Why employees don't always want hard cash

WM Circle Logo

By: Wise Marketer Staff |

Posted on July 19, 2002

Every year, US businesses spend more than US$25 billion to motivate salespeople to sell, customers to buy, and employees to work more effectively, according to the Incentive Federation. Although mostly cash, there may be better alternatives, according the Gift Certificate Center.

"Cash incentives tend to be looked at as something employees are due," explained Erika Perrault, senior vice president of sales and marketing at Gift Certificate Center. "But a DVD player, airline tickets, or a restaurant dinner are things that employees remember and can visualise."

And, according to Perrault, when employees can visualise their reward they tend to work harder to achieve it. Although cash could be used to buy those rewards, it usually ends up being spent on bills and other short term needs - which limits the value of a cash incentive.

Trophy value
Incentive programme rewards should have a trophy value. Employees may be reluctant to talk about cash rewards they have received but they have no problem talking about being rewarded with a new stereo system. Other benefits of non-cash incentives are:

  • Non-cash awards avoid the pricing or compensation and tax issues raised by the use of cash.
  • Inexpensive gifts have more impact than the cash equivalent when you have a limited budget.
  • When implementing a larger programme there may be discounts available with non-cash awards, where there are none with cash.
  • Non-cash incentives are extremely affordable and effective, typically costing between 3% and 5% of participants' annual salaries, whereas a cash programme can average 5% to 15%.

The Gift Certificate Center's own Premiere Choice Award gift certificates allow recipients to redeem rewards at over 400 US retailers, restaurants, travel and entertainment providers. Such an approach to incentives at least guarantees that recipients can get something they really want - which means that they are more likely to want to repeat the experience as often as possible.

More Info: