The Latest Incentive Industry Resources & News

Employee Rewards: Is Cash King?

Wednesday, September 28, 2016

Published by: Online Rewards Employee Recognition

Is cash really king? Not so much in the world of employee reward and recognition programs. In fact, studies from The Incentive Research Foundation find that sales incentive and employee reward programs using tangible rewards yield greater results than when cash is used as an employee incentive. Our webinar on Building a Culture of Recognition: Monetary and Non-Monetary Recognition covers this subject in greater detail.

Employee Recognition

Here are just a few reasons why travel experiences, merchandise, or other tangible rewards out-perform cash when it comes to employee reward and recognition program incentives:

  • Merchandise and travel are not easily confused with compensation (it's clear that the employee is being rewarded for going above and beyond)
  • Tangible items in rewards programs offer "trophy value" (gives the recipient something to show while they're telling about their accomplishment at work)
  • Merchandise rewards are perceived at a higher "retail" value
  • They're memorable (cash is often used on gas, groceries, or everyday items)
  • Intentionally selected brand-name merchandise for employee rewards can reinforce the company's or product's brand attributes
  • Tangible employee rewards offer residual value (every time the employee sees or uses the reward, they remember the accomplishment and why they received it)
  • Merchandise offers tax advantages (cash is taxed as compensation; when merchandise is used as an employee incentive or benefit in a defined program, it is taxed more favorably to both the recipient and the company*)
  • Merchandise offers budget flexibility (when budgets are reduced, it's difficult to hide a reduction in cash rewards; it's very possible to reduce budgets when necessary while still offering a meaningful merchandise reward)

Before you consider using cash for employee rewards, try tangible rewards and experiences that increase employee engagement, offer a higher return, and will motivate your employees to perform at higher levels!

*This is not intended to be tax advice. Consult a tax professional for advice when structuring an employee benefits or employee rewards or recognition program.

Employee Rewards: Pizza, Cash, or Compliments?

Wednesday, September 21, 2016

Published by: Online Rewards Employee Recognition

Is motivating your workforce as easy as buying a pizza? This HR Digest article reports that, when offered a choice between cash, pizza, and compliments from the boss, participants in this employee rewards program chose pizza. (Structuring an effective reward and recognition program is a little more complicated than that!) It’s true that, when employees are asked what they would prefer to receive in a rewards program they say cash, yet studies show that employees work harder for non-cash or more tangible incentive rewards.

An Incentive Research Foundation Trend Study outlines new uses for non-cash rewards and finds that a higher level of employee engagement is dependent on the delivery.

Employee Recognition

Does Size Matter?

In fact, it does. The IRF Participant Study of reward experience preferences found that for large corporate recognition rewards, the most preferred experience is a travel reward followed by merchandise, presented by company executives and communicated publicly.

For more frequent smaller rewards, how the reward is presented and who presents it accounts for 40% of the recipient’s view of the reward experience, regardless of the reward itself. So in this scenario, a burger or a gift card might have worked just as well as the pizza if it was presented by a boss and in public.

Incentive or Compensation?

We see from the HR Digest article that even a Wharton professor can confuse an incentive with compensation. A pay raise is compensation; anything that is given in exchange for greater effort or performance is an incentive (such as a compliment, other reward, or pizza!).

Extrinsic vs. Intrinsic Motivation

The article also notes that extrinsic motivators do not have a long-lasting effect. In an effectively designed incentive program, employees often develop better processes, work habits and understanding as to how their job responsibilities fit into the overall organizational goals, resulting in a higher level of intrinsic motivation.

While pizza is not recommended as an effective long-term employee reward, we see that rewards that appeal to your audience, presented in the proper way and in front of peers, can be very effective in the short term. A professionally designed incentive program will achieve both your short- and long-term objectives for employee engagement and performance improvement.


Stop by before 10 am at our Cincinnati office and we'll treat you to one of the finest espressos around.

I would like to receive updates on service offerings, industry news, events and best practices from Online Rewards.



441 Vine Street
Suite 501
Cincinnati, OH 45202
ph (888) 826-0783
fx (214) 242-4448



100 North Central Expressway
Suite 1120
Richardson, TX 75080
ph (888) 826-0783
fx (214) 242-4448

Take a Tour

Interested in seeing how Online Rewards has helped clients create award winning incentive and loyalty marketing programs?

A brief tour with one of our Program Design Consultants will demonstrate how our unique approach helps clients achieve their incentive and loyalty marketing program goals.

 I would like to receive updates on service offerings, industry news, events and best practices from Online Rewards.