Tis the season to be jolly—and if you don’t keep a close eye on your employees—they’ll have a jolly good time lavishing your money on THEIR clients in the hope that they’ll accept their nasty little bribes ad throw a little extra money their way next year.They won’t. Clients are perceptive people who’ll see through your employees’ lame attempts to buy their business and will shop elsewhere. Industrial Market Trends says gifts are a waste of money. “No one is required to give gifts,” says Phyllis Davis, a business etiquette expert. And giving gifts can get you into trouble with the authorities.
New York brokerage firm, Jefferies & Co., ended up paying more than $10 million in fines after it spent thousands of dollars on concerts, Super Bowl parties and $625 bottles of Chateau Petrus when it attempted to woo business from Fidelity Investments, according to the Boston Globe. The only good news is that the judge realized that the firm was innocent and that the incident was caused by the firm’s greedy staff who were attempting to increase their personal commissions. As a result he didn’t require an admission of guilt.
Earth Times reports that as a result of incidents such as these, more and more firms are eliminating gifts. They say that only 59 percent of companies plan to buy their clients gifts this year, compared to 70 percent in 2006.
The publication states that companies who give gifts to clients also spend more on their workers—79 percent of gift-giving companies offer health insurance, compared to the 60 of non-gift-giving companies. And 32 percent of gift-givers hand out bonuses during the year versus 21 percent of non gift-givers.
As well as having a policy on giving gifts, you need a policy on accepting gifts. We don’t permit our employees to accept gifts because it costs us money. Studies show that employees who are given gifts—even small items like promotional pens and chocolates—are more likely to steer business to that company, regardless of the cost or product quality.
Even if your staff are scrupulously honest, accepting gifts still costs you money because business etiquette requires all gifts to be acknowledged within two weeks of receipt. Ask yourself: Do you want your staff wasting time writing thank-you notes, or spending their time working?
Last night I had some spare time and decided to leaf through some old copies of The New York Times I had lying around. I found an article in a 1996 edition about Manuel Canovas, the high-end France upholstery fabric and was very impressed with the way they handle gifts. Company President, Pierre de Champfleury, his company takes possession of everything that employees are given. He said that DHL showered the firm with gifts—practical things like staplers and microwave ovens—and that the 60 or so employees knew instinctively that the entire booty belonged to the company. I always said the French were a well-trained nation of people.
And if you’re thinking of giving your employees gifts, think again. According to the National Federation of Independent Business’s Business Toolbox, you could be doing your staff a disservice by putting them into a higher tax bracket. The Federation says that if you give an employee a gift certificate to purchase a turkey, you must report that as income on their W2. So save yourself—and your employees some money by saying “NO” to gifts once and for all.
To stay one step in front of the competition, check out my latest book: Dr. Young’s Guide to Demotivating Employees at Dolyttle & Seamore.
While I don’t really have any interest in hearing what you have to say about anything, if you have a burning desire to get something off your chest, email me: dryoung@demotivationist.com.
