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Unmotivated by Cash

August 24, 2009

Which type of incentive works best for motivating employees?

The debate between cash and noncash is long standing and relatively subjective. To see results of what works best for some companies, look no further than the Hitchcock Chair Company, located in New Hartford, Connecticut. As described in an article by Diane Cadrain (HRMagazine), the Hitchcock Chair Company emphasizes its usage of a points based rewards system. According to the company’s HR manager Tracy Michaud you should “Never underestimate the power of a ‘thank you.'”

A noncash system does not limit the rewarder to perform recognition based soley on the employee’s effect on the company “bottom line.” Instead, a points-based system can reward employees based on teamwork, work ethic and/or their ability to boost morale in their work environment. Hitchcock uses a rewards system called “You’re A Star” which rewards employees for actions taken in the “spirit of the company.” This reward system also gives employees the opportunity to recognize each other, boosting employee engagement and benefiting the company that much more.

So is noncash rewards the best way to go? It does carry with it a larger perceived trophy value. Points based systems also cost less than cash reward programs and employees do owe taxes on any cash reward received. However, the benefits of noncash are not necessarily universally beneficial. It’s ultimately up to the company to find out which type of incentive program suits their workforce’s needs the best.

What have you found works best for you?  How are you motivated at your workplace?

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