What is better for employee recognition? Cash or Merchandise Awards
Cash or Merchandise Awards for employee recognition

This question is often debated by employee recognition program managers and company executives. Shoul they just give cash as a recognition award, or should they give non-cash merchandise awards.

What is the role of Employee Recognition Awards

While employees will say they prefer cash to merchandise recognition awards, research has repeatedly shown that cash is a very poor motivator. This is due to its lack of "trophy" and "memory" value. Generally, employees don't really understand what actually motivates them to do something different.

If you are thinking of awards to give employees, consider that when monetary awards are given as an award, employees will often perceive the cash to be part of their total compensation package. Once cash awards are started, its very hard to stop. Employees  people feel entitled to it, and expect it to continue. They quickly forget that the cash gift or award was part of your employee incentive and recognition program.

The value of cash as recognition awards, such as safety recognition awards, or years of service awards, does not stand out in their minds.

Research and experience clearly indicate that non-cash incentives, in the form of merchandise, are much more successful than money as an incentive award.

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Here's some reasons why non-cash awards are better Recognition Awards. 

Non-Cash Employee Awards - satisfy a person's Wants versus Needs. Cash can be spent on everyday NEEDs (groceries, bills, gasoline, etc.), but non-cash employee awards are for Wants (such as a new lawn mower, a new watch, a TV, or hotel package, etc.). Satisfying a person's Wants is the role of employee recognition, while satisfying Needs is the responsibility of compensation plan (cash).

Non-Cash Awards - Eliminate Guilt. When a bill is still due, try justifying the purchase of a new set of graphite golf clubs to your spouse or family members. But if the recognition award can not be used to pay bills, the employee is forced to redeem it on their dreams and desires. Since there is no choice, there is no guilt!

Non-Cash Awards - Are Demonstrable! They have a certain Trophy value. People don't find much satisfaction in bragging about paying for necessities. But we do take pleasure in showing off an award, such as a new TV, or a new set of golf clubs. Non-cash awards provide visible, tangible symbols of success, and are an acceptable and important means for to satisfy emotional needs, and for peer recognition.

Non-Cash Awards - Have Memory Value. Think about a special gift you 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 recognition awards are memorable, and provide the employee with a continuous, long-lasting reminder of their success (or service milestone)...and the efforts that went into achieving it... along with a fond remembrance of the company that gave it to them.

If you want employee recognition
to have a lasting effect,
merchandise awards are always better than cash.

Give Awards that fit your budget! We offer many price levels for Recognition Award Packages, so they can fit every award and gift giving budget. (Gift Catalog Award Packets - details)


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See the many ways you can recognize Employees

  • See our many Recognition Solutions. Whether its a performance award, service award, or a holiday gift, all of your employee recognition components should work together to motivate and increase performance through better engagement.