Now, I know that everyone really thinks
they want cash as an incentive . . . that’s what most people report. In fact, recently, I had the opportunity to speak at an educational event for the New York Chapter of Site
– The Society for Incentive Travel Excellence. Bob Korin from Hilton Waikoloa Village
and I presented on employee engagement, using some pretty cool new technology from Eventpad
Each audience member had an iPad in front of them to follow along on the presentation and – from time to time – to respond to polling questions. Bob and I asked the audience: What Would You Pick? The options were Cash, Individual Travel Certificates, Award Trip to Hawaii with Colleagues and Company Management, Gift card, or Electronics.
Guess what they chose? Cash. This caused more than a little laughter among this group made up entirely of hospitality and destination professionals working in incentives.
The thing is, people think they want cash because they believe they’ll do whatever they want with it. Go on that vacation ... Or buy some new clothes... Or maybe treat themselves to something indulgent, like one of those new curved TVs or a piece of jewelry. In most people's minds, the funds are spent many times over by the time it’s received.
The problem is that it doesn’t work the way they think it will:
Permission to Indulge
Generally, employees receiving a cash incentive do not give themselves permission for a big treat, if there are bills to be paid. Research shows that most of the time, a cash incentive goes to daily expenses. In fact, it gets lost and forgotten among the day-to-day costs of life. I received a cash gift for my birthday, intended to be used for something special for me – a day at the spa, perhaps. I spent it on summer clothes for my daughter. Was it helpful? Yes. Did it have the residual effect of a special experience? Not so much.
Confusion with Compensation
Cash becomes so mundane that most people cannot remember the exact amount of their bonus or cash award from last year. Instead of recalling, “I made X amount, plus I received that amazing cash award!” most people roll the sums together mentally and see the cash award as part of their annual compensation. This sets up an expectation of the same, year after year, which reduces the effectiveness of an incentive.
While a program winner might gladly go down the hall to tell a colleague that he or she will be going to Aruba on the annual incentive trip, they are not nearly as likely to go down the hall and tell her that they received a check and for how much. It’s simply taboo in most environments to talk about money. Because employees can’t talk about it in anticipation or in celebration, companies giving cash awards lose the opportunity to extend the excitement - both in time and throughout the organization by word of mouth.
Considering that incentive program participants have also been proven to inflate the value of tangible awards, it turns out that cash is not nearly as efficient or effective as experiences or merchandise.
The conversations with our audience at Site New York took an interesting turn. They began telling us about places they had been and things they had been given as an incentive reward. They talked about how special they felt on a President’s Club trip or how much it meant to them that a manager had taken the time to select a gift uniquely for them. The residual effect of the non-monetary room was still working on the audience.
So, even though we could all use a little boost to pay the bills, from time to time, it’s more engaging and more memorable to go on that trip or to select a coveted award with trophy value. And that’s better for the organization and for the recipient. It has a lasting effect that strengthens the bonds between an organization and its people and drives home the values associated with the award.