Which are better Awards - Cash or Merchandise ?
There is perhaps no subject debated more frequently by employee incentive program managers and their participants, than the question of using cash, or non-cash tangible recognition gifts in any of your employee recognition programs.
So, which is better, and why?
If employees were polled about recognition gifts, most will quickly say that cash is the best motivator for them. That's because, most employees don't understand what actually motivates them to do something different.
Studies have shown that when monetary recognition gifts are given, employees simply use them to pay for the same things that they would otherwise have paid cash for.
In their minds, cash recognition gifts simply go into a base salary "mental" account. As a result, the value of a cash bonus given for recognition programs, or service awards, do not stand out anymore.
Research and experience clearly indicate that non-cash incentives, in the form of merchandise, are much more successful as motivators and awards for employees than money.
Why are non-cash awards for employees better? Some very important reasons are:
Non-Cash Awards - Satisfy Wants versus Needs - Cash can be spent on everyday needs (such as groceries, bills, gasoline, etc.). But non-cash awards for employees are used for wants (such as new lawn lower, a new watch, or a new TV, etc.). Satisfying a participant's wants is the role of incentive awards, while satisfying needs is the responsibility of compensation (cash).
Non-Cash Awards - Eliminate Guilt - When a bill is due, try justifying the purchase of a new set of graphite golf clubs to your spouse or family members. But if your employee award can not be used to pay bills, you're forced to spend it on your dreams and desires. Since there is no choice, there is no guilt!
Non-Cash Awards - Are Demonstrable! We don't find much satisfaction in bragging about paying for necessities. But we do take pleasure in showing off our new TV, or talking about our recent trip. Non-cash awards are tangible symbols of our success, and they provide an acceptable and important means for us to satisfy our emotional need for peer recognition.
Non-Cash Awards - Have Memory Value. Think about a special gift you have received in the past, one that you use around the house. Do you remember when you got it? Do you remember who gave it to you and how you felt when you received it? You probably do. But who remembers where the last paycheck went? Merchandise awards provide a continuous, long-lasting reminder of ones success (or service milestone), and the efforts that went in to achieving it - along with a fond remembrance of the company who gave it to them. For example, if they earned a TV, they will remember how they got every time it's watched.
Bottom Line: If you want to your recognition program to have a lasting effect, merchandise awards are always better than cash. Even better when the employee can select their own gift from a printed or online catatlog.