Both cash and non-cash awards are used to recognize performance. Non-cash awards include awards, trophies, and plaques. Most employees will tell you they prefer cash to an award. Non-cash awards, however, benefit the organization and the recipient in ways that cash cannot.
Non-cash awards will give you a bigger bang for your buck and will benefit the recipient in countless ways. Awards make memories, attract attention, are luxuries, and hold immeasurable value. Choose to give an award instead of cash when you want to make a lasting impact!
What is a Cash Incentive?
A cash incentive rewards an employee using salary increases, profit sharing, stock options, bonuses, and additional paid vacation time.
What is a Non-Cash Incentive?
Non-cash incentives, or “stuff“, include increases in employee freedom, awards, trophies, and other valuable gifts. These incentives are transformed into a symbol of achievement and accomplishment.
Cash Versus Non-Cash
Historically, organizations have used cash incentives to keep morale up and attract new employees. However, recent research has proven that non-cash rewards are more effective.
Non-cash awards:
Make Memories
Hold Immeasurable Value
Are Luxury Items
Create “Trophy Value”
Make a Memory
Research by the SITE Foundation has shown that when people receive cash awards they unconsciously add the cash bonus to their net income. It is hard for people to separate the value of the cash bonus from their total compensation. It is difficult for the recipient to memorialize the award.
On the other hand, recipients do not combine the value of an award with their income. Instead they consider it a separate entity, which makes the award experience more memorable.
Immeasurable Value
Recipients typically attribute non-cash awards a higher value then cash. They inflate the value of the non-cash award because they do not know the baseline cost. The award becomes a symbol of the entire award experience and is more valuable.
Luxury Items
A luxury item is something a person would not normally purchase. Many non-cash awards are considered luxuries such as vacations, trips, electronics, crystal, etc? It is easier for a person to accept a luxury item as an award then to purchase it. These out-of-the-ordinary items carry a higher value then cash and make a longer lasting impact on the recipient.
Create a “Trophy Value”
Non-cash awards call attention to themselves whereas cash is rarely discussed. Co-workers, family, and friends tend to admire awards. These awards call attention to themselves and indirectly to call attention to the accomplishment. The award itself serves as a constant reminder of the success.
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