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Non-cash rewards are not a new concept, and are commonly used to motivate employees, reward them for their performance and encourage specific behaviors.
A recent article by Christopher Guly in the summer edition of the Canadian Professional Sales Association’s Contact magazine explains how everybody would want an extra cash bonus at the end of the year, but that it is likely this bonus would be forgotten a few months later. According to Duane Penner, VP of sales at Roadtrips Inc, incentives tied to memorable experiences can make a bigger difference and set a company apart.
Roadtrips create “once-in-a-lifetime” events for salespeople; from five-star strips to the Monaco Grand Prix to Ferrari driving experiences. I think the key to Roadtrips’ program, is that employees have the choice to choose what they want to do, depending on their performance. One could choose a Broadway show in Vegas, or attend the Super Bowl game – it’s up to them.
I say that choice is key, because we have probably all been in a situation where a well intentioned employer rewarded some employee with something that most people didn’t care about: Participation in a golf tournament for non-golfers, a ski weekend for non-skiers, a gift-certificate in a clothing store to someone who hates to shop, a paper weight with the company’s logo on it, or a weekend retreat in a nice hotel (with 10 other co-workers).
Employers are realizing more and more the potential impact of flexible non-cash rewards. That’s the driver for many sales performance management companies to start offering tools to manage these rewards. Last week, Xactly launched its non-cash rewards application on the Force.com platform. This application spans the entire non-cash reward management spectrum, from creating contests for specific employee groups, to attainment tracking, to online redemption of points.
Other companies such as Restaurant.com leverage this trend by offering discounted gift certificates ($25 certificate for $10 or less) to companies looking at creating non-cash reward incentive programs.
Cash versus Non-Cash Rewards
In most scenarios, it is probably safe to assume that a sales person would not be thrilled to have his or her cash bonus replaced by a points program. However, non-cash rewards could be integrated to their total rewards and I have seen them work very well to reward some subjective “performance” such as embodying corporate values.
Using non-cash rewards should be evaluated on a case-by-case basis – it may be a good decision for some organization or for a certain context, but may not be right for everyone.
Perks versus Rewards
If the goal is to distinguish the company, increase motivation, increase employee retention and attract new talents, other non-cash “incentives” can be used. The company where I had the best time working had many perks for the employees such as free pops and juices and pool tables. Google recognized the importance of such perks, and they are especially famous for their free cafeteria. They could have paid every employee $5,000 more, but their employees probably do not look at it this way.
Non-cash rewards, non-cash rewards programs and applications to manage non-cash rewards are quickly emerging. Now could be a good time to determine if it could be a good enhancement to your compensation plans, to remain an attractive employer and increase your workforce’s productivity and motivation!
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