Money Doesn’t Always Change Everything

 

According to the September 2021 issue of Sales and Marketing Management, using money as an incentive award doesn’t always change everything.  In fact, it may not change much of anything accept spending more and not achieving your goals.

For as long as we have been in the employee awards industry there has always been a blurred line between using cash and non-cash to improve performance.  To be overly simplistic, the easiest way to consider the two methods is in relation to what you are trying to accomplish.  Cash is part of the contract you use to hire and retain your employees.  It brings them to work, but it doesn’t necessarily motivate them to perform at the high level you want them to.  Non cash is more often than not used for achieving specific objectives with clear start and stop timing and sound measurement and feedback of that objective.  One of the biggest reasons that cash is also used in these kinds of programs is for ease of administration…all you have to do is just add some money to the paycheck.  Right?

Recently we had a potential client that had been using non-cash awards to reward employees but moved that budget to cash after a survey of employees found cash is what they wanted.  Frankly if you ask any employee group what they want for a reward they will universally say cash.  Unfortunately, when companies make that change, they rarely do any kind of measurement at the end of the reward program period to see if the change had any meaningful effect on the outcomes.  Worse, the extra cash in the paychecks will get lost in income and provide little if any motivational or lasting trophy value.  Over time it will just be considered as expected compensation and be very difficult stop.   You will assuredly end up spending more money on awards using cash than using non-cash.  In addition, the White Conference on Productivity showed conclusively that it took $3 in cash to produce the same results as $1 in non-cash.  Many clients tell us they wish they had never gone to cash rewards in the first place. 

Why consider using non-cash rewards as the best recognition for stellar work:

      ·       These rewards have emotional value that make them far more effective in driving                    employee loyalty

·       The perceived value of non-cash rewards tends to be significantly higher than the actual cost.

·       They make it easier for workers to celebrate each other’s success and talk about how they were rewarded.

·       Millennials and GenXers particularly appreciate non-cash rewards, especially for unique experiences.

 Your employees work hard.  Show your appreciation for their contributions and inspire them to reach goals with rewards they want.  Don’t just put another $50 in their paycheck.  It will get lost in the shuffle and you may lose the meaningful connection between the reward the performance.