Do cash incentive plans work for employees?
From it’s a great form of tangible motivation to cash works for increased productivity, here are 8 answers to the question, “Have you ever given your employees cash as part of an incentive plan? What worked well? What didn’t?”
- It’s a Great Form of Tangible Motivation
- Employees Don’t Appreciate Cash As Much
- Cash Works
- It Motivates Them To Do More Good Work
- It works
- Increase Productivity With Cash Incentives
- Likelihood of Being Taxed
- Good Motivator for Targets, but Hard to Track
It’s a Great Form of Tangible Motivation
One of the things I tried was offering cash bonuses as part of an incentive program. It worked quite well with some of the staff, especially those who had a very tangible motivation; seeing money dangled in front of them was a great way to get their attention! Other employees didn’t respond so well, as this type of reward wasn’t as meaningful for them. It turned out that things like additional days off work or small prizes gave them a bigger sense of satisfaction in their role and had better outcomes overall than a financial bonus.
Lorien Strydom, Executive Country Manager, Financer.com
Employees Don’t Appreciate Cash As Much
As an HR consultant, I’ve helped to design many bonus and gift plans. Most of the time, while employees often scream for cash, what they want is a consistent plan for raises and promotions. They can’t rely on bonus programs, but intentional pay increases through a structured, progressive development and performance program can have a greater long-term impact. When it comes to bonus and gift programs (not commissions, to be clear), I’ve found that many employees don’t appreciate the cash as much. This is because they feel obligated to pay off debt or use the funds responsibly, which takes away the fun of it! Research studies have shown that appropriate physical gifts or gift cards for places or experiences, specifically those that tie into a feeling of indulgence, tend to provide a stronger return on investment because it becomes a true treat. So, think beyond cash!
Leslie Egiziano, Human Resources Business Partner, Paychex
Cash Works
As part of a wellness and appreciation initiative, I gave my employees cash as incentives for their achievements in their various departments. Cash was preferred to gifts since the preferences of the staff members differed. Giving out gifts was ineffective in my previous programs since the gifts were appealing to some rather than others. Cash was wholly welcomed since everyone could spend it on what appealed to them. It also made it easier to incentivize the staff since it only required cash transfers, unlike the process that goes into acquiring gifts.
Yongming Song, CEO, Live Poll for Slides
It Motivates Them to Do More Good Work
I have never given my staff cash as an incentive. I have always used a bonus system instead. This helps me keep track of the time and effort that people put into their work, and it helps them feel motivated to do more good work. However, this doesn’t mean that I don’t recognize exceptional performance. I often reward people with cash for meeting their goals or exceeding expectations. And if someone is doing great work, but isn’t getting any sort of recognition on paper or in other ways? Well, then they should feel like they’ve earned a little something extra.
Nathan Hughes, Founder, Art Ignition
It works
I have been on the receiving end of cash incentives at my old day job in customer service for cinemas. The incentive plan worked amazingly well, since my coworkers and I were about to receive almost double our monthly wages as a bonus from this incentive. All we needed to do was to ensure the highest quality of customer service, which was tracked by the rating system. After each call, a message was sent to the callers, asking them to rate the service. The top three best-rated were getting the bonus in the corresponding range: 1st place the highest, with 3rd lowest (but still high). What didn’t work well, though, was the fact that some of the callers were giving the customer service poor ratings based on company issues – website crashes, delayed refunds, and blocked payments. As such, some well-performing employees were unable to get a good rating and a bonus, which was deemed unfair.
Derek Sall, Founder of Life and My Finances and Financial Expert, Life and My Finances
Increase Productivity With Cash Incentives
Creating employee incentive plans is a great way to increase productivity, attract and retain employees, and build company loyalty. I recently decided to try out cash incentives with some team members. Initially, they seemed very appreciative, as they could use the extra money as they saw fit without restrictions compared to receiving store vouchers or bonuses. The downside was that it led to lower-quality work, as the motivation only sometimes lasted past the cash payouts. To fix this problem, I shifted my focus away from the rewards component. Instead, I concentrated on creating dynamic activities and tasks to ensure everyone remained engaged in their duties. This proved effective and allowed me to maintain team morale while achieving our desired goals.
Jamie Irwin, Digital Marketing Executive, Elocker
Likelihood of Being Taxed
We gave our employees cash as part of a wellness/health incentive plan. Each employee would receive $250 if they went and got their annual wellness checkup. It worked great because it gave employees an incentive to get their annual wellness exam if they had been putting it off. However, employees were taxed on this incentive plan and we did receive some negative feedback because they did not receive the full $250.
Lindsey Hight, HR Professional, Renue Commercial
Good Motivator for Targets but Hard to Track
I have implemented cash incentives as part of an incentive plan in my workplace. The primary benefit of offering cash incentives was that it was a straightforward way to reward employees for their hard work and dedication. It allowed me to show my appreciation tangibly, by directly giving them the money they earned. We used it for hitting targets such as getting online reviews from customers, and it worked. At the same time, there were some drawbacks to offering cash incentives. For one, it was difficult to track how much of an impact the cash incentives had on employee motivation. Additionally, not all employees have the same motivations, so a one-size-fits-all approach to rewarding employees may not be effective. Finally, cash incentives can quickly become expensive as wages increase and the number of employees grows.
Mark McShane, Marketing Director, Leeds First Aid Courses
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