Study Confirms Cash Not the Best Employee Motivator

"When used properly, non-cash awards, like merchandise and travel, have indeed proven to be more effective and therefore more efficient than traditional forms of compensation when used properly in a total-rewards mix," said IRF President Melissa Van Dyke.

The belief that cash incentive awards are the most effective employee motivator has been questioned in a new research review conducted by the Incentive Research Foundation (IRF) and the Incentive Federation. Examining a wide variety of studies in various industries, the audit found that non-cash awards can actually capture an employee's imagination better than cash—thereby motivating them to increase performance.

"When used properly, non-cash awards, like merchandise and travel, have indeed proven to be more effective and therefore more efficient than traditional forms of compensation when used properly in a total-rewards mix," said IRF President Melissa Van Dyke. "Our research review showed that non-cash's influence over people can often be more powerful—and as such more profitable—than cash alternatives."

Van Dyke said non-cash incentives such as travel, entertainment, and merchandise, are being increasingly used by businesses as a way to control spending and motivate employees. "It is a real competitive tool in an economy defined by growing austerity," Van Dyke added.

According to Incentive Federation Chairman Karen Renk, it is incumbent on the incentive and recognition community to teach the nuts and bolts of non-cash strategies to business leaders.

"The current business economy is challenging everyone," said Renk. "Like any other business expense, the funding of reward programs attracts intense scrutiny from business leaders looking to slash costs. For that reason the importance of these findings cannot be over stressed: travel and merchandise awards often produce greater bottom-line benefits than other incentive alternatives."

Jeff Broudy, chairman of the IRF board of trustees, concurs. He said such measurable outcomes include increased sales, decreased waste, and reduced absenteeism.

"Tangible awards capture employee attention," Broudy said. "That attention yields better performance and drives several practical business outcomes. The old notion that cash is preferred by employees and is therefore always more impactful is not true. Businesses need to change with the times and their awards strategies must as well."

The full findings outlined in “The State of Tangible Incentive Research: The Use of Tangible Incentives” are available at http://theirf.org/.6079184.html.

Download Center

HTML - No Current Item Deck
  • Get the Ultimate Guide to OSHA Recordkeeping

    OSHA’s Form 300A posting deadline is February 1! Are you prepared? To help answer your key recordkeeping questions, IndustrySafe put together this guide with critical compliance information.

  • Steps to Conduct a JSA

    We've put together a comprehensive step-by-step guide to help you perform a job safety analysis (JSA), which includes a pre-built, JSA checklist and template, steps of a JSA, list of potential job hazards, and an overview of hazard control hierarchy.

  • Everything You Need to Know about Incident investigations

    Need some tips for conducting an incident investigation at work after there’s been an occupational injury or illness, or maybe even a near miss? This guide presents a comprehensive overview of methods of performing incident investigations to lead you through your next steps.

  • Free Safety Management Software Demo

    IndustrySafe Safety Management Software helps organizations to improve safety by providing a comprehensive toolset of software modules to help businesses identify trouble spots; reduce claims, lost days, OSHA fines; and more.

  • Industry Safe
Bulwark CP

OH&S Digital Edition

  • OHS Magazine Digital Edition - October 2020

    October 2020

    Featuring:

    • FACILITY SECURITY
      EHS Compliance: Make it Personal
    • FOOT PROTECTION
      Choosing the Right Safety Shoe for Your Industry
    • HAND PROTECTION
      A Requirements Checklists for Work Safety Gloves
    • COVID-19 MANAGEMENT
      Contemporary Issues in HSE Management
    View This Issue