The latest cover story in Incentive Magazine discusses the benefits of offering non-cash rewards as the bulk of your incentive program, which has become an increasingly popular topic within our industry. “The Continuing Case for Non-Cash Rewards” was written by Leo Jakobson and features insight by Hinda and Incentive Marketing Association (IMA) president Dave Peer. According to Peer, one of the biggest factors driving non-cash is, well, cost.
“Cash is too expensive—it costs a lot more to deliver cash awards than non-cash awards,” Peer says. Another is that companies are “having a hard time relating the financial rewards [they have been paying out] to the results they want to achieve,” he adds. “They’re seeing that cash is not the panacea they thought.”
Building on this idea, cash does not provide any “trophy value” to the recipient, which has been a point of contention within the incentive industry as far as what motivates our clients and customers.
“In every single study and every single focus group that anyone’s ever held to get a bunch of people together and ask them what they want [for an incentive award], 80 percent said cash,” Peer says. “But at the end of the day, that has nothing to do with trophy value, it has nothing to do with shared memory, it has nothing to do with engagement. Why are you asking people what they want when you know what their answer is? Why don’t you design something that achieves the objectives you’re starting out with for the program?”
The problem, Peer suggests, is that “cash is not a motivator. It’s a compensator. I think that, more and more, the pendulum is swinging [toward that way of thinking].”
We’ve discussed this before on HindaBlog: cash is not memorable. Do you remember what you spent your last cash bonus on? I do. It was bills, and I can’t even remember exactly which bills. Whether this is your intention or not, chances are your extra cash is going to disappear into the mix of your regular compensation and be forgotten.
Non-cash and the trophy value that comes with it fosters employee engagement and creates a memorable experience for the recipient, his or her coworkers and the friends and family who may also benefit or witness how the recipient benefits from receiving the reward.