In the wake of the tax cut legislation introduced by the current administration, some companies have rushed to provide one-time cash bonuses to employees. And those bonuses have been a long time coming. Many people are working longer hours than ever, in a market which has seen wages stagnate. And while people may argue that times are tough, that’s not the case in every sector. Add to that the fact that we’re in an employee’s job market and the case for well thought out rewards is made. This post is about reasons why companies should use non-cash rewards for bonuses, instead of falling back on a one-time windfall. At Incentive Travel Group, we know this style of recognition works because it’s what we do. It’s a measurable strategy which increases employee engagement and boosts retention rates.
Money is nice. We all like money. We can do things with money we’re unable to do without it. But when it’s gone, it’s gone. It’s forgotten. Employees receiving a cash bonus are unlikely to spend it on something fun. They’re much more likely to pay off some outstanding debt or buy the kids new shoes. These things are needed but they’re not thrilling. You see the problem. When a non-cash bonus is used, whether that’s points toward travel, or a travel incentive, employees remember it. They feel they’ve been given something precious that they wouldn’t normally buy for themselves but that they’ll genuinely enjoy. That’s probably why 2/3rds of workers prefer non-cash bonuses – another reason to embrace them.
We’ve mentioned companies using their new tax cuts to give one-time bonuses. But there are companies out there who routinely reward employees with cash. That’s a mistake. Once the habit is put in place, when times are leaner and bonuses are not forthcoming, you’re basically fomenting revolution. Employees become accustomed to the reward and thus, expect it on the regular. And that doesn’t motivate anyone. With non-cash rewards, which should be tied to performance and workplace behaviors to be effective, employees are given a brass ring to reach for. They’re given the opportunity to show you what they’ve got and that’s enlivening. When employees know that there is a program in place which will reward them for clearly defined productivity goals and modeling engagement that makes a difference to the company, they’ll be more likely to grow as team members and that benefits all stakeholders. Cash rewards have the psychological effect of convincing workers that the money is forthcoming, regardless of what they do. With non-cash bonuses, the opposite is true. There’s a consciousness that performance is directly tied to the reward, encouraging employees to put their back into their work. Non-cash rewards have the effect of killing complacency and nurturing engagement.
For more than 2 decades, ITG has been supporting companies like yours with targeted employee recognition programs and tailored travel incentives. If you’re in the market for the silver bullet to employee engagement and retention, we should talk. Contact us.