Recognition programs offer a wide variety of awards. Some use solely cash awards for employee incentives. Other programs present non-cash awards like trophies, plaques, days off, and a plethora of sponsored items like t-shirts, hats, thermos cups, and more. The purpose of cash and non-cash awards is to encourage productivity and collaboration, improve workplace morale, and in general, improve the environment in the workplace. A recent study published by the Incentive Research Foundation suggested that non-cash awards may have quite an edge over cash rewards.
The Numbers Behind Workplace Recognition
The study presented a strong case for recognition programs and how powerful and effective they can be. Companies receive many great benefits. But stakeholders, organizations, and employees benefit as well. Some of the highlighted stats from the study include:
- Awards motivate employees so that they put more effort into their work.
- Strong employee reward programs increase engagement, performance, and retention.
- Recognition provides far-reaching benefits including better customer service experiences for customers.
Cash vs. Non-Cash Rewards
Which one is better, cash or non-cash awards? More recent research indicates that non-cash awards offer the same or greater returns than cash rewards. Some studies suggest that employees who earn larger salaries are often more motivated by one-on-one praise, peer recognition, and physical awards than they are by cash rewards or raises. The trend holds true as more companies turn to the use of non-cash awards as part of their employee recognition programs.
Why are Non-Cash Rewards Better than Cash Rewards in General?
Researchers and experts have come up with a few possible theories to explain why non-cash awards outperform cash, especially when it comes to employee productivity. Some potential reasons include:
1. Effort, Performance, and Perseverance
When people are attracted to an award, or to recognition, they want it. This motivates them to work harder to earn it. Why is this important? It leads to a change of behavior. Non-cash awards like trips or trophies tend to be more attractive than cash bonuses. When employees are attracted to an award, they work harder, and the final result is increased performance.
2. Mental Accounting
A cash reward triggers the process of mental accounting. The recipient blends the award with their salary, and it gets absorbed into regular payments like utility bills, car payments, or buying groceries. The result is that the cash award provided them with very little meaning. Non-cash awards, however, can stay in the recipient’s memory for years. When given a non-cash award, on the other hand, people often have lasting memories of the work it took to earn it. Their memories of the association or organization are positive.
3. Social Signal
Making non-cash awards visible is socially acceptable. For example, if an employee wins a trophy, plaque, or some other physical reward, they are likely to post it on social media. They will continue to share details with colleagues and coworkers the next day. However, cash bonuses are less likely to be shared socially as they can come off as bragging. Non-cash awards, then, generate more discussion, anticipation, and positive side effects than cash rewards.
Cash awards tend to be “transactional” meaning they don’t carry a lot of relationship-building and positive emotions. Non-cash awards, on the other hand, have an emotional impact and triggers appreciation. This leads to a stronger desire to reciprocate the gift because more thought was put into choosing the award.
Let Suburban Custom Award’s Experience Work for You!
Organizations, employees, and even customers benefit from recognition programs due to the success it breeds. The research behind non-cash awards indicates they provide more personalized experiences and are more powerful than a gift card or a bonus. If you’d like to learn more about non-cash awards and their role in the workplace, contact us at Suburban Custom Awards. We have a variety of styles when it comes to plaques and trophies. But we also have performance-encouraging items like pen and pencil sets, alder wood gift boxes, and more. Make Suburban Custom Awards part of your successful employee recognition program!