Non-Cash Ways to Compensate Employees

Here is an easy to win points with your company or clients by helping them to keep up employee morale–and productivity– without breaking the bank.

Non-cash acknowledgements show that you appreciate employees’ efforts, inspires employees to try even harder, improves productivity, increases job satisfaction, and creates a willingness to go that extra mile.

Yet, a non-cash award system generally costs one-third of what cash awards cost.

Categories of non-cash rewards include:
• Recognition, possibly in front of other employees
• Increased status
• Merchandise
• Travel

Specific rewards that are popular include:
• Tuition credits or a free course
• Shares of stock
• Consumer merchandise
• Flexible working hours
• Paid time off

The advantages of non-cash awards over cash include:

Long-term impact. Awards that employees can carry around, use over time or enjoy with their families will be remembered far longer than cash (which is generally forgotten as soon as it’s spent).

Recognition among friends. How many chances does an employee get to say to family or friends, “I got this TV [VCR, ipod, etc.] at work because they think I did a great job.” Employees can say that they got a check, but it does not have the impact of a visual form of recognition.

Flexibility. It’s easier to control the impact shelf-life of awards other than cash.

Non-cash rewards can also be given more promptly than cash–and the sooner reinforcement is given, the greater its impact on employees. Even where cash is as effective, non-cash rewards generally cost a third as much.

Best strategy: Decide when cash awards will have the greatest impact and what you want to give them for–and use non-cash awards for everything else.