Whenever we think about reward schemes whether it be recognition, long service awards or channel sales incentives, you can guarantee that at some point in the set up process the question will be asked around what reward to provide. Whether to offer tangible rewards or cash, which is best and what are the differences? Does the end reward have an effect on the campaigns success? We always aim to find the best solution for any company to fit the requirements, however in our experience we would suggest that tangible rewards should always be the preferred option.
So what are tangible rewards?
HRZone.com defines them as ‘financial rewards or non-financial rewards that can easily be assigned a financial value’ this summarises them perfectly. In terms of products it could be anything from an iPad to a driving day or a gym membership to a gift card, all of these have their own value that the recipient can apply to it. That is not to say that the value has to be financial, so not every recipient will immediately associate a bottle of Moet & Chandon champagne with a high price tag; the value is the intrinsic feeling the recipient gets after being given the reward. Bearing this in mind, the reward needs to be of a perceived value equal to the input from the recipient to ensure that the recipient gets a feeling of worth. There is a fine line between not limiting your budget and not giving a product of value. For example, if you have an employee of 20 years service you would do more damage than good to give them a watch worth £20 as a long service award as they would feel undervalued for their contribution.
Benefits of tangible rewards
First of all as mentioned the value of an item, this can be hidden in some respects, so you can provide some great reward options that recipients can see value (both financially and intrinsically) in and get a real positive feeling upon receipt without blowing your budget. Secondly ongoing engagement, if there is a physical product of some description to work towards then this can increase the level of engagement from your employees, by giving them a fixed point to work towards there are clear goal posts but they also then have something to show for it at the end. Finally the flexibility, by offering tangible rewards you have the ability to be as flexible as you wish, you may want to offer a whole host of rewards so that you have catered to everyone’s needs, or if you know your recipients then you can devise a really concise range of products that taps into their key motivators and ensures they receive something they want.
Cash incentives for ‘quick wins’
Having said the above I can’t say that cash as a reward doesn’t have its benefits, especially in times like this where no matter what financial reports may say people are still money conscious. Giving cash as a reward or using it as an incentive can give ‘quick wins’ to people and they can quite clearly see the value of their contribution, whether gained through sales or effort at work. Cash gives people the flexibility to use their reward how they see fit, so they can get something of real value to themselves. However, with cash it will only ever be seen as a quick reward and will be quite quickly forgotten about so this isn’t a great solution for ongoing engagement in a programme or with the company.
Engage and energise employees
My advice would be to first of all think about why you are rewarding in the first place, if you want a quick turnaround reward or quick engagement from employees the cash will get people attention, bear in mind this probably won’t last for long so ensure the value is enough to make then do what you want them to. If you feel uneasy about giving cash you could reward with gift cards, this way they will be getting a product with the money rather than risking it disappearing into bank accounts and inevitably bills! IF you are looking for an ongoing reward option and you really want to engage and energise your employees then look to tangible rewards, there are some great products and services out there that people will really connect with and if they can get them via doing their job then they will immediately see it as a tool and something to aim towards.
To conclude I think there are 4 key questions to ask when considering tangible rewards or cash.
1. Why am I rewarding?
2. Who am I rewarding?
3. What is the timescale?
4. What is my budget?
By sticking to these you can ascertain who your audience is, why you are rewarding them and inevitably how much you can afford to reward them.