Why Do Some Employee Discount Programs Fail?


Quick Answer

The main reasons why some employee discount programs fail is that the discount perks are not sufficiently beneficial to the employee, the discounts are perceived as unfairly distributed or the discount benefits are improperly communicated to the employee. For the most part, discount perks and other non-pay related programs that are properly executed are beneficial to both employee and employer.

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Full Answer

Positive employee reward programs, such as offering employee perks and discount plans, can psychologically engage employees and are often more beneficial than pay raises. Employees who are happier and feel fairly compensated in more ways than monetarily are less likely to quit, call in sick and be stagnant in their job performance, according to The Chartered Institute of Personnel and Development.

The opposite effect, or failure to have happy, dedicated employees, can exist and even be perpetuated by a discount program is not offered fairly or is poorly communicated and executed. One main pitfall is the perception of the program from the employee's perspective. Often, employees perceive a discount program as a recommended or required product or service that is endorsed by the employers or an incentive that is not offered or beneficial to everyone. The miscommunication of expectations can spell failure in an otherwise productive program. Communication, fairness and an employer's willingness to seek feedback from focus groups and surveys to determine employee's needs, expectations and attitudes can help a discount program succeed.

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