For employee recognition, which is better? Cash or Merchandise Awards

April 24th 2017

There is perhaps no subject debated more frequently by employee incentive program managers and their participants, than the question of using either cash or non-cash tangible merchandise as incentive and recognition awards.

First, let’s explore the role of Employee Incentives Awards

While employees may say they prefer cash to merchandise recognition awards, research has repeatedly shown that cash is a very poor motivator due to its lack of “trophy” and “memory” value. Generally, employees don’t really understand what actually motivates them to do something different.

If you are thinking of awards to give employees, remember that when monetary awards are given, employees will perceive the cash to be part of their total compensation package. Once cash awards are started, its very hard to stop as people feel entitled to it, and expect it to continue. These recognition awards for employees will be used to pay for the same things they would normally have paid cash for. They quickly forget that the cash award was part of your employee incentive program.

As a result, the value of cash as recognition awards, such as safety recognition awards, or years of service awards, does not stand out in their minds.

Research and experience clearly indicate that non-cash incentives, in the form of merchandise, are much more successful than money as an incentive award.

Why are non-cash awards better for Recognition Awards?
Here are some very important reasons:

Non-Cash Employee Recognition Awards – satisfy Wants versus Needs. Cash can be spent on everyday Needs (groceries, bills, gasoline, etc.). But non-cash employee awards are used for Wants (such as a new lawn mower, a new watch, a TV, or hotel package, etc.). Satisfying a participant’s Wants is the role of employee incentives; satisfying Needs is the responsibility of compensation (cash).

Non-Cash Awards – Eliminate Guilt. When a bill is due, try justifying the purchase of a new set of graphite golf clubs to your spouse or family members. But if your employee recognition award can not be used to pay bills, you’re forced to spend it on your dreams and desires. Since there is no choice, there is no guilt!

Non-Cash Awards – Are Demonstrable! They have a certain Trophy value. People don’t find much satisfaction in bragging about paying for necessities. But we do take pleasure in showing off our new TV, or a new set of golf clubs. Non-cash awards for employees visible, tangible symbols of our success, and they provide an acceptable and important means for us to satisfy our emotional needs for peer recognition.

Non-Cash Awards – Have Memory Value. Think about a special gift you received in the past, one that you use around the house. Do you remember when you got it? Do you remember who gave it to you, and how you felt when you received it? You probably do. But who remembers where the last paycheck went? Merchandise recognition awards for employees are memorable, and provide a continuous, long-lasting reminder of ones success (or service milestone)…and the efforts that went into achieving it… along with a fond remembrance of the company who gave it to them.

If you want employee recognition
to have a lasting effect,
merchandise awards are always better than cash.

Is a Gift Card a Good Gift?

April 3RD 2016

When you give someone a gift card, you’re essentially putting down the cash to let them buy whatever present they want. It’s definitely one of the easiest gifts you can give, but is it a good one?

Point: The Case For Gift Cards

What do I want for Christmas? I dunno! Peace on earth, etc. So instead of reading tea leaves or forcing a list out of me under duress, do the really thoughtful thing: get me a gift card.

You could argue that a gift card is impersonal, that it’s lazy, that it’s a cop-out. Ridiculous! A gift card is the most personal present there is. It’s the gift of freedom to buy whatever you want, whenever you want it. It’s the gift that says “we’re good enough friends/relatives/acquaintances that we don’t have to force it.” And there’s a certain beauty in that.

What, you got your girlfriend an iPod Touch? That’s something totally unique to her interests? You plumbed the depths of her soul to figure out she wanted it more than anything else in the world? Nah, it’s just a popular doodad! It’s safe, but it’s empty. Gift cards are also safe, sure, but they’re brimming with possibility, and the guarantee that she’ll end up with something she loves.

And it’s not like you’re handing over cold hard cash (which, hey, nothing wrong there, either, but admittedly could seem crass in certain situations). Do you know their favorite restaurant? A gift card beats putting take-out under the tree. Favorite haberdasher? You could get ’em a scarf that they’ll end up exchanging eventually anyway, sure. Or you could let them get what they really want, even if that something’s not even out yet. I like movies! And I’d rather see them in the theater, for free, throughout the year, thanks to that gift card you got me. I’ll pass on that Batman Blu-ray box set (because this one time I mentioned I like Batman but honestly I was just making conversation and really only meant the Michael Keaton ones and besides, honestly, Joel Schumacher should be strung up by the gizzard for what he did to that franchise RIGHT?). And so on.

When we were first talking about this, Kyle described gift cards as “pragmatic.” Please. If anything, they’re sincere. They say: If it’s the thought that counts, I’m counting on you to think for yourself. To make Christmas come when you want it to, not when the calendar says. I respect you that much.

Also they’re, like, a super easy last-minute gift, amIright? —Brian Barrett

Counterpoint: The Case Against Gift Cards

“Every single thing you see is future trash,” explained Robin Nagle, an anthropologist, in a recent interview. “Everything.” And while it’s certainly fine to enjoy whatever future trash you happen to accumulate in the present, giving someone a gift card is basically your way of saying, “here, buy yourself some future trash.”

That’s not to say that stuff can’t be a good gift. An Xbox can be just as thoughtful as a framed photograph, in the right situation. But it’s understanding that situation—the act of recognizing what would make someone happy and then giving them that happiness—that makes gift giving special. It’s what that makes a gift not just a physical thing but something more: a token of your relationship.

I don’t think anyone is unclear about what gift giving should be. It’s not just about the gift but the thought behind it, the idea that someone took time out of their routine to consider you and what you like. And with our time and our attention as scarce as ever, good gifts are all the more memorable. We all have a million things to do, but a good gift recognizes that someone took time out of their busy life to consider what would make your busy life better.

The gift card reduces the act of gift giving to a mere transaction. It’s saying, “I recognize this as an occasion on which I’m supposed to spend time and money on you, but I couldn’t really spare that time, sorry. Here’s the money anyway.”

“But wait,” the chorus of lame gift receivers cries out, “with gift cards we always get exactly what we want!” Sure. But you also get exactly what you want when you go to the mall by yourself on some odd 360 days of the year. And just like if you had picked it up on your own, whatever you decide to buy with that gift card will be exactly what it is and nothing more. A thing. A thing with no relationship invested in it and no memory clinging to it. When it becomes future trash in some landfill, that will be the end of it. It’ll never be remembered.

When you give a good gift, you’re giving something extra along with it. Some feeling, some emotion, some recognition. It’s what makes gift giving special, and it’s something that can never end up in a landfill. —Kyle VanHemert