With all number of bonus schemes set up across the country I wonder, does anyone ever stop and measure the effectiveness of cash bonuses within their organisation? With greater value for money on offer through non-cash rewards do they really incentivise staff to perform in equal measure to their cash counterparts?
A number of studies have been conducted over recent years throughout a variety of American industry sectors that offer some hard facts and figures on the subject. Each time the results came back, non-cash incentives and rewards demonstrated a greater return on investment than their cash alternative, so I thought I’d share these findings with you…
A study conducted for the Goodyear Tire & Rubber Company demonstrated that while the performance of a group of participants rewarded with cash and another group rewarded with tangible incentives improved during the programme, the increase shown by those receiving tangible rewards was nearly 50% more than those of the other group.
The results of a survey conducted by Wirthlin Worldwide of 1,010 people who were asked how they spent their last cash reward, cash incentive or cash bonus highlighted the limited impact of cash incentives:
- Bills 29%
- Do not remember 18%
- Never received cash reward/bonus 15%
- Gifts for family 11%
- Household items 11%
- Savings 11%
- Special personal treat 9%
- Vacation 5%
- Something else 2%
In a survey conducted by AEIS, 17% of the American employees polled said they had received a year-end cash bonus. A full 32% of these respondents admitted that the cash bonus did not improve their work performance.
A recent Incentive Federation survey found that on average, 79% of respondents found non-cash reward programs to be fairly to extremely effective in motivating participants to achieve sales and marketing goals.
According to a study by the International Society of Performance Improvement called “Incentives, Motivation and Workplace Performance: Research and Best Practices,” incentive programmes that are implemented and tracked correctly, in addition to offering tangible awards increase performance by an average of 22%. Team incentives increase performance by as much as 44%.
So is now the time to rethink what you’re doing to drive performance in your organisation?