A lot of businesses are using non-monetary rewards to recognize their employees. I like the practice, but our company has always given monetary rewards through bonuses, gift cards, and even cash. What is wrong with monetary rewards? Is a non-monetary gift more motivating than extra money?
--Is Cash Still King?
Dear Cash King,
Eventually all businesses weigh the pros and cons of monetary and non-monetary rewards. In almost all cases, businesses that have used monetary rewards systems find themselves looking for recognition solutions that bring more meaning and engagement to the workplace. While the phrase, “Cash is king!” still rings true for a lot of applications, when it comes to employee recognition, it isn’t always the most effective reward.
Now, I’m not saying you shouldn’t give your employees bonuses or pay raises. Those business practices should automatically be built into your company’s budget and given at timely intervals.
Your employees deserve to be paid for the work they are doing. But, research studies show that when trying to motivate employees, non-monetary rewards such as paid and inclusive vacations, merchandise, event tickets, and other gifts are far more effective than cash.
Non-monetary rewards tend to be more meaningful and tap into an employee’s emotions. People become more motivated when they know that a prize can be won if their behaviors are deserving of the recognition. The theory is that, while cash is nice, and usually needed, the participant feels more “rewarded” when they receive something they have long wanted or may not have acquired otherwise.
Think about when you were a kid and you opened an envelope of money for your birthday. While you recognize the value of money, was receiving it as exciting or impactful as receiving a much-desired toy as a gift. Now think about how you spent that money. Did you buy something you really wanted, or did your parents talk you into investing it in some sort of savings program or bank account? Were you excited or happy about making that decision?
As adults, we are forced to look at money as a means of supporting a living. Sure, buying ourselves big screen televisions, new cars, or designer clothes sounds like a great way to spend a bonus from work, but in reality, extra money added to a paycheck becomes part of the ebb and flow of paying every day expenses. This means that when your employees are given one-time monetary rewards as recognition, they are less likely to feel fulfilled or develop a sense of long-term motivation, but rather, feel a lot more like that kid who was told to invest their money “in the greater good.”
Monetary recognition is easily lost in the shuffle of everyday life. It may get spent on bills, or lend to expensive home improvement projects. There is less emotional impact when the monetary reward is not associated with the work behaviors or the company who gifted the reward.
Cash is useful and appreciated when given as a long-term raise or a frequent and expected bonus. However, non-monetary rewards tend to be perceived as an added bonus and specifically earned for a particular achievement. Non-monetary recognition awards are memorable, and provide the employee with a continuous, long-lasting reminder of their success.
Continue to give monetary rewards, but mix up your recognition program by adding non-monetary gifts.
I hope you achieve the desired results!