In most things in life we all have different tastes and opinions. Pineapple on pizza, skim vs whole milk, country vs city living...we could go on and on. Different opinions are a good thing, and welcoming diverse perspectives often leads to more interesting life experiences—and more interesting life experiences are the spice of life, right?
At Awardco we’re often asked why people shouldn’t just offer cash as a reward option instead of tangible rewards people can choose from. While it’s true cash is a reward almost everyone likes, there are several things cash can’t do—and those things are overlooked too often.
Tangible rewards offer certain benefits cash can’t compete with—no matter the amount.
Here are five things cash rewards can’t do:
Give daydream value.
Tangible rewards can ignite the imagination in a way that enhances the value for the employee. If excitement surrounds a tangible reward it motivates employees to earn the reward, which ultimately leads to happier employees!
Think about it this way: if you offer a trip to Hawaii as a reward, people will think about the warm beaches, the green jungles, and the surf and snorkel opportunities. They’ll daydream about what they’ll do on that vacation, and that will enhance the value of the reward overall.
Offer more than just compensation.
Cash often turns a reward into expected compensation (looking at you, holiday bonuses!) and can lessen the power of a reward given in appreciation. Using points (or something like it) where employees can get physical rewards bypasses this issue entirely.
Tangible items retain the excitement of a bonus without making it feel like an expectation. Think about all the company parties you’ve attended, and while cash bonuses are likely still given out, most companies couple those bonuses with material items. Why? Because it increases the value for the employee, and feels like an extra bonus on top of what might have been already expected.
Allow a guilt-free splurge.
Cash can lead employees to associate their reward with feelings of guilt if they don’t use it on necessities or bills. This is especially true for any bonuses or monetary awards which are added to the employee’s paycheck. They may not even notice the difference on payday. Using points for tangible rewards help employees feel better about splurging on themselves.
Too often in today’s world employees are using their bonuses for necessities instead of what the company may hope they’re used for: experiences that will help them feel greater joy. Now, we’re not here to tell anybody that getting out of debt or taking care of necessities can’t bring joy. It absolutely can! But if you’re giving out cash rewards in the hope that your employees are using it to get something nice for themselves, you might want to take a hard look at what your employees are actually spending that cash on. If it’s necessities, maybe you need to think more about a material reward (or a nice pay bump to help cover those necessities!)
Provide trophy value.
“I used my rewards points to get that incredible TV I’ve always wanted!” sounds a lot different than “I got a big bonus and spent it on a huge TV.” Encouraging social reinforcement with tangible rewards rather than cash has big benefits for your company both internally and externally. Not to mention there’s less social guilt when you acquire a really nice TV on someone else’s dime vs when you use your own money. Just sayin’.
Grant halo effect.
Tangible rewards linger in the mind much longer than cash, and provide a longer-lasting boost in performance. Case in point: try and remember an employee reward, trip, or tangible reward you were given. Now try to remember the amount of your bonus that year!
Also, here’s a little secret: this halo effect we’re talking about is essentially an appeal to the emotions of your employees, which can lead to longer-lasting effects from the reward you give.
With all this being said, we realize this is absolutely dependent on your organization’s goals and beliefs. And let’s just address the elephant in the room here: cash IS a viable, good, and often motivational reward. However, is it the BEST reward you can offer? Will it motivate your employees the most? Will it have the most impact as far as the happiness of your employees, the overall health of your workforce, or the motivation of your teams?
Furthermore, consider this: why not do BOTH cash and a material reward, and get the best of both worlds? Something to think about as you build your own recognition programs and decide how you want to reward and incentivize your people.