When it comes to compensation above and beyond salary or commission, companies have traditionally turned to cash. It’s fast, it’s easy and everybody likes it! But according to The Incentive Research Foundation (IRF), many companies are now recognizing that cash awards and incentives aren’t necessarily the best way to go. Here’s the case against cash:
It’s expensive. This might sound a little counter-intuitive – after all it only costs what it is, right? But in order to provide a cash gift that really resonates, you have to give a substantially higher amount than a merchandise gift would cost you.
It’s forgettable. Remember that first $10 bill you found tucked inside a birthday card? Probably not. Once cash is gone, it’s gone – and so is the mental and emotional link to the giver and to the work performed that earned the award.
It’s not a motivator. It’s a compensator. Employees certainly appreciate cash, but they typically view it as part of their “due”, not as something extra to work towards. A study in the journal Human Performance reports that non-cash awards lead more often to increased efforts on the part of employees – up to 37% better than employees getting cash awards. Also, research by the IRF showed that among companies studied, the top performers were more than twice as likely to use non-cash awards as motivators than average or lagging companies.
For some profitable ideas on how to make non-cash awards work for you, contact Award Concepts today.