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Managers
who plan recognition programs often wonder whether they should offer cash
as an award, or tangible incentives such as merchandise, travel, and gift
certificates. Proponents of cash argue that it's easy to administer
and employees can use it for anything they want without the restrictions
placed on other types of awards.
In contrast, proponents of tangible incentives say cash is a poor motivator,
because it has little "trophy value." Most people don't talk about how
much they earn, and the money often ends up being spent on everyday necessities
or paying bills. Cash incentives also quickly become confused with salary
and bonuses, so they can become yet another yearly expectation.
Both cash and tangible rewards can be appropriate in a recognition program,
depending on the company's purpose for distributing the reward. If the
goal is to compensate people for extra performance, cash should be offered.
However, if the goal is to recognize people and express thanks for overall
performance, something tangible like travel should be considered.
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