Archive for the 'cash or non cash awards' Category
Salaries and wages is the reason your employees to come to work, but it has really nothing to do with how well they perform when they get there.
Don’t assume that every time you have a new short or long term objective to achieve that cash is the best incentive reward to accomplish it. Look at all your options.
Did you know that research conducted for the White House Conference on Productivity showed that it takes $3 in cash to motivate the same performance as $1 in non-cash.
Contact us above for a traditional comparison of using cash or non-cash for award systems.
Is it time once again to rehash the discussion of which is better to use for employee recognition and incentive awards… cash or non-cash (like merchandise, travel, gift cards etc)?
Having been in the award industry for many years we’ve been through this debate for what seems like forever. In the beginning, it was always a point of argument with a client, as there were always some executives in any company that felt cash was the only award to use.
With all the research being done these days on the importance of recognition to employee engagement, we do hear less and less of about cash, but there are still many that feel cash is the only way to go. Our position is fairly straightforward. There are places for each in the employee benefit balance. Still, if you ask persons in the HR community you will get a strong response supporting cash as a good motivator. Frankly, as has been proven by incentive industry research this is just not the case.
Certainly cash is the common denominator as compensation for all of us, but for many different objectives it isn’t necessarily the best motivator.
This post from Paul Hebert, one of our favorite award industry gurus, and very knowledgeable on this subject, gives a great overview of this entire discussion. It is well worth the read.
When confronted with a company objective that requires motivating your employees to change behavior and produce different results, don’t just assume that throwing money at will work. If often doesn’t. You may also be pleasantly surprised to find out that you can achieve these objectives with about 1/3 of the cost of the cash program. You see, studies have concluded that it takes about $3 in cash awards to produce the same result as $1 of non-cash.
There is some interesting data that has come out of the 2012 gift card survey of subscribers to Incentive magazine. Highlights are…
- The number of respondents that said gift cards was more effective than cash rose from 27.8% to 36.7%
- As in past years, gift cards are consistently seen as more effective or equally effective as incentive merchandise. Over 56% said more effective and 34% said equally effective.
- Companies have increased the frequency with which they use gift cards throughout the year, as well as the amount they are spending on them.
- Per-recipient spending rose slightly, with spending moving from low-value gift cards to high-value ones this year.
- While spending in the sub-$100 category decreased in 2012, respondents say that budgets in each of the five categories above $100 per-recipient annually were cumulatively up 6.8 percent over 2011
- While December is still the heaviest purchase month, numbers for each of the other months were consistently up over 2011 suggesting that gift cards are being more frequently used throughout the year.
As noted in the report…
“There are signs that the incentive industry’s main message — that cash is an expensive and ineffective way to recognize and reward employees — is reaching more companies”
Gift cards have proven over and over again that they are the #1 award in the incentive and recognition award industry.
Why is everyone paying so much attention these days to the Millennial Generation? It might have something to do with the fact that they are the fastest growing segment of today’s workforce. With the daily departure of thousands of the baby boomers into retirement, companies are competing for the talents of these Gen Y folks. Today there are approx. 79 million of them, and about 76 million baby boomers. That difference will only get greater as baby boomers move on.
So what does that mean to those companies who want to hire and retain them? According to an article in the Huffington Post there are 5 things that companies need to know to entice and retain these potential employees.
Technical Savvy with a human touch…they grew up with technology, are constantly plugged in, but want and need to share experiences offline and in person.
Team Oriented…they grew up in groups and understand the value of teamwork. They are generally altruistic and think that collective action can make change happen.
Value Work-Life Balance…baby boomers believed in hard work to achieve a life goal and the adage of work hard/play hard, as long as the play came after the work. Gen Y like to work maybe more than previous generations when the job fits their talents and passions. But they won’t stay in a job for the security.
Achievement Oriented…they are ambitious and seek learning and meaning in their jobs. They have high expectations for their employers, but are not afraid to question authority.
Need Acknowledgement…like all previous generations, they seek recognition for their work and feedback and praise from people that are important to them.
Underlying much of these needs is one thing – cause. When designing employee engagement activities and recognition systems find out and incorporate those values that are important to them like employee volunteer programs. Find ways to take part of corporate budgets for various reward programs and give back a piece of these budgets allowing the employee so choose favorite charities.
And be sure to use up the moment apps for their computers and smartphones. When they can combine social media and mobile capabilities to be involved with their workmates, this can develop tremendous employee engagement.
From humble beginnings within the incentive industry over a couple decades ago, gift cards are now the leading award in certain types of reward and recognition programs.
This research from the Incentive Research Federation is quite enlightening. The main conclusion drawn from the survey is that respondents preferred gift cards over cash, 83% to 17%. That’s really astonishing as for years and years the predominant award in incentives and recognition programs has been cash.
Some might say that the survey was skewed a little because the value of the award they used was only $50. We’re sure that detractors of the research (those who sell awards that compete with gift cards) will use this distinction with the assumption that the higher the amount, the more the survey will lean to cash or other merchandise awards. That may be true to a point, but this is not the first research in the last few years that points to gift cards as the number one award of any other non-cash awards in the industry. Actually, as the vast majority of awards used in programs today tend to be $50 to $100 items, this research is very straightforward and accurate.
In many respects cash as an award has outlived its usefulness. Gift cards as noted in the article are easier to administer than cash, are more thoughtful than cash and with gift cards the administrators cited their ability to match recipient’s interests. Using cash in difficult economic times would seem to be the best possible award to use in programs, but the opposite seems to be true. The article states:
“The popularity of gift cards can also be linked to the economic challenges faced by many employees. Recipients account mentally for that (the gift card value) money differently than what they do with their household budget, especially in a recession when the money is tighter, the concept of guilt-free spending – a reason not to spend on household bills – becomes more prevalent and more powerful.”
The usage of open loop (bank cards) and closed loop (retailer gift card) in award programs is about evenly split. Many like the convenience of using a bank card because of the unlimited options for redemptions, while others like to use gift cards because they don’t have the limitations inherent in using bank cards.
With Award of Choice, you have the best of both worlds, tremendous choice with over 500 of the most popular gift cards to choose from and no limitations when they are redeemed.