Make My Day!
Employees – and people in general – yearn to be appreciated. Recognizing and appreciating employees can bring out the best in workers, a theory based on the premise that behaviors that get noticed typically get repeated. How popular are recognition and reward programs in the St. Louis business community?
The Survey Says
According to a 2014 survey of 184 metro St. Louis businesses conducted by AAIM Employers’ Association, 46% of the responding companies use a recognition or reward program to reinforce key employee behaviors such as perfect attendance, exemplary safety record, long-term service, high productivity and superior customer service.
The five most popular types of rewards indicated by survey respondents are gift cards, employee’s choice of item from a catalog, a plaque or certificate, company logo gear, and cash.
Issues to Consider
As usual, be aware that Uncle Sam usually gets rewarded too, through taxes on certain employee rewards. In general, awards and prizes that have more than a de minimis value must be treated as taxable income to the employee. Examples of de minimis rewards or gifts that would be exempt from withholding include occasional tickets for events, holiday turkeys or hams, flowers, fruit baskets, and books. Keep in mind that the IRS never considers gift cards or cash de minimis benefits; therefore, taxes must always be paid on these rewards. Be sure to check with your tax adviser for further guidance.
Article provided by AAIM Employers’ Association, which helps Missouri and Illinois companies manage their people and processes. For more information, contact the Research & Solutions Team at solutions.team@aaimea.org.