Cash vs. non-cash rewards: Which works best?


Ask most employees what motivates them to do a better job, and you’ll probably hear “cold, hard cash.” Not necessarily.

Recent research shows: It’s not actually true.
Despite what people (and HR) may tell you, in certain situations there are better ways to get the results your company wants from its people.

Visa and MasterCard recently did some research on just what gets people moving: cash or non-cash rewards?
Turns out, it’s a combination of the two.

But when times are tight, the last thing you want is to spend on the wrong one.

The key is knowing when to use which:

If you’re trying to reward people for an overall “job well done,” use cash. Overall performance issues are what salary increases and bonuses are for. That’s for the longer-term wins.

If you want to reward a specific behavior or achievement, go for non-cash recognition. Handing an employee $50 for a superior safety track record probably won’t encourage them to keep it up.
That’s because people tend to use cash for bills and other household expenses … and it’s quickly forgotten about.

But an iPod shuffle costs the same amount and is a constant reminder to keep that protective equipment on. (Plus, a tangible gift  brings bragging rights.)

Just remind your Payroll department: Any cash reward – or one with a clear cash equivalent, like gift cards – is taxable to the employee.
Adapted from “Mixing Cash and Noncash Rewards,” by Bridget Mintz Testa, at

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