Non-cash incentives

Why the something beats the money

A cash reward is fungible, which sounds like an advantage and works against it. £50 arrives in the payroll, merges with the salary and is spent on the same things as the rest. Within a month the recipient cannot say what it bought. A cookery class, an afternoon off or a tree with their name on it does not merge with anything. It is a discrete event that can be remembered and described, and describing it to a partner or a friend is part of the value.

There is a second effect, covered on the intrinsic and extrinsic motivation page. Cash attached to work tends to reframe the work as paid, and paid work stops when the pay stops. A non-cash gesture is less easily read as a price, so it does less damage to the reasons people had for doing the work in the first place. This is the argument behind the 65% figure, and behind most of the creative ideas on this site.

The main types, and what each says

Time. An afternoon off, a long weekend after a launch, a later start for a week. Says: we know what this cost you. The most universally valued and the least often used, because it has to be granted by somebody with authority.

Experiences. A class, a meal or a ticket, ideally chosen for the person. Says: somebody thought about you in particular. Fails when it comes from a catalogue nobody chose.

Development. A course, a conference, mentoring or a stretch project. Says: we expect you to be here in two years. The most under-used, and the one that best serves both parties.

Symbolic gifts. A book with an inscription, a handwritten card or a tree planted in the recipient’s name. Says: this is a marker, and the meaning is in the gesture rather than the object. Evergreen’s model, where three seeds received plant one real tree, is a symbolic incentive by design: the tree cannot be spent or traded, and it leaves something behind.

Public credit. A mention at the all-hands, a named thank you in the company channel. Says: this was seen. Costs nothing and is a non-cash incentive in the strictest sense, and is covered on the social recognition page.

Where they go wrong

Genericness is the main failure. The same branded mug for everyone is a non-cash incentive that says nothing, and it is read correctly as a budget line. The choice has to be for the person, or by the person.

The second failure is substitution. Non-cash incentives on top of fair pay are recognition. Non-cash incentives instead of fair pay are noticed as such, and resented. The 65% preference holds when the money question is settled; it does not mean staff would trade salary for experiences.

Choosing

Ask what the reward should say, then pick the type that says it. Time for sacrifice. Development for potential. An experience for a person you know well. A symbol for a moment worth marking. And in every case, a sentence explaining what it is for, because the sentence is the recognition and the reward is the envelope it arrived in.