Understand The Difference Between Cash And Customer Incentives

There have been several studies over the past thirty years that attempt to discern if non-monetary incentives provide increased performance rates in the workplace over monetary incentives. Each study shows different results, largely depending on how the data was obtained. What all of the statistics reduce to is, understanding the differences between cash and gift incentives, and applying an appropriate incentive scheme for the employer’s specific employees. There are three areas that need to be evaluated before an employer decides to utilize cash or gift incentives to remunerate an extraordinary work performance. The areas employers need to evaluate are employee preference, work performance after receiving an incentive, and the positive or negative effect the incentive has on other employees. Understanding the effect of properly

Personal preference is a discriminator between which incentives package an employee may want to receive for their work, above and beyond their normally assigned duties. The psychology of receiving cash or gifts comes into play. In particular, employees report a preference for cash incentives when given an explicit choice between the two. A huge factor to this is fungibility, or the ability to substitute goods. In our modern economy cash represents the most fungible item and gifts may or may not retain any fungible value (Shaffer and Arkes, 2009). People appreciate cash because they can use it where, and how they want. Furthermore, most people do not receive a gift, and automatically think of the resale value. In addition, employees may not want to burden their company by receiving a gift that the receiver does not want or