Safety Scratch Offs

starperk safety scratchoff

Easy-to-implement program where you distribute scratch off cards worth points toward trips and prizes. Learn More


Online Points Program


Customize your own points program and give employees the ability to redeem points online. Add it as an overlay to any BBS or safety program.

Use Your Money Wisely

Cash rewards may not make the most of your incentive budget

by Jerry McAdams
Incentive Magazine - October 1998



During a speech in Boston several years ago, I asked the audience if anyone had ever received a noncash award. A number of hands went up, and I chose a man who said, "About 20 years ago I earned a clock radio."

"Do you have any idea how much it cost?" I asked.

"Probably about $30," he said.

I was a little surprised that he could remember a $30 item earned 20 years ago.

Becoming more interested in this man's story, I then asked if he remembered how he earned the clock radio.

"I was on a team of engineers at RCA and we came up with an idea to change a screw size in a machine. Our idea saved the company some money, and as a reward they gave us a choice of merchandise from a catalog. I picked the radio."

"Does RCA give you a cash bonus?"

"Well, I left RCA a long time ago, but I've gotten a cash bonus for several years now at my present job."

"Do you remember how much your cash bonus was last year?"


"How about four years ago?"

"Ummm, not exactly, no."

"Do you remember what you did with the cash bonus last year or for any year?"

"I probably paid some bills. Maybe I took my family out for a special dinner. Something like that."

The end of this man's story is not unusual. People always remember the specifics of merchandise and travel rewards better than cash bonuses. And look at what RCA got for it's $30. He remembered the award, the company and what he did to earn it -- more than 20 years later. It would have taken a good deal more than $30 to make all his cash awards memorable.

So is the moral of the story that the best reward choice is a noncash item? It's not that simple. If I had asked this guy what he would've chosen -- a clock radio or $30 cash -- he probably would have selected the money. When employees are surveyed about tangible awards, they consistently choose cash. This is not unexpected. Society's basic medium of exchange is cash. We earn it, spend it, invest it and even use it to keep score. Organizations deal almost exclusively in cash.

So the best reward choice is actually cash? Hold on. When you ask people what is necessary to make them feel motivated and happy at work, money isn't at the top of the list. A fair salary is a given -- and usually cash awards are lumped with such entitlements. Instead, most people prefer full appreciation for work done, being involved and sympathetic help on their personal problems.

Questions about award choices and motivation may sound like different issues, but they aren't. Separating the two is where planners get into trouble. The point of any incentive plan is to reinforce performance improvement and to make people feel valued. It makes sense, then, that the more you can tie a reward to the message "you are valued," the better off you are. This is where cash falters.

Supporting research on this issue appears in People, Performance and Pay, a project I worked on. We found that every time an incentive winner uses his home theater system or a set of golf clubs earned through a program, he is reminded that it was earned for a particular accomplishment. This continual reinforcement, commonly called trophy value, is a quality that a cash bonus does not have. The audience participant in Boston is a perfect example of this.

As organizations expand their thinking on how to design different reward and recognition plans to improve business performance, they also need to expand their award choices. An effective incentive award hooks the recipient on an emotional level, and people have different psychic needs. By using a variety of awards, organizations can meet those differing needs and tap more people's creativity and enthusiasm.

If you can motivate employees with enough cash to accomplish your objectives, cash may be your best options. It is certainly the most common. I am finding, however, that it takes more and more cash to get someone's attention and to motivate them to make a contribution. with noncash award, you have the power of the employee's perceived value of the award, as well as a recognition element cash simply can't deliver.