Is it time to add more non-cash to your rewards portfolio? This is the question posed in the January/February 2012 issue of Premium Incentive Products (PIP). And the answer, in a nutshell, is “Yes.” But this is not news. What is news is that, while the topic of non-cash incentives has been hot throughout the incentives industry, big-name thought leaders such as McKinsey, Deloitte, The Harvard Business Review and PricewaterhouseCoopers are now weighing in on how non-cash incentives play into the total rewards mix.
According to the PIP article, the benefits of offering non-cash incentives to your employees are multi-fold – for the employee as well as the company. With regard to the company, non-cash offers more affordable ways for employers to reward or acknowledge employees without breaking the bank, or “do more with less,” essentially.
Regarding the employee, a non-cash incentive holds trophy value that plain-old cash does not. Furthermore, the article points to a report published by McKinsey, which states that “non-cash motivators – including praise from immediate managers – can be more effective than the three highest-rated financial incentives: cash bonuses, increased base pay and stock options.”
This is interesting as it shows that, while necessary, money is not the only motivator when it comes to work. Cash alone is basically enough to ensure that the work gets done, but praise, engagement and other non-cash incentives satisfy the employee’s need to connect, learn and feel part of something that a bi-weekly paycheck does not afford.
Cash is always going to be at the forefront of the compensation discussion. It’s the first thing that’s discussed during the hiring process and represents the initial pact between employer and employee. It’s what the employee expects every payday and what ensures his or her bills get paid. This is what motivates us to get hired somewhere in the first place. But what motivates employees beyond that? What does the employee really want to get from the job? According to Deloitte, they want “rewarding work, meaningful relationships, freedom, flexibility and acknowledgement.”
These are things that money just cannot buy.