How to motivate your staff with non-cash rewards

To motivate staff to produce ‘great work’, many organisations will provide cash rewards – a 5% pay rise or a bonus, for example. But do such incentives actually achieve the desired results? Our research suggests not. In fact, evidence points to non-cash rewards leading to greater levels of engagement and motivation. So, why is this and how do you most effectively motivate staff without using cash?

The easy cash reward

A cash reward is often seen as the solution to employee engagement, used to encourage staff to go the extra mile. Cash is a tangible reward and requires very little effort on the part of the organisation, which is why it’s such a popular ‘all round’ solution.

However, according to research by the Cicero Group, commissioned by the O.C. Tanner Institute, only 7% of employees said that a pay increase would be highly effective at getting them to produce ‘great work’. In fact, the research highlights that the most important driver of great work is recognition. More than a third (37%) of respondents said that recognition was the “most important thing their manager or company does (or could do) that would cause them to produce great work”.

So why is this? It’s simple – a cash reward is fleeting and impersonal. It’s a short-term “thank you” which doesn’t automatically lead to an ongoing feeling of being valued and appreciated by the organisation. When the ‘golden glow’ of the cash reward has faded, employee engagement will most likely return to pre-reward levels. If the reward means something to the recipient, however, and makes them feel valued and special, this will naturally lead to greater engagement over a longer period of time.

Rewards with meaning

A reward with meaning is a gift that’s highly valued by the recipient, continually reminding them that they’re appreciated. This could be a service anniversary lapel pin or a plaque for outstanding achievements. It might even be a reward that costs very little but is received just as favourably, such as a certificate presented in front of managers and peers.

Although the nature of the reward is important, the delivery of it is even more important as it can mean the difference between an employee feeling highly appreciated and one who feels let down and taken for granted. In fact, according to our Global Culture Report, 40% of employees feel that the recognition they receive at work is an empty gesture.

So, how do you deliver reward and recognition in a way that motivates and engages? Here are some key pointers.

Make an effort

Ensure time is put aside for reward and recognition, making it deliberate and thought through. When a "thank you" is deliberate and considered, employees will feel 116% more appreciated (Global Culture Report).

Make it personal

Giving a generic "thank you" to a group of people can make the experience unmemorable, which is why it’s important to make appreciation personal and sincere. Give people praise as individuals, highlighting what they have specifically contributed and why it’s important.

Recognise effort regularly

Leaving praise to the annual review will allow disengagement and resentment to fester. It's therefore key to provide recognition and reward on a regular basis, ideally daily.

Tailor the reward moment to the individual

If the employee likes a big ‘fanfare’ then give recognition in front of managers, peers and even family to make the moment more special. If the employee would be uncomfortable with such a public ‘show’, appreciation should be provided in a quieter, more private way. The key is to make it an enjoyable rather than an awkward experience.

Link recognition/reward to company values

It’s key for employees to understand how their behaviour links with the organisation’s values, whether it’s excellent customer service or innovation, for example. This recognition-values link ensures employees realise that they are part of a big, united team. Plus, by recognising the ‘right’ employee behaviours, they are more likely to be repeated again and again.

Time to re-think cash rewards

Cash rewards do have their place, but it’s important for employers to realise that non-cash rewards can be an even greater motivator when they’re linked with meaning. And by personalising the employee experience surrounding the recognition moment, ensuring the individual feels valued and appreciated, this can be a great motivator, building loyalty, reducing staff turnover and inspiring great work.

The author is Robert Ordever, managing director of O.C. Tanner Europe.

This article is provided by O.C. Tanner Europe.