Loyalty Program Overview

PayPal recently launched their in-house, blockchain-based employee loyalty program (hereinafter “Loyalty Program”) for employees who participate in “innovation-related programs and activities” [4][6][7].

Employees will be rewarded in tokens, redeemable for over 100 experiences including “play[ing] poker with PayPal’s vice presidents” [4][6][7].

The Loyalty Program website acts akin to a social media feed where employees can like and comment on innovation activity [4][6][7].

Loyalty Program Review

PayPal has provided a good example of how to implement a blockchain-based employee loyalty program.

First, the Loyalty Program easily meets the purported or ideal goals of any employee loyalty program:

Incentivized mechanisms;

Transparent goals; and

Recognition accountability [1][2][3][4][6][7].

Furthermore, the Loyalty Program encourages both top-down recognition, as managers can recognize employee innovation activity by rewarding them with tokens, and peer-to-peer recognition, as employees can track their fellow co-worker’s innovation activity on the Loyalty Program website [1][2][3][4][6][7][11]. Moreover, the Loyalty Program embodies the four principles necessary for a successful employee loyalty program [1][2][3][4][6][7][12].

Second, PayPal has improved its simple, yet quite effective, employee loyalty program by implementing an application-specific blockchain to track employee performance [4][6][7]. In so doing, PayPal has made some very significant achievements that other companies can look toward for their own employee loyalty programs [4][6][7].

For example, PayPal’s attempt to create its blockchain in-house relieves the need to rely on third parties to create and/or maintain their blockchain, or having to build their rewards program on another blockchain network such as Bitcoin or Ethereum [4][6][7]. By building their own blockchain, PayPal has complete control over their network, and does not have to worry about rifts in a third party blockchain network’s community leading to unwanted hard forks [9].

Additionally, PayPal can use their employee loyalty program as a reference in implementing their own blockchain payments solution or possibly offer their blockchain-as-a-service (BaaS) to other companies who want an employee loyalty program [4][6][7][8].

Though, it must be kept in mind that PayPal is one of the largest payment processing companies in the world, and has the funding and expertise to create their own without derailing their existing business model [4][6][7][9].

Conclusion

Employee loyalty programs are an effective means of encouraging employee performance through incentivized mechanisms [1][2][3].

PayPal’s blockchain-based employee loyalty program, therein to encourage participation in “innovation-related programs and activities,” provides us with an interesting example of how blockchain can apply even in this area [4][6][7].

From hereon, it will be interesting to see how PayPal will use their employee loyalty program to aid in its development of a blockchain payment solution and whether PayPal will offer their employee loyalty program as a BaaS to other companies [4][6][7][8].

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