When it comes to motivating employees, the myth is that everyone prefers cash. In reality, the opposite is true. In fact, the use of non-cash rewards by U.S. companies has recently exploded. A recent Incentive Research Foundation study estimates that the number of firms using non-cash rewards has risen sharply from approximately 25% in the 1990s to more than 80% in 2018.
Administrators like you have found that applying a recognition focus is integral to building high-performing teams. This is especially true in today’s competitive job market, which emphasizes employee engagement. So, if non-cash incentives have the greater advantage, why are they more effective? Let’s consider what end-users had to say about their experience with non-cash awards.
IRF’s research team interviewed 50 end-users about a range of non-cash rewards programs in order to understand what they considered relevant and compelling. Results from this 10-month 2018 study revealed that cash is not widely preferred, and that it is firmly viewed as compensation (i.e., another business transaction). On the other hand, the merits of non-cash rewards were extolled as complementary to compensation, and tied to an entirely different sentiment. Whether a program was small and new or had run for years on a million-dollar budget, non-cash recognition was viewed by survey participants as celebratory. Celebratory!
From a social aspect, the impact on corporate culture is that non-cash rewards are more fun and memorable than cash. Non-cash rewards are more likely to be discussed with pride and a friendly sense of competition. When a teammate earns a weekend trip or Amazon gift card, she will tell her coworkers and they will usually applaud her. By contrast, earning a cash bonus could create envy or sense of entitlement. Where one reward ignites imagination and inspires a chain reaction, the other is kept hush per social norms to avoid invoking jealousy.
Industry research has shown us that merchandise and travel rewards provide a lasting reminder of success, lengthening the boost in a participant’s performance. A survey of corporations by the American Productivity & Quality Center found that “sales incentive programs offering non-cash awards generated more tangible results than those offering cash.”
Participants also report feeling more satisfaction from non-cash awards because they don’t have to feel guilty spending them. Whether points, gift cards, or trips, inherently the reward is thought of as “extra.” Compare that with being awarded $1,500 in cash, which might be applied to a loan or bill, and you can guess which will probably be more memorable. In our experience, we have seen countless surveys in which the participant had fun and felt valued—the makings of memories.
Non-cash programs are easy to promote, too. It’s uplifting to work on giveaway marketing, and your employees will engage in water cooler talk about which prizes they’re striving to earn. Even outside the office, participants are likely to create a buzz about the wonderful “perks” their company provides. While they’re considering how to improve their performance, outsiders are drawn into the story of your company.
Recognition is fundamental to achieving a cohesive, high-performing organizational culture. At VIKTOR, we are well-known for our performance-related incentive trips and rewards programs. Some also know that we have an engagement team who helps make the staff’s hard work worth the effort. We may hold an outing, order in Chinese food, bring out the snack trolley, or reward wellness activities with points redeemable at our online store. These are just a few of the ideas that can be implemented in an office setting. You might even find your staff has a few suggestions of their own.
You’re already committed to employee recognition. As you plan your next motivational reward, we hope you’ll take a closer look at non-cash rewards to see what’s most meaningful to your participants.