What Motivates Employees Better Than Cash? A Break.
You know that employees perform best when they are rewarded not only with a suitable paycheck and benefits package but also with additional incentives. Performance and profit-sharing bonuses are common (even to the point of being taken for granted). Although employees rarely give back a check, when it comes to getting them to really lean in, there may be a better way to go.
Recent studies show that employees respond better to noncash rewards and other incentives than they do to an extra injection of moolah. It is, however, a fine line. According to the Journal of Economic Psychology, employees do choose cash over noncash rewards when given the choice in the abstract. But they change their minds when presented with a specific noncash reward. More important, other research suggests that noncash incentives produce a greater measurable boost in productivity than cash does.
Effective Environmental, a Texas-based environmental services company, subscribes to this theory. Every year, Effective Environmental doles out an all-inclusive family vacation to five employees. Managers in each of the company’s divisions submit nominees, and the senior leadership team chooses the winners based primarily on who is deemed to have given maximum effort day in and day out.
Why vacations? Travel, it turns out, may be the most effective incentive of all. According to a study by Site International Foundation and the Incentive Travel Council, 96 percent of employees say they are motivated by travel incentives, and 72 percent who earn the reward say they feel increased loyalty to the company.
Offering travel incentives may also be good for your bottom line -- even before accounting for its effects on productivity. The U.S. Travel Association notes that "in order to achieve the same effect of incentive travel, an employee's total base compensation would need to be increased by 8.5 percent."
Effective Environmental also treats its employees to a generous benefits package, which includes higher-education tuition assistance for employees’ dependents. The company also covers 100 percent of workers’ health care costs. Studies have shown that health insurance not only motivates employees but also plays the single biggest role in attracting new talent.
This article was originally published at The Build Network.