Cash is king, right? Wrong.

cash is kingWhy do so many companies (and employees, for that matter) still get it so wrong when it comes to understanding the merits of non-cash over cash rewards?

Four years on, it’s still difficult to find a more engaging illustration (literally) of this point than best-selling author Daniel Pink’s iconic 2009 animated video Drive: The Surprising Truth About What Motivates Us. Pink of course showed us that cash incentives actually have an adverse effect on performance for people performing roles with even a basic level of cognitive skill.

And plenty of other controlled studies have shown that shown us that people chasing non-cash rewards outperform those chasing cash rewards by three to one.

In general, we know why.

Cash is impersonal. It quickly loses its connection to the reason it was awarded in the first place. And it often gets blown on bills or household items, rather than a personal treat. It’s difficult to remember an Accumulate employee saying “Wow, I love working for this company. I’ll always treasure paying that last gas bill.”

Yes, non-cash rewards work, but there here’s a quick refresher on the things you need to remember to make sure they have the desired impact:

Make it relevant. Make it personal. Understand what makes your people tick. Rewards that create an emotional connection and a positive feeling are going to encourage your employee to repeat the behaviours they were initially recognised for.

There’s a sense of pride and status that comes with being able to show off a reward to your mates that’s the result of a great achievement.  Flaunting a cash bonus doesn’t have quite the same effect.

Provide choice. Remember, not everyone loves a bronze paperweight or a crystal owl. Make sure there’s something to suit all tastes, as different things motivate different people – it could be an iPad, a sky-diving experience, a day off for community volunteering or a study trip.

Make it attainable. Nobody wants to wait until their fifteen year service anniversary to get rewarded.

So put away your wallet; cash isn’t always the answer to getting the best out of your people.

 

Sources:  “Drive: The Surprising Truth About What Motivates Us”; Daniel Pink 2009, Talent Management

Image credit:  Shutterstock