When budgets are tight, what can employers use to motivate staff who see rewards as just another part of their salary? Global rewards strategy expert Derek Irvine examines the world of cash versus non-cash rewards.

As more corporations open and expand operations in worldwide locations, the need to implement relevant multi-cultural programmes continues to increase. While cash recognition schemes may seem like a quick and easy fix, they simply don’t work on their own in today’s global business environment.

A well-executed, strategic recognition programme knows no boundaries, addressing all employees equally worldwide. Today’s successful programmes are defined by objectives and measurable results that recognise employee behaviour based on adherence to the company’s core values with a wide variety of personalised, non-cash reward options.

There are a number of reasons why companies are turning to non-cash recognition programme models over cash. Cash awards can be easily forgotten and are usually frittered away on everyday necessities such as fuel or groceries, not on something memorable and personally meaningful to the recipient.

Most importantly, cash is tied to compensation and becomes perceived as part of the expected remuneration package, a phenomenon called reward inflation. Also, much like how salary discussions are taboo at the dinner table, cash-based bonus conversations are also frowned upon amongst colleagues. However, people are more likely to discuss their non-cash reward with colleagues, spreading the motivational element through your workforce.

Consequently, many global organisations have recognised the value of non-cash rewards and are offering ones that are relevant and personal to each individual, appealing to the multiple generations that characterise today’s workforce – all of whom have different work styles, expectations, performance goals and time needs.

Provide the power of choice

Non-cash rewards in the form of gift cards allowing entry to local, high-value lifestyle facilities like spas or fitness centres take rewards beyond compensation towards trophy status. They can give the recipient guilt-free enjoyment of a high-end luxury item, entertainment event or travel adventure.

These tangible symbols of achievement are lasting reminders and are socially acceptable to show off, reinforcing the value of the recognition programme across the company.

Tie rewards to company values

A recent study by Deloitte and The Economist stated: “Many people find their work pointless and unfulfilling. They show up and do what’s expected but that’s about all. The result is low productivity, low morale, and high turnover. One way to reverse this trend is to actively build and sustain a sense of personal and organisational mission”.

When rewarding employees, regardless of the type of award, be sure to tie the ‘job well done’ to the company value it demonstrates. Strategic recognition programmes reward people for actions and behaviours that reinforce company values and align with the organisation’s strategy and mission.

Recognise frequently and timely

Speed is key for recognising and engaging employees. The recognition moment should closely follow the act being recognised. Frequency of recognition is just as important, especially to Generation X and Y employees who typically seek more feedback, encouragement and recognition.

With more awards given, the programme gains more visibility, creating more recognition moments. This ensures a majority of employees are involved, interacting with each other around the company values and viewing critical company messages through the recognition programme.

Old-school incentives programmes encouraged managers to hold small recognition ceremonies throughout the company where managers presented a staff member with an award. While a public ceremony has value, constraining all recognition moments to such a formal exercise is a practice no longer valued by the younger generations. Delegating the responsibility for this to line managers can also result in damaging discontinuity across the organisation.

Make every reward count

Ensuring that your company is effectively recognising and rewarding its employees is critical to the overall objective of a truly global, strategic recognition programme.

Employees are demotivated by feeling disconnected from the company’s mission and values. Handing them an unmemorable wad of cash or a desk clock emblazoned with the company’s logo that ends up buried in a desk drawer does not accomplish any strategic goals, nor does it improve employee engagement.

At the end of the day, the best form of recognition is one that works. While cash may be easy, it’s not king.

Derek Irvine is vice president of global strategy at rewards specialist Globoforce