Cash has no trophy value.
In the ongoing discussion between the use of cash bonuses and the use of noncash rewards, it's a phrase most often used by most incentive companies (inlcuding ourselves). Research shows that having a trophy value associated with employee recognition programs is the most efficient incentive method for driving behavior and improving employee motivation. Ironically, when asked, most people say they would rather just receive extra cash instead. Comedian Demetri Martin puts trophy value in this perspective:
Why give an employee a "trophy" when they could just use the cash and buy one themselves if they want? Especially if cash is preferred? A University of Chicago study conducted 2004 showed that "What employees say they want and what they actually work hardest to receive do not always match up." The study showed that while most people stated a strong preference for cash, their performance was noticeably better when they were in pursuit of the non-cash incentive (according to an article on brilliantpublishing.com by Edward L Ford).
Though cash does provide for basic needs, its main downfall is how over time it can become blurred with normal compensation. Over time, a cash reward will become less of a reward and more of an entitlement. So, if an incentive is cut, the employee would view the lack of incentive as a pay cut rather than just not receiving an award.
Looking for another downside about cash? Most people don't remember what they bought with their earned cash bonuses. Therefore, there is no visual reminder of their achievement. That's where the idea of a trophy value comes into play. Instead of giving an employee $1500 cash bonus, you would give them a new flat screen television worth roughly the same amount. This method gives the employee a visual reminder of their reward and is a better reward for the purposes of bragging rights. It would be considered crass to show off a wad of bills saying "look what my job rewarded me with!" Bragging rights behind a tangible item is much more socially acceptable.
An important concept to remember is that "people don't work for money, they work for things that money can buy". So if the end game is for employees just wanting more things, why not cut out the middle man (cash) and just give them what they really want?