An obvious employee reward may be some kind of monetary reimbursement or award.
However, did you know that non-cash incentives can often beat pure cash when it comes to perception of value and for driving employee motivation.
In this blog, Michael Rose offers 4 main reasons why non-cash is always worth considering as part of your reward offering.
4 reasons non-cash rewards work
We all like to receive presents. There is something about receiving a tangible award that trumps cash. But, why is that?
Let’s explore four main reasons for using non-cash awards over cash, particularly for recognition and incentive programmes:
Differentiation
Non-cash awards differentiate an employee recognition programme from pay.
I was consulting with an organisation that paid recognition awards through payroll. The managers’ dominant view was that the important part of the process was the pay. The great majority of recipients, on the other hand, said that the most memorable and important part was receiving the letter of thanks recognising what they had done.
Memory value
The effect of non-cash awards is longer lasting than cash. It is sometimes said that cash is a motivator for as long as it takes before it is spent. In contrast, every time a non-cash item is used or enjoyed the recipient may remember why and it was earned.
Perceived value
The perceived value of a non-cash award can be much higher than the actual cost, so that a non-cash award is valued more highly than cash of the same value. It may be that the organisation can source an award much cheaper than the individual could. This may be because they are buying in bulk or can negotiate a better deal with a supplier or through a third party.
More personal
A non-cash award can be tailored to the needs and interests of the recipient, showing a greater amount of thought than a simple cash sum would reflect.
We only need to think about the difference between receiving a birthday present of ‘money stuffed in a card’ or a really well-chosen gift
Put yourself in the shoes of your employee
Think for the moment of a highly paid employee. I don’t know what that would mean in your organisation, but let’s say on a salary of £250,000. What would happen if you gave someone like that a cash bonus of £150? I have known people on that sort of salary level claim to be insulted with a bonus of £50,000…so now consider £150…? You would never do it. But think about it.
Now, how about if that individual received a hand-written note from the CEO thanking them specifically for something they have done, plus a good bottle of Champagne, that they know they would enjoy? Even grossed up for tax, the cost of the Champagne is about the same as the £150 we just considered. But the message is entirely different and appreciated
Evaluating your non-cash reward
A cash reward is often chosen by employers because it is easy to think of, implement and distribute, but the benefits of being more creative with a non-cash reward, as identified above, can make them a lot more valuable, even when they ‘cost less’.
For innovative ideas and effective implementation, get in touch with us today.