category icon AWARDS & TROPHIES
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In addition to their traditional use around holiday seasons, gifts have many other applications in business.
Employee recognition. Many companies do not use awards with certain categories of employees for fear of igniting harmful competition among employees or because they are unable to single out an individual's incremental performance in a clearly measurable way. Instead, companies often give managers a discretionary budget that may be spent on awards to recognize employees for exceptional behavior. Actions worthy of special recognition include taking unusual action to please a customer, putting in long hours to complete a project on time, making a cost-saving or productivity-enhancing suggestion, or completing a big sale.

Some executives would argue that such actions are expected as part of an employee's job and should be rewarded at performance-review time. Yet, the evidence suggests that carefully timed and appropriate corporate awards not only make people feel appreciated for their performance but increase the chances that they will feel good about going the extra mile in the future.

When giving awards for special performance, make sure that the gift is appropriate to the employee receiving it and that the presentation is made in a personal and, if possible, public forum. The recipient and his or her colleagues must know why the award is being presented. Publicity in the company newsletter or even an announcement in the lunchroom ensures that people know the types of behaviors the organization wants to promote. Gifts also are awarded to employees for years of service.

Customers. With today's increased emphasis on corporate ethics, you must scrutinize not only the gift and the recipients but the nature of the presentation. After you've determined those clients who can accept gifts, think carefully about the gift and how it's going to be given. If you ship gifts to recipients, you miss an invaluable opportunity to reinforce the relationship between your sales force and your customers. Gifts have the most impact when presented personally by the people in contact with your customers. Imagine the surprise when your customer gets a gift from their customer service representative!

> Consumers. Merchandise or noncash awards given to consumers usually fall under the category of premiums or awards associated with sweepstakes and games. The idea is to spur behavior by making an offer. In contrast, gifts reward consumers after the fact, and the aim is to surprise the customer and build long-term loyalty. Thus the key to using consumer gifts is to have a specific strategy and to target customers whose volume you can track over time. Example: A supermarket chain wants to increase usage of its preferred-customer card so it can track its customers' purchase patterns more precisely. It has offered incentives to get people to sign up and use the card, but usage has begun to trail off. As part of its effort to keep up interest in the card, the supermarket sends out a surprise gift with a thank-you letter from the president to all shoppers who have used the card to purchase more than $500 in groceries in a month.

Vendors. During the heyday of the total-quality craze in the 1980s, companies recognized the importance of building close relationships with suppliers. The trend continues today, as manufacturers and retailers alike depend upon just-in-time deliveries and companies of all types demand the best service for the lowest price. Despite these concerns, surveys generally show that vendors are among the least likely in business to receive gifts. If your company depends on excellent service from a few vendors, you may be surprised by the long-term impact of sending a few awards not only to your customer service representative but, if possible, to the people who do the work.

The media. Most daily newspapers and many consumer magazines have strict policies about giving gifts to editors and reporters, but they are often overlooked if the gift is simple, tasteful, and appropriately timed so that it doesn't look like a bribe. A small, imaginative gift sent with a press release will increase the chances of your message being read, and that could translate into greater coverage. Sometimes, the best time to offer a small gift is with a letter of thanks after a good story or on a special occasion for a journalist, such as a major career milestone. Be wary of sending gifts to consumer journalists whom you or your public relations people do not know personally. The gift could backfire by creating the wrong impression.

Government officials. Many businesses depend upon good working relations with government, regulatory bodies, or town officials. When regulatory officials or politicians are involved, proceed with great care. However, when it's a question of municipal workers who perform services such as trash pickup for your business, a special gift at holiday time often earns a year's worth of more attentive service.
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