This question is frequently debated by employee recognition program managers and company executives. Is it better to give employees cash as a recognition award, or should non-cash merchandise awards be chosen? Understanding the benefits of each option can help you make the best decision for your organization.
The role of Employee Recognition Awards
To answer this question effectively, consider the true role of recognition: Motivation
While employees often express a preference for cash over merchandise for their recognition awards, research consistently shows that cash is a poor motivator. This is due to its lack of "trophy" and "memory" value.
Employees may not fully understand what drives them to perform better. When cash is given as a recognition award, it tends to be perceived as part of their total compensation. This perception quickly shifts to an expectation, making it challenging to discontinue cash awards without causing dissatisfaction. Cash awards do not stand out in employees' minds as a significant form of recognition for specific achievements.
On the other hand, non-cash awards, such as merchandise, have been shown to be much more effective motivators. These tangible awards carry "trophy" value and create lasting memories, making employees feel truly appreciated and valued.
Why Merchandise Awards Are Superior
for Employee Recognition
Non-Cash Awards Satisfy Wants Over Needs
Merchandise awards fulfill an employee's desires rather than their everyday needs. While cash may be used for essentials like groceries, bills, and gas, non-cash awards are often spent on desired items like a new lawn mower, watch, or TV. Recognizing employees with non-cash awards emphasizes fulfilling personal wishes, leaving the responsibility of needs to the standard compensation plan.
Non-Cash Awards Eliminate Guilt
When employees receive cash awards, they may feel guilty spending it on something they want when there are bills to pay. For instance, justifying the purchase of new golf clubs instead of paying a bill can be difficult. However, with merchandise awards, employees are compelled to use them for their dreams and desires without the option of paying bills, thus eliminating guilt and allowing them to indulge without reservation.
Non-Cash Awards Have Trophy Value
Merchandise awards offer a tangible, demonstrable value. Employees are less likely to boast about cash spent on necessities but take pride in showing off a new TV or set of golf clubs. These awards serve as visible symbols of achievement and provide satisfaction through peer recognition, fulfilling emotional needs.
Non-Cash Awards Hold Memory Value
Think of a special gift you’ve received in the past – one that you still use and remember fondly. You likely recall when you got it, who gave it to you, and how it made you feel. Conversely, few people remember how they spent their last paycheck. Merchandise recognition awards create lasting memories, serving as continual reminders of an employee’s success and the company’s appreciation. These awards symbolize milestones and achievements, reinforcing a positive connection between the employee and the organization.
By focusing on merchandise awards for employee recognition, companies can create more meaningful, memorable, and motivating recognition programs that truly celebrate their employees' contributions and achievements.
If you want your employee recognition awards
to have a lasting effect,
merchandise awards are always better than cash.
Get started today!
Call now to talk to a Recognition Specialist
call 630-954-1287 (M-F, 8:30 am - 5:00 pm CST),
or
Use the form below to request FREE information.
