The idea of cash is alluring – it is flexible and it gives you the freedom to purchase anything. Who couldn’t use a little extra cash? However recent studies have shown that in terms of incentives, cash may not be the most effective and engaging reward for long term results.
Contrary to popular belief, the 2015 Landmark Survey shows that when given the option, employees did not automatically choose cash as part of their reward. “The study found that on average the most preferred award experience for large awards is a travel award, presented by travel executives, communicated in a public announcement, and combined with the opportunity for special networking” (Van Dyke). This is good to know since companies are spending $77B on non-cash awards annually!
While cash rewards provide you with the ability to buy anything you want, The Economic Theory suggests that people are more likely to spend cash on utilitarian items rather than something more personally gratifying (Helion and Gilovich 2014; Thaler 1985). Once the cash is spent, the gratitude tends to go with it. When employees are provided with an experience such as a bucket list trip of a lifetime, they are able to take away priceless memories while having the opportunity to strengthen their relationships with their coworkers and executive leadership. Not to mention, a vacation is a bit more glamorous than a trip to the grocery store.
More and more we are finding that people are motivated by an experience rather than the tangible reward itself. What is the recipient’s perceived value of the award? How does the presentation of receiving the award make them feel? Everyone responds differently to various incentives so to see the most favorable ROI on your program it is suggested that you craft it with levels of personalization weaving throughout.
In the future, instead of assuming that cash is the best motivator, dig a little deeper and determine what would really engage your sales team, employees or channel members.
Written by Kalyn Tripodi
JNR Incorporated is a globally recognized leader specializing in creating custom programs that motivate, engage and reward the employees, customers and channel members of our Fortune 1000 clients. For over 35 years, JNR has designed and delivered a comprehensive suite of solutions including incentive travel, prepaid reward and gift cards, meetings and conferences, events and entertainment, technology solutions and marketing communications. Our programs produce measurable results and are proven to increase performance, loyalty and revenues.
Photo: “Flying” by Moyan Brenn is licensed under CC by 2.0