The limits of cash rewards

November 07, 2012
The limits of cash rewards

In recognition and rewards, money doesn’t speak louder than words. Simply put, money is what you give employees for the work you hired them to do. It’s for the everyday tasks and performing them at an excellent level. If you hired great talent, you expect them to be great daily — that’s what made them better than the other applicants. If the negotiation process was handled skillfully, the compensation package for your hires should be enough to motivate them to be their best.

On the other hand, if your employees feel that they are not being properly valued on a daily basis, you’ve run into big trouble. Any bonus you give won’t make up for what one compensation guru calls a “fundamental imbalance at the core of [the] employee exchange.” Your best, most thoughtful feedback, praise and appreciation could be undermined by your employees’ skepticism.

Cash bonuses can bring these problems into focus. Derek Irvine, a recognition experts says, “Cash does not motivate, it does not recognize, it does not appreciate. Cash compensates. Pure and simple.”

On the other hand, gifts and rewards bolster the presentations and thanks you give. As well, they don’t carry the complicated costs (read: taxes) to you and your employees of cash awards. In fact, gift awards are deductible as a business expense.

And in the end, you want to gift something that has an emotional impact, something that’s as lasting as the service an employee brings to a company. A small cash reward can be spent on things they need—gas, food, shampoo!—and will be quickly forgotten. Get better return on your investment with a tangible reward. Corporate gifting gives staff tangible symbols of achievement, and is a lasting reminder and motivator of good work.

http://www.tlnt.com/2012/10/11/peer-to-peer-recognition-it-only-works-if-you-also-have-real-rewards/#more-65939

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