Why do noncash rewards motivate better than cash?
In today's business environment, two types of rewards exist - "sticky" and "slippery." Sticky rewards are memorable or, in other words, they "stick" in the recipient's mind and reinforce the relationship between the reward earner and the reward provider.
Slippery rewards, on the other hand, have a fleeting impact and often "slip" the recipient's mind. Cash - unfortunately for those companies that attempt to motivate employees and distribution partners using this commodity - is the most "slippery" type of reward because it's typically confused with other compensation and therefore forgotten.
That said, let us recap additional reasons why "sticky" noncash rewards motivate individuals to higher levels of performance than "slippery" cash rewards ...
| Noncash rewards have significant "trophy value" | |
| Non Cash Rewards | Cash Rewards |
| Provide tangible symbol of achievement | Intangible … disappear into wallet |
| Provide something physical to show off | Difficult to show off to friends, etc. |
| Provide lasting reminder of achievement | Recipients often can't recall what they purchased with cash reward |
| Are socially acceptable to "brag" about | Boorish to brag about |
| Reinforce association with sponsor company | Minimal association with sponsor company company due to minimal trophy value of reward |
| Noncash rewards fulfill recipient needs | |
| Non Cash Rewards | Cash Rewards |
| Appeal to recipient's need for psychic income (social acceptance, increased self- esteem, self-realization) | Used to satisfy basic needs (car payments, groceries, etc.) |
| Provide guilt-free enjoyment of reward | Participant feels guilty for not spending award on necessities |
| Noncash rewards provide opportunities for effective promotions | |
| Non Cash Rewards | Cash Rewards |
| Provide strong emotional appeal to participants' personal wants and interests | No "warm fuzzies" attached to cold currency |
| Deliver a higher perceived value; actual dollar value becomes secondary | A dollar is a dollar; participant attaches no greater emotional or aspirational value to cash |
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