens when people don’t get additional motivation? People stop performing altogether^[3].

Our clients often share stories from past experiences where companies gave out standard gift hampers or branded merchandise, like company hoodies or mugs, only to find them left in office cupboards or passed on to relatives. This is a clear example of loss aversion – employees felt that the company had spent its budget ‘just for show’, without taking their actual needs into account.

Another common complaint from large companies is the choice of a gift card from a single specific brand (for example, a large supermarket chain or beauty retailer). If a company has regional offices or remote workers in small towns where there are no physical shops of that brand, it only leads to disappointment and a sense of feeling left out compared to colleagues at head office.

Trying to manually guess the needs of thousands of employees involves collecting clothing sizes and accounting for food allergies and hobbies. This turns the HR department’s work into a logistical nightmare. Any mistake in this process, like getting the size or colour of a hoodie wrong, automatically creates the same negative cognitive bias. Financial losses and zero ROI for the business – incorrect remuneration is literally money down the drain.

What to do to avoid that?

People’s opinions and life circumstances change daily. They might not even know what they need right now, if you ask them. And your company’s merch or massage option definitely doesn’t have the same effect on every single employee.

If everything else has failed and asking their wants isn’t an option, you can always go with the second most obvious answer. Just give them a choice. You can reward them with a flexible option that allows them to choose for themselves.

The giftmall multibrand card is one of those options that gives access to all their favourite brands through a single catalogue. You give the card with the denomination you see fit, and your employees select the brands and spend the amount whichever they please – later on or straight away, in parts or all at once. They can also choose to collect several denominations and spend them together.

The benefits include:

• Instant digital delivery: For companies with hundreds or thousands of employees, a digital multibrand card completely eliminates the need for warehouses, couriers and the risk of delays. The cards are delivered by email or via text message/messaging apps within just one working day of payment.
• Flexible denomination: The giftmall multibrand card is valid for 60/24 months. Employees don’t need to rush into a decision – they can save their bonus until Black Friday, the festive season or their child’s birthday.
• Budget control: An employee can split the value of a single card across several brands (for example, spending part on clothes, part on books and part on dinner) or, conversely, save up several rewards from the company for a single large desired purchase.

Negative cognitive bias or failed rewards leads to poor performance. But to avoid that, you can give your employees a choice. If you are interested in motivating them most efficiently, please reach out to us at info@giftmall.eu.