Natural Foods Merchandiser

Wrap up thanks with employee gifts

One of the traditional strengths of natural foods stores is customer service. With the right employees, good service is effortless; without them, it's next to impossible. Happy, knowledgeable staffers are the key, and the best way to keep them is to show appreciation for their work. That's why employee gift programs can be such an important tool for nurturing loyalty and reflecting company values.

"People who don't think reward and recognition are important are absolutely missing the boat," says Susan Heathfield, founder of Heathfield Consulting Associates in Williamston, Mich., and author of the human resources page on "When I ask employees to remember a time when they felt wonderful about their work, the first one that comes up is a time they were recognized for their contributions."

Though small stores may not be able to match the bonuses that larger corporations routinely dole out, there are many ways that employees can be celebrated without breaking the bank.

"We do things for every birthday, wedding anniversary, Christmas and Thanksgiving," says Ray Alli, owner of four Total Health Center stores in the Baltimore area. The stores range from 600 to 1,500 square feet and average nine employees total. "For employees on their birthdays, we usually give a diamond bracelet or necklace. It's not expensive, usually under $100, and they appreciate the thought," he says. In addition, the company gives regular Christmas bonuses ranging from $100 to $500 per employee.

Though the thought of handing out diamonds might scare some retailers, Alli says that the benefits far outweigh the expense. "I think any store can do something like this," he says. "Even a small store is making a quarter-million a year. You're telling me you can't afford to spend a thousand on staff members? If you don't take care of good employees, they're going to become bad employees and leave the company." Alli's own staff includes a number of employees who've been there for five to 12 years, so his approach seems to work.

Even small gifts can have meaning when they're given with a personal note. "Gifts under $20 are spent pretty quickly, so the employee memory of the gift is short-lived unless it's accompanied by a card in writing," Heathfield says. "Once the gift is spent, the card can sit on an employee's desk for years. It's so important, and such an inexpensive way to recognize them."

Heathfield believes that it's the recognition, rather than the money or gift, that means the most to employees. She cautions against giving money without giving thought to the gift. "The worst thing you can do is let it show up in a paycheck without telling an employee why it's coming," she says. "When you give recognition, whether in a card or as a verbal thank you, you are absolutely reinforcing the behavior you want to see more of."

Vitamin Cottage, based in Lakewood, Colo., is a larger operation, but still finds ways to acknowledge its employees. "We give all our employees birthday bonus pay—an extra eight-hour payday in their birthday month," says Heather Isely, executive vice president of the family-owned regional chain. "Our mom loved to celebrate birthdays and used to take every employee out to lunch on their birthdays. Now, with 900 employees, we can't do that, but we wanted a tribute to mom's caring."

In addition, the company gives gift cards redeemable at local retailers such as REI and Target on every anniversary of an employee's start date. "We give at least one gift card, but we place a special emphasis on the fifth, 10th and 15th anniversaries," Isely says. "For five years of service we give cards to five different retailers, for 10 years we give 10."

In addition to the gift card program and the birthday pay program, Vitamin Cottage takes a more personal approach to employees' lives. This has less to do with monetary value and more to do with making employees feel cared for and valued. "It's not modeled on anything," Isely says. "But it's more in the spirit of my mom, who was so gregarious and cared so much for people.

People who come to work for us are family, and we want to acknowledge their lives outside of work.

"We try to acknowledge important events—birth of children, a death in the family, graduation from school," she adds. "We usually do this with flowers or cookies. People who come to work for us are family, and we want to acknowledge their lives outside of work. That allows them to be able to contribute to work knowing that the company understands they have lives outside of work."

Another approach to giving is to make use of employee achievement awards. However, Heathfield cautions that not all achievement awards work. "I have found that programs like employee of the month, week or day are terrible," she says. "Often, people view it as just being someone's turn to win it. I'm a serious fan of establishing criteria [for an award], and anyone who meets it gets it."

Achievement-based awards can be set up in a variety of ways. "Some companies have formal systems where the employee gets nominated by another employee and a manager writes out a card," Heathfield says. "Others have informal systems where employees can reward each other. In some cases only managers can nominate, but you have to be careful that all managers are on board, or you'll have some departments where everybody is recognized and others where nobody is."

A final consideration is tax liability for both employee and employer. "We give employee achievement awards," Isely says, "which is an important distinction to the IRS. If you gift employees, it has to be taxed." Under IRS rules, awards for safety achievement or length of service are not taxable if the value of the gift is minimal and the gift is not cash or cash-equivalent, which is taxable. It's worth discussing this with an accountant before making a decision about what types of awards might work in your retail situation.

Finally, it's wise to ask employees what kind of reward program they'd like to see. After all, in the end it's the employees' opinion that matters most.

Mitchell Clute is a Fort Collins, Colo.-based freelance writer.

Natural Foods Merchandiser volume XXVIII/number 12/p.22,24

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