Why Cash as a Reward Won’t Change Your Culture

Recognize This: How you reward employees is a key indicator of underlying company culture.

We’re often asked why we don’t encourage the use of cash as a reward in strategic employee recognition program. The simple answer is: cash = compensation. Rewards must use a different “currency” than cash or employees will lump your “rewards” into their paycheck, guaranteeing it will become an expectation.

A better question to understand is: What kind of company culture do you want? A culture of appreciation or of compensation?

Your culture is built on the interactions and conversations that happen every moment of every day between your employees. Building that culture begins by encouraging recognition between and by all employees, yes, but it also builds on the rewards employees can enjoy that links the behaviors and actions they were recognized for to the memorable rewards they choose.

When that reward is cash, you can’t – as our client Symantec explained – have a conversation with colleagues, “Oh, I got $500 dollars.”

But when the reward is in a form that gives the flexibility of cash for limitless options, but with a result that employees can share and talk about with each other, you build a culture of appreciation. “Yeah, I went to the spa and had the most relaxing and rejuvenating massage treatment.”

Those are the conversations happening every day in the hallways of Symantec, reinforcing just how much the company values and appreciates the good work their employees do every day.

What kind of culture are you building in your organization?

2 comment(s):

At January 31, 2011 4:27 PM, Drew Hawkins said...

Part of the problem with cash's compensation perspective is that its reward effect is diminished. Employees feel that they need to use that cash for extra bills or stuff around the house etc, instead of treating themselves. The noncash rewards give the employee a real treat for themselves. Much more effective in terms of (the moderately overused term) trophy value.

At January 31, 2011 4:31 PM, Derek Irvine said...

Exactly, Drew, and a very good point. That's the "slipperiness" of cash rewards. Slips right into bank account and right out again. Several surveys have found precisely this: people will fantasize for a moment about what to reward themselves with, but will then say, "But I *SHOULD* make an extra car payment, pay down my electric bill, etc."

Not much rewarding in that.