There has been a decades-old discussion in the motivation industry around the value of cash vs non-cash rewards. And in the current economic environment of wage freezes and layoffs, the idea of additional cash for gas and groceries is certainly appealing. However, when it comes to rewarding employees and driving behavior, cash is not king.
A 2010 study that was featured in an article written by Paul Hebert of I2I, a South Carolina consultant in the incentive industry, offered strong data from a controlled field experiment which measured the extent to which monetary and non-monetary gifts affect workers’ performance. This study concluded that even though workers often elect a cash gift when given the choice, non-cash gifts are more effective. According to the research, ” … a gift in-kind of equivalent monetary value has an economically and statistically significant effect on productivity. Workers provide 30 percent more output on average.”
This information is a strong testament to the fact that just creating an incentive program to recognize and reward employees is not always enough to reach the intended goals. It’s important to understand the best type of recognition vehicle for your associates, and the most effective method of presenting the award. Cash gifts are easy – they require minimal effort from management and can be given quickly for the occasional on-the-spot recognition. However, the cash is spent and forgotten quickly, while the gift will remain a constant reminder of the employer’s appreciation, thus driving the desired behavior.
Motivating employees requires creative thinking, and there should be more than one tool in the employer’s incentive program box. The next time the HR team gets together for a discussion on improving morale and increasing productivity, invite your incentive partner and ask for ideas on how to integrate effective premium products into a well-rounded program. Your employees will thank you!