Public sector’s taste for carrots
Public sector bodies that use gift vouchers as incentives for employees and service users say the tactic creates a stronger link between the reward and activity than cash payments. By David Benady
Voucher mania is hitting the UK’s public services. Schools, hospitals and other public bodies are taking a lead from the private sector and rewarding staff and members of the public with gift vouchers as they seek to influence their behaviour.
Over the past ten years, the Government has encouraged public sector managers to hit performance targets by offering sizeable bonuses. This trend of using financial incentives has spread to public servants lower down the pecking order in the form of gift vouchers from high street retailers such as Woolworths, Marks & Spencer and HMV.
The biggest use of the vouchers by public sector organisations is around Christmas, but they are increasingly being used year-round to motivate staff to be punctual, achieve full attendance and hit health and safety targets.
Schools are offering vouchers to pupils as young as nine to encourage them to attend lessons and reward them for good behaviour. Householders in one local authority have been offered gift vouchers if they put their rubbish out for recycling in the correct way. Meanwhile, fire stations have used vouchers to encourage staff loyalty and discourage fire fighters from taking their skills elsewhere.
However, some observers are concerned that the use of voucher and gift incentives could undermine the public service ethos, which encourages people to take part in activities – such as recycling their waste – through a sense of responsibility rather than out of narrow self-interest.
Despite such concerns, Derrick Hardman, managing director of voucher company Capital Incentives and Motivation, believes the public sector offers a new area of growth for the incentive industry. “The future for the use of incentives through vouchers or electronic cards in the public sector is strong,” he says. “Vouchers and cards are an effective way of encouraging a change in behaviour in organisations and with the public. The positive reward may prove to be more cost-effective than trying to penalise those who do not conform.”
The company issues £50m of Capital Bonds vouchers each year while up to £15m is used on its electronic Compliment Card. While the majority of Capital’s business is with the private sector, Hardman says public sector bodies are taking up the use of vouchers as they see them being successfully used by other public organisations.
He has high hopes that more councils will use vouchers to encourage householders to cut down on waste and to recycle their rubbish. In a scheme run by Nottinghamshire County Council, householders were encouraged to put out their bin with the correct material for recycling in it by being made eligible for £30 in Capital Bonds vouchers or a rucksack made from recycled materials.
Waste creation
But critics say the scheme is paradoxical. On the one hand, it encourages people to cut down waste and to recycle. On the other, it rewards them with vouchers to go and consume more goods, thus creating increased waste that needs recycling.
Another project that Capital is working on is finding ways to give the long-term unemployed an incentive to return to work by offering them retail rewards if they stay in their job for six months with further rewards after 18 months.
Hardman says gift vouchers are more effective incentives than cash, which tends to be swallowed up as part of general weekly expenditure and forgotten about. Vouchers create a stronger association between the reward and activity and people tend to remember the reason they were rewarded, he says.
Meanwhile, the use of incentive vouchers to encourage good behaviour among children is on the rise. In a scheme led by the Metropolitan Police in the London Borough of Redbridge, pupils at primary and secondary schools are rewarded with Kingfisher vouchers for punctuality, attendance and good behaviour.
Good behaviour
Operation Karrot is in its third and final year, and according to PC Kathryn Pratley, who runs the scheme, has had “some successes” in encouraging good behaviour and attendance among pupils. The Met’s interest is to combat truancy and the crime associated with it. Pratley says: “The scheme was designed to reward good kids for high standards of behaviour as well as appealing to those who needed to show significant improvement.”
Primary school pupils with 100% attendance records over a term are given a £10 Kingfisher voucher to be spent at Woolworths or Comet, while those with a 97% record get a cinema ticket and a £2 voucher. A 95% attendance record earns a £5 voucher. At secondary schools, the vouchers are for use at HMV.
Pratley says only 5% of 800 participating pupils received rewards in the first term of the scheme in secondary schools but that this jumped to 17% in the second term.
Operation Karrot has stirred up controversy. Gavin Hayes, general secretary of pressure group Compass, says: “The money should be spent on the pupils’ education. Other ways need to be found of motivating them to go to school on time and behaving well. And it is a way to get schools to do the companies’ corporate marketing for them,” he says. Others are surprised that children should be rewarded for doing what is expected of them in the first place.
Praise and recognition
Against this Catherine Forrest, business incentives manager at House of Fraser, argues that every employee needs praise and recognition and vouchers can be an imaginative and fun way of fulfilling these needs. She thinks the incentive schemes are highly effective in the public sector, particularly for dealing with problems such as staff absenteeism. “Motivation programmes can show very real results, making personnel feel included and part of a team. Productivity can be increased and customer service levels raised.”
John Bohan, business development director for gift vouchers at Marks & Spencer and a member of the Voucher Association, adds that vouchers can create a strong bond of loyalty between staff members and their organisations. They offer a double dose of pleasure, first the enjoyment of receiving the vouchers and then redeeming them at a store.
“It creates a motivational aspect to it. People remember that they went to M&S and treated themselves to a new suit and they associate this with the reward they received. If you give someone an extra £100 in their pay packet, they might not even notice it,” says Bohan.
Easy administration
According to Yvonne West, manager of Sainsbury’s Business Direct, public sector bodies prefer to use cards rather than the vouchers. “The anticipation of increased security and easy administration with cards appeals to the public sector because, in a large number of cases, they are passing on the vouchers to the general public and the less chance of misuse the better.”
In the private sector, vouchers are used in a variety of ways. Tracy Aslam, of Kingfisher Vouchers, says they can serve as a form of employee benefit because when bought in bulk, they can provide a significant discount on goods. She says frozen food manufacturer Young’s Seafood offers staff Kingfisher vouchers as a benefit. Buying them in bulk enables the company to pass on to employees a 10% discount on goods.
But John Fisher, managing director of Oxford Motivation, points out that vouchers are rarely used as incentives in isolation. “Few people will go the extra mile just for vouchers,” he says and suggests a mixture of rewards, such as lunches, trips away and a greater sense of celebration and doing something different and memorable. Offering a shopping trip down the high street is uninspired, lacklustre and bland by comparison, he believes.
The Pavlovian reward system of the incentive industry may be well suited to motivating sales people to hit their targets. But in the public services, some fear it chips away at the idea that staff should be loyal to their employers and motivated by the work they do. Vouchers also risk creating a rewards “arms race” where people won’t even bother to turn up for work on time without the promise of a £10 Woollies voucher at the end of the month.
In spite of the criticisms, it seems local authorities, public bodies and schools will continue to use gift vouchers as they attempt to change the behaviour of their staff.
