What You Should Know About: Cash vs. Non-Cash Incentives
"Cash doesn't always equate to a reward, as it has no lasting effect. Perceptually, it gets mixed in with your income and then spent on bills or other routine expenditures. Noncash rewards create a longer-lasting association with the award and reinforce the accomplishment that earned the reward. You also have the ability to share your noncash reward with family members, which is a motivator for staying engaged. It's important to the success of your incentive program to work with experts who can help you understand these motivations and which rewards are highly desired."
John Hornbogen, CPIM, Vice President, Business Development, RPG Card Services & President, Incentive Marketing Association
"A thoughtful gift is a symbol of true gratitude. Noncash rewards are tangible awards that winners can share and talk about with their family, friends and colleagues. Recipients should get the honor of sharing their success with others, and merchandise rewards allow them to do so."
"Would you rather work hard to reach your goals for a $1,000 watch or a $500 gift card? I know it might be easier for an admin to run a cash program, but you have to think of the consequences when the employee's reward is taxed as income and they figure out the budget. It will haunt you."
Joe Zanone, Authorized Sales Agent, Movado Group Inc.
"I love to reflect upon an old Yogi Berra quote when it comes to this topic. He once said, "You can observe a lot by watching." What our logical brain tells us as business leaders vs. what Dan Ariley's best-seller "Predictably Irrational" (a must-read) of nearly 10 years ago tells us, is that there are hidden forces that shape our decisions. And as Yogi said, you need to observe.
The typical business leader's logic that cash is king doesn't match up to the data and research. And in an effort to make better-informed decisions, leaders 'ought to know this.'"
Brant Dolan, CPIM, Director, Business Development, Quality Incentive Company & President, Incentive & Engagement Solution Providers, IMA
"Managers in business today should be crystal clear: Their workforce, the millennials, are infinitely more interested in experiences and recognition from their peers than the digits on their (virtual) pay stub. All of the research that we have seen lends itself to the devaluation of pure compensation, and the valuation of events and anything that puts them in an esteemed position, recognition in some form or another, relative to the people inside their own organization."
Mike Landry, CPIM, Vice President, Special Markets, Tumi Inc.