Boosting Retention Through Gift-Giving
Gift giving is a globally recognized form of social capital and contribute to social norms. A well meaningful gift is significantly more power than cash or a check. This is why you bring a bottle of wine to dinner at a friend’s place instead of offering to reimburse them for the steak they grilled. Cash, in any form - whether it’s a paycheck, a gift, or a work bonus, is transactional in nature and does very little to improve relationships between most people. Effectively leveraged, following the three-step framework below to implement social norms in your workplace will help your company boost employee loyalty and reduce your turnover.
Most companies rely on market norms to boost loyalty, and while these practices encourage initial attraction to a company, they do very little to keep your employees from moving elsewhere. Market norms must dictate many aspects of employment - you need a paycheck to pay for rent, food, car insurance, and other essentials. Even your traditional work perks, like medical benefits and retirement plans, have become part of market norms. Newer perks have quickly become transactional - we assign dollar values to transit reimbursement, gym memberships, and workplace lunches. These perks are all brilliant methods of attracting talent, and because of this, most companies focus on transactional ideas that focus on market norms.
Retaining talent, which is a more difficult task for companies, is predicated on effective implementation of social norms. Social norms happen when you conclusively create unity of vision, engage directly and frequently with your people, and initiate practices that reinforce the relationships you have with your employees.
The specifics of effectively implementing social norms into business practices look different for different companies, but generally, there are three steps.
First, and this is my starting point for every consulting conversation, is creating a clear mission, vision, and values. These statements ground you in unity across departments and help communicate the common objective the entire company is working toward. Create a structure in which creativity can thrive. As long as creativity aligns with the mission, vision, and values, its worthy of a conversation.
Step two is identifying where those conversations start? When you create (or revitalize) mission, vision, and values, you open the door to restructuring your internal feedback loop. Managers should be meeting with every direct report every week. Contrary to common belief, a good manager can manage more than five to seven direct reports. The reason common management practices dictate that threshold is so a manager can meet with each of them on a weekly basis. Consistent feedback fosters trust, helps identify errors early, and opens up a conversation for ideas that would otherwise be left unexplored.
Engagement during these weekly sessions goes beyond tracking progress on professional projects. Learn the intimacies of their lives - how their significant other is doing, if they appreciate outdoor activities, if they enjoy going to Broadway shows and what their favorite show is. Ask about and actively promote their dreams, identify creative ways to help them make progress, request feedback. How you are doing as a manager, and how the company is doing overall? What could the company do better? Have conversations about ideas, and if they’re worth bringing up to a decision-making level, bring the person who had the original idea along to the discussion.
The third step only works when your managers successfully and consistently get to know their employees. Most companies, particularly with large sales departments, have a bonus structure in place, and most companies offer cash incentives when a person meets requirements. This approach follows simple, transactional market incentives, which as mentioned above attracts people, but doesn’t keep people. Only by introducing social norms will you see a significant increase in loyalty.
By occasionally (every few months) offering personalized gifts (managers can give tickets to a Broadway to one person, or a basketball game to another) in place of cash incentives, you demonstrate that you’ve listened to the things they like to do. They may not realize they want this type of treatment, but a thoughtful gift impresses someone more than its cash value.
With these three steps (define values, sharing values and engaging employees, and inserting social capital into your incentive structure), will increase your employee engagement, which will result in higher retention rates and a significantly improved company culture.