Archive for the 'cash or non cash awards' Category
Many people in the incentive industry will say that cash as an award doesn’t motivate as well as non-cash. Frankly to say that cash doesn’t motivate is disingenuous. It is innately tied to our perceptions of reward as a universal motivator in this country. It is easy to use, easy to distribute, and fulfills many of the needs that people have. In difficult economic times it can certainly be very motivating.
However, there are two sides to using cash as a motivator, and to understand when to use cash and when to use alternative awards requires an understanding of both sides.
Over the years we have spent a great deal of time researching cash and non cash as an employee award and have come up with at least eight reasons why non cash may be a better choice when attempting to motivate and award employees.
For a systematic review of the features and benefits of cash and non cash please see Is Cash a Good Incentive Award?
Both cash and non-cash employee awards have their places in the compensation mix. Cash provides for the basic needs and wants, is a means to prepare for the future, compensation for work performed and acts as an incentive to perform at a level to stay employed. However, cash does not provide lasting recognition or trophy value, strong emotional reasons to improve performance beyond the standard and the flexibility to keep it from being confused with basic compensation.
Everyone on the surface prefers cash. The reality is, however, that cash can be an ineffective motivator. Although it can satisfy certain monetary demands, it does not energize most people to reach beyond the basic job requirements.
Compensation is a contract that brings people to work but doesn’t necessarily motivate them to work above their satisfaction level.
Ideally, in the compensation mix, both cash and non-cash should be offered… a salary/benefits package that adequately compensates individuals for the work they do and a line-up of incentives that recognizes and rewards their above-average performance or a special achievement. What non cash incentive award should you use? Click here.
According to a recent edition of Incentive Magazine,
“Incentive Research Foundation’s (IRF) Participant Study is groundbreaking research that will prove crucial to effectively demonstrating the value of non-cash incentive awards.”
It found that four-fifths of the program participants surveyed preferred non-cash awards as part of a total awards experience.
Past research conducted by the IRF found that vast majority of all incentive users showed that gift cards were the one award used in more incentive programs than any other award. Considering all the potential problems incentive users can face when using cash, gift cards have become the perfect alternative.
One of the reasons that gift cards are more effective than cash is that gift cards actually provide for guilt-free buying. With cash, studies show that the majority of participants actually pay bills with it and the value of the cash award is diminished, is not memorable and lacks any type of or trophy value.
When your average award in your recognition or incentive efforts is under $100, it just makes sense to use gift cards. They provide ultimate choice and dollar for dollar value in awards.
Gift card systems are prevalent in today’s award industry. For a quick review of the features and benefits of one of them, the Award of Choice, please click here.
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.