Cash is a garbage employee reward. It’s been said, it can’t be unsaid. I can, however, explain why we say that.
Cash is sort of like coal
Cash isn’t scarce, so it isn’t special. I’ll use an example to illustrate. Cast your mind back to the days when coal used to get delivered on a lorry. The coal man comes, and because Mrs Smith found Derek the coal man’s lost dog last week, he gives Mrs Smith some extra lumps of coal for the month.
Do you think Mrs Smith is going to treasure those extra bits of coal? Will she put them up on the mantelpiece, fondly remembering that time Derek Mortimer gave her some extra coal? Or, will she say, “thank you, Derek, that’s very kind” and throw them into the pile with all the other lumps?
We both know it’s the latter, and that’s why cash doesn’t work as a reward. Cash for labour is a pre-existing transaction between you and your staff, and handing out extra cash only dilutes that transaction.
Cash is stressful
One of the single greatest sources of stress for everyone is money. This isn’t limited to low-earning employees either; a healthy glut of people earning above £50k a year find themselves in some financial agony every month.
When you reward exclusively with cash, you’re trying to employ one of the greatest sources of stress in modern life as a reward. And, as we pointed out earlier, we’re terrible at dissociating transaction cash from reward cash.
Non-cash employee rewards become trophies
Not every trophy is actually a trophy. Some trophies are memories of a nice meal, some novelty tea towels, new walking boots, a television or a certificate. Non-cash rewards feel “earned,” and become trophies of achievement.
For example, imagine you use a gift card as an employee reward for making a particularly effective promotional deck that wins new business. They use the card to buy themselves a Bluetooth speaker for their kitchen. A friend is over for dinner and says to your employee, “I like that speaker.”
The difference between a trophy and a cash purchase is how your employee responds to that compliment.
If it’s a trophy, “Thanks, I got it through work for winning us new clients.”
But, if it’s a purchase, “Thanks, got it off Amazon.”
If you want your rewards to be impactful, you want your staff to see their rewards as trophies. Trophies can be traced back to individual achievements, driving home the positive emotions and associating work victories with personal joys.
What actually works for employee rewards
Give your employees choice. Let them pick a reward at a corresponding value to their effort. Maintaining a catalogue of rewards in-house is an absurdly complicated task, so it’s best to outsource the effort.
Gift cards, vouchers or online codes are the easiest way to do that. You can easily reward at a cash-value without having to actually use cash, and employees can choose something that makes them happy.
Their items, or experiences, will be easily compartmentalised into trophies because they were earned through work but not purchased through cash.