We want to offer our employees great benefits that make them feel appreciated for working hard. We want them to feel like they are being Should employees who work harder get bonuses? If so, how should bonuses be determined? Is there any benefit to not giving cash rewards?
-- Benefits Manager
Dear Benefits Manager,
Your employees are hard at work. Every so often, a few standout employees complete a huge task or accomplish a goal. It can be easy to assume that giving these employees a cash bonus is enough to make them feel good while also showing other employees that hard work pays off.
While cash incentives and salary raises have their place as employee benefits, I encourage you to explore other reward options and determine if any of them might be better for recognizing employees working and achieving things at every level of the company.
You already know that recognition plays a big role in motivating employees and boosting work performance. But, if you haven’t already looked into it, you may not know there is data to support that non-cash rewards outperform cash rewards. According to a new study by the Incentive Research Foundation (IRF), recognizing employees through non-cash rewards fosters feelings of appreciation, pride, and creates memories. Cash rewards get bundled in with the employee’s paycheck and can go unnoticed by those with direct deposit. Non-cash rewards make employees feel special.
Most cash bonuses are distributed based on the employee reaching pre-determined sales goals or production numbers. Usually, these goals are lofty and require hours of work that goes unnoticed. Non-cash rewards can be given as case-by-case recognition. Different levels of rewards can be given for different levels of employee achievement as they work towards their loftier goals.
This is important if you want to keep your employees feeling upbeat and positive about the work they are doing every day. Tangible, non-cash, rewards lead to greater perseverance at work. If employees are rewarded for accomplishments along the way, they are more likely to feel more engaged with their work and less frustrated or discontent.
Companies wanting to reward hard-working employees might consider introducing a formal recognition program as part of their employee benefits. These programs help companies incorporate non-cash incentives, experiences, and other rewards into their everyday methods of recognizing employees. Not only do these programs allow for more memorable recognition opportunities, but they also help to improve overall employee engagement and motivation. According to the IRF study, companies with reward programs saw a 22% gain in performance compared to organizations with no reward program.
So to answer your questions, yes, employees should be incentivized and rewarded for their hard work. Cash bonuses can be utilized, but non-cash rewards offer a more meaningful recognition than money that is likely to fade into the monthly bill-cycle. Non-cash rewards can be given at any time for any level of work that deserves recognition. Because of the staying power of non-cash rewards, employees are more likely to feel appreciated by and want to stay with your company.
Let me know if you want more information about recognition programs!