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Non-cash incentives increase job performance through three main factors: justifiability, social utility and organizational commitment.
Justifiability: Non-cash incentives are often items that employees would not purchase for themselves, thus leading to more effort and value for the award winner.
Many employees let the temptation to reward themselves for their hard-work become overrun by thoughts of practicality as they use cash incentives for practical purchases such as groceries or child expenses rather than a true reward. Non-cash incentives fulfill a person’s “want” by rewarding them with a justified, earned and guilt-free vacation that fulfill the “wants” that drive an individual’s motivation and desire.
Social Utility: A non-cash incentive is typically publicized by an executive team, allowing employees to be recognized publicly for their work. Knowledge of this public recognition leads to more effort to qualify for the reward and enhances the value of the reward.
It is proven that employees become happier when their good performance is seen by their peers. Non-cash rewards are often given in a social setting, allowing employees to be recognized in front of their peers. Cash often fails here because of the societal perceptions of bragging about money. However non-cash incentives, such as travel, are perfectly acceptable to point out in public. Colleagues, friends and family often ask about the trip and experience, leading to an in-direct way to discuss an employee’s good performance and company graciousness.
Organizational Commitment: As employees feel more valued by their organization, they reciprocate this behavior with increased affective commitment to the organization.
Many employees see cash rewards as an obligation by the company, often considered as part of compensation. Non-cash incentives, such as travel, feel like a non-obligation, increasing the belief that the company truly values exceptional work and performance.
Travel rewards allow opportunity to create high-quality relationships between colleagues and executive teams. These relationships are often viewed as more social, loyal and mutually beneficial. Branch based services benefit even more from travel, where the immediate manager has the responsibility of how valued employees feel by the entire organization.