Rewarding employees for doing a good job is pretty much standard procedure for almost any company. Whether it’s for incentivizing consistency in performance or being able to go above and beyond, providing the right incentives can go a long way in keeping employees happy and loyal to the company. Organizations can choose to offer cash incentives or non-cash incentives, but which option would work best for you and your staff?
Contrary to popular belief, throwing cash at something (or in this case, at someone) doesn’t always work. While cash incentives still remain desired by many employees, non-cash rewards can sometimes be more effective at motivating employees to go the extra mile. If you’re looking for a good way to effectively incentivize good employee performance, you have to take the right approach.
Plan with the Right Tools
Regardless of the kind of incentive you want for your employees, you’d need a way to properly implement them. Having a powerful incentives management software that accurately defines and tracks relevant metrics for each incentive not only makes it easier for you to reward employees, you also get to tell your employees what exactly warrants the new incentives.
A good incentive software can also help you come up with better incentives programs using direct input from employees and managers. Surveys for hearing out employee feedback, quizzes for skill/knowledge checks, and gamified campaigns to promote employee engagement can be created quickly and easily. These will help you gather data that can further be used to come up with the most appropriate incentives solutions given your company and staff’s specific needs.
Once you get your hands on the right tools, the next thing to consider is your incentives options: cash and non-cash incentives. Knowing the advantages and drawbacks of either option can go a long way in choosing the best incentives for your staff.
Cash Incentives – Pros and Cons
The more well-known type of incentive, cash incentives can come in many forms. They can either be added directly to an employee’s payroll, handed out as cash or check, and even added in increments or all at once. The value of the incentive can easily be measured since more challenging requirements typically warrant greater rewards.
The biggest reason why employees would want cash-based incentives is flexibility. Once your employee gets the incentive, they can use it any way they want. Meanwhile, it’s also an easy option for the employer because there’s no need to choose an appropriate incentive in kind. Cash-based incentives are also easier to give out to the employees because they can be added straight to the employee’s bank account.
On the other hand, cash-based incentives only provide a temporary reward since it’s bound to be used up, and smaller incentives are spent even much faster. As a case in point, many employees tend to use their cash incentives to pay for basic utilities and other daily necessities. Moreover, there’s little bragging rights for employees receiving cash incentives, in general.
Non-cash Incentives – Pros and Cons
Non-cash incentives can be anything that’s not cash: trophies, certificates, flight tickets to a nice holiday destination, and even persistent job perks. According to studies, a significant percentage of managers believe that non-cash incentives are more effective. But why is this the case?
The biggest advantage of cash-based incentives over cash is trophy value. To put things into perspective, just think of it this way: being proud of a trophy is a lot more memorable and relatable than possessing say, 100 dollars. Also, since a non-cash incentive is more like a gift, it’s also better at showing your employees that you care about them.
While this may tempt you to go exclusively for non-cash incentives, you have to remember that some non-cash rewards might not be exactly what an employee will find appropriate for their efforts. To prevent this from happening, it might help if you and your employees can establish a rewards wish list right from the start. Your incentives management software tools will also come in handy when it comes to setting up an incentives management program that is a win-win for all.
Incentives should not be given out without much thought. Using the right tools and taking the proper approach to choosing the correct incentives will help you keep your employees engaged with little or no trouble.