Nobody wants your points

Remember getting gold stars at school? Or maybe your primary school did stickered dots on a behaviour chart, green for good, red for bad. For some of us, that really worked. But then again, we were literal children. Unlike your employees.

After the stars and stickers, there usually came some kind of reward. Collect enough, and maybe you'd be presented with a book token (or, failing that, get to stick your hand in a jar of assorted animal-shaped rubbers).

Again, a thrilling way to reward behaviour. For a seven-year-old, that is. The strange thing is what happened next: we grew up, got jobs, got mortgages, and someone decided the model still held. Swap the sticker chart for a dashboard, the jar of rubbers for an online catalogue of rewards, and congratulations, you've got a modern employee recognition platform.

The grown-up sticker chart

Here's how recognition platforms work. Each month, you're handed a pot of points to give away to colleagues who've done something good. They collect the points you send, you collect the ones they send you, and your manager has a bigger pot to dish out from too.

After a while, you'll have a growing pile of points (putting your Tesco Clubcard to shame). And what do points mean? Prizes! Once you cash those points in, you might be able to choose something from a gift catalogue the company picked, like a gift card or a branded water bottle.

Sound familiar? This is basically the same as the sticker chart, the gold stars, the jar of rubbers, just made adult-sized.

The real reason points don't work

Here's the thing. The problem with points isn't that they transport you right back to Year 5 and Mr Carruthers' steely stare. It's more about what they're saying to employees: we do want to recognise you, but just not in a meaningful way.

Because the moment you look at what a point is really worth, the warm feeling fades away. It isn't money. You can't spend it freely. It expires if you sit on it, vanishes if you leave, and comes from a catalogue someone else picked. It's a thank-you with terms and conditions.

And that's before anyone mentions the tax.

A present with a P11D

Here's something that gets missed. HMRC lets you give an employee a genuine gift, up to £50, completely tax-free. A little something for a birthday. A "thanks for a rough week" bottle of wine. Lovely-jubbly. But there's one condition: it can't be a reward for doing their job.

That's a problem, because a reward for doing their job is precisely what a points scheme is. That's the entire pitch. Hit the target, go above and beyond, get the points. So the moment recognition is tied to performance, and it always is, it stops being a tax-free gift and starts being taxable income, like your salary.

So one of two things happens. Either the tax comes out of the employee's own pay, meaning they're literally taxed on their own thank-you. Or the company covers it, and a £50 reward quietly costs the business north of £80 once tax and National Insurance are factored in. Either way, someone's paying HMRC for the privilege of a relatively humble gift.

Where your thank-you actually goes

The tax thing is annoying. What's even more annoying is that a good chunk of a points budget never reaches the person it was meant for.

Points expire if you sit on them. They get stranded below a redemption threshold, not quite enough for anything in the catalogue. And if you leave, you usually forfeit whatever you'd banked. The industry even has a word for all the points that get handed out and never spent: breakage. Estimates put it at ten to fifteen percent of the whole rewards budget, which means a tenth of your recognition spend is lost before anyone benefits.

Where that money actually ends up depends on the small print. On some setups it quietly returns to the company. On others, the company was billed the moment the point was handed out, so the unspent thank-you just stays with the provider. Some platforms add a markup on top of every reward too, often twenty to thirty percent, though plenty now advertise "no markup" precisely because it got a bad rep.

Thank your employees like they're actually adults

None of this means you shouldn't recognise people. We're huge, huge, HUGE believers in employee recognition. And that's because being noticed for good work is one of the few things that genuinely keeps people at your organisation, more than free satsumas, more than another all-hands. The problem was never thanking people. It was doing it with points.

And the irony is that what actually works costs less effort than building a whole internal economy. The research is fairly boring about it: recognition lands when it's specific (this thing, that you did, on Tuesday), when it's quick (this week, not next quarter), and when it comes from an actual person, your manager, your teammate, rather than an automated badge that fired because a calendar told it to.

If there's a reward attached, the rule is just as unglamorous: make it something a grown adult would actually want. Something real. Something they choose. No conversion rate to decode, no threshold to clear, no expiry date quietly ticking, no branded water bottle. Just the thing you'd be pleased to be handed yourself.

That's the whole test, really. Not "will this show up nicely on the recognition dashboard," but "would I be genuinely chuffed to get this." If the answer's yes, you're probably doing it right. If it involves logging in to check a balance, you're running a sticker chart.

Our takeaway

Gold stars worked on us because we were five, and because a holographic sticker was quite possibly the most exciting thing in the whole world. But your employees are not five. They have mortgages, slightly more elevated taste (for the most part), and a fairly good sense of when they're being managed rather than thanked.

So thank them properly. Not with points, not with a catalogue, not with a currency that expires the moment they stop paying attention. With something real, something they'd actually choose, something that doesn't need a login.

They've grown out of the sticker chart. Maybe it's time recognition did too.

Huggg is free to use and you only pay for the gifts you send, with hundreds of gifts from over 120 brands and nothing for your recipients to log into. Start gifting, or book a demo to see how it works for your team.