Don’t Give Them What They Want: See Why Tangible Rewards Are Better Than Cash

Motivation Excellence

We hear it all the time.

“Cash is king.”

“Bonuses are better.”

“But my people say they want cash.”

But what if we told you that research shows the exact opposite?

Yes, it’s true. Even though employee after employee will say they prefer cash, research shows people actually work harder (and smarter) for non-cash rewards.

So what’s the deal? Why would people say they want one thing, but turn around and work harder for something else?

There are actually four psychological processes that occur as a person is working for a reward, according to a study by Scott Jeffrey, PhD: Evaluability, separability, justifiability, and social reinforcement.


Let’s say you’re awarding a travel experience. When considering this award, people are likely to consider vivid items such as beautiful beaches, excellent weather, and a relaxing time. While the travel award does have a monetary value, it’s difficult for the employee to set a specific monetary value to the overall experience because let’s be honest: good memories are priceless.


Most people mentally separate their tangible rewards from their paychecks. It’s difficult not to – it’s a completely separate item.

But when giving out a cash bonus, it’s the general tendency for people to put that bonus into a mental account along with their base salary. The bonus no longer stands out and thus loses its impact; most of the time it goes to cover bills.


We’ve all had those items that we’ve lusted after in the store, picking it up and wishing we could take it home, but then setting it back down and walking away because we simply can’t justify the cost.

Many non-cash awards are those types of items – the items we would normally not buy because we can’t bear to spend the money on such a luxury. This causes the participant to view the opportunity to earn the item as a reward for hard work, and not as a violation of standard of justification.

Social Reinforcement

Ah yes, acknowledgement from peers.

We can all agree that it’s pretty awkward to brag about how much money you make. But it’s not quite as uncomfortable to bring up an item you earned. In fact, many times it will just come up in natural conversation, for example, “What are you doing next weekend?” “I’m going golfing with the new clubs I just earned at work!”

Tangible items other than cash have what we like to call trophy value. Something monumental like a killer sound system or a big-screen television will serve as a constant reminder of the hard work that was put in to earn it.

Lastly, when dealing with cash, there’s no hand-to-hand transfer. It’s generally direct deposited (and even if you do give a physical check, that paper check often gets trashed once it’s deposited). The funds become liquid and the giver is forgotten.

But with a non-cash reward, the emotional connection is so much stronger. The participant feels a direct connection from the providing company (you!), and this loyalty is truly priceless.

So when considering your reward structure, think about these four psychological implications. Make your awards special and unique, maximize on social reinforcement, and you’ll gain loyalty to last a lifetime.

If you want more information on setting up a fantastic rewards program,  contact us.

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