I Got More Money in My Paycheck?

Recognize This: Cash rewards go unnoticed, leaving no impression on employees of your appreciation for their efforts.

To my American friends and colleagues: Did you notice the extra money in your paycheck? According to an article in last week’s Boston Globe newspaper, most didn’t.
“‘What?’ said the professor waiting for a train at South Station. ‘I get extra money?’ asked the mom with her son. ‘I didn’t realize that,’ said the guy getting his shoes shined. Three weeks after a payroll tax cut took effect, few people are noticing the extra money — $40 a week for some, $10 to $30 a week for most — that Congress put in their paychecks.”

As I’ve written many times before, cash rewards do nothing to reinforce the messages you’re trying to send. Employees often don’t even notice it in their paychecks. As one client told us after surveying their 300,000+ employees, of those that even realized they’d received a cash reward, 29% used it to pay bills and 18% didn’t remember how it was spent. Is that what you were hoping to achieve?

Or, as one Globoforce colleague of mine recently related:

“At my last company, I got a $500 bonus directly into my direct deposit account. From the time I left work to the time I arrived home, my wife saw that bonus in the bank account and went shopping with the girls. I never even saw it.”

Do you want your employees to actually notice and value the appreciation you give them? Find another way than cash to recognize them.

2 comment(s):

At February 03, 2011 12:19 PM, Lance said...

Pull it out of payroll and give them a paper check or cash. It seems like such a minor issue. If the problem is truly recognition that they are getting a reward, why not be intentional about it?

At February 03, 2011 5:18 PM, Derek Irvine said...

Hi, Lance. Nice to see you here.

I hear your point, but in 98% of cases, HR will run all rewards through payroll to make compliance with local, regional and national tax law easier. For programs on a global scale, it's more like 100%.

I think I also hear your frustration (reading between the lines here and based on your recent post in TLNT http://www.tlnt.com/2011/01/28/when-it-comes-to-workplace-incentives-just-show-me-the-money/) that you're sick of the catalog crap and forced travel rewards with little bearing on what you actually want and would enjoy.

I couldn't agree with you more. That's why we strongly recommend our world's largest network of gift-card based rewards -- travel to Mexico with your wife? No problem. Disney cruise with the kids? No problem. Very specific piece of jewelry from Paris? No problem. Fly a jet plane, go to the Super Bowl -- it's all possible.

You get the same flexibility as cash, but without any of the *ahem* temptation to spend the cash as you "should" -- e.g., pay down debt, groceries, rent, gas.

We believe rewards should be rewarding, memorable and highly personal.