Employee Reward:
Why non-cash can beat cash

We all like to receive presents; there is something about receiving a tangible award that trumps cash. But there are four main reasons for using non-cash awards over cash particularly for recognition and incentive programmes:

  • Differentiation – non-cash awards differentiate a recognition programme from pay. I was consulting with an organization who paid recognition awards through payroll. The managers’ dominant view was that the important part of the process was the pay. The great majority of recipients, on the other hand, said that the most memorable and important part was receiving the letter of thanks recognising what they had done.
  • Memory value – the effect of non-cash awards is longer lasting than cash. It is sometimes said that cash is a motivator for as long as it takes before it is spent. In contrast, every time a non-cash item is used or enjoyed the recipient may remember why and how he or she earned it.
  • Perceived value – the perceived value of a non-cash award can be much higher than the actual cost, so that a non-cash award is valued more highly than cash of the same value. It may be that the organization can source an award much cheaper than the individual could. This may be because they are buying in bulk or can negotiate a better deal with a supplier or through a third party.
  • More personal – a non-cash award can be tailored to the needs and interests of the recipient, showing a greater amount of thought than a simple cash sum would reflect. We only need to think about the difference between receiving a birthday present of a cheque or a really well-chosen gift.

Think for the moment of a highly paid employee. I don’t know what that would mean in your organization, but let’s say on a salary of £250,000. What would happen if you gave someone like that a cash bonus of £150? I have known people on that sort of salary level claim to be insulted with a bonus of £50,000, so £150…? You would never do it. But think about replaying this.

How about if that individual received a hand-written note from the CEO thanking them specifically for something they have done plus a good bottle of champagne? Even grossed up for tax the cost of the champagne is about the same as the £150 we just considered. But the message is entirely different and appreciated.


An extract from Reward Management 2nd edition 2018

Get In Touch Today


+44 (0) 7973 118262

Based in London, UK

Available by appointment only

6 + 5 =