My good friend Robert Polk reminds me that studies show that noncash rewards, such as incentive trips, are more effective at increasing performance than giving cash bonuses! One primary reason is that cash does not have the staying power that incentives offer.
When a survey conducted by Wirthlin Worldwide, was given to 1,010 people, their findings showed that people saw cash "rewards" as compensation and spent it on necessities rather than a personal reward. For example, 29 percent of the people spent the money on bills, 18 percent do not remember what they spent it on and 11 percent spent it on household items. Additionally, cash rewards do not reinforce association with the company the same way an incentive trip would, nor does it provide a tangible symbol or lasting reminder of their achievement. Do you remember what you spent your last bonus on?
