By Karen Axelton
When it’s time to reward employees at your small business for service above and beyond the call of duty, how do you do it? Do you use cash, gifts or some other form of reward? Writing at Compensation Café, Derek Irvine recently took a look at the difference in effectiveness between cash and gifts as employee rewards.
Irvine comes down firmly on the side of gifts, arguing that a good employee gift is like a good wedding present—memorable and treasured long after the event takes place. Cash, on the other hand, gets “lumped” into the person’s paycheck envelope, gets spent on who-knows-what, and is quickly forgotten. In other words, Irvine says, cash is nothing special.
This article got me thinking about the difference between cash and gifts. When I was an employee, I received both kinds of rewards. For years, I worked at a small business where we would get cash bonuses each Christmas. The bonuses were small, but appreciated nonetheless. One thing that made them stand out is that they weren’t (as Irvine mentions) lumped in with our paychecks. They were given in actual cash and handed to each employee by the company owner. This made it a special occasion—and one that was memorable. Now, whether you chose to spend that cash on “who knows what” or on something special was up to you. I personally made a point of spending the money on special items that I still treasure and that remind me of when I got them (much like wedding gifts).
At a huge corporation I worked for, the experience was totally opposite. We were constantly encouraged to go above and beyond, and when we did, we’d earn points that could be redeemed for gifts out of a big catalog. The problem was, most of the gifts weren’t really anything anyone would want. I still have a saucepan and cake pan I earned at that company, and when I look at or use them, I do remember the job—but not in any pleasant way. I would much rather have received cash and bought something I really wanted.
What’s the lesson here? Whether you’re giving cash or gifts, the secret to making the reward truly rewarding is to get personal.
Personal presents: As a small business owner, you’re in a unique position because you and your key managers are close enough to your employees to know what they’d most like to receive. Maybe it’s baseball tickets for a raving fan, a nice bottle of wine for a gourmet or a gift card to a cosmetics store for your makeup-mad assistant.
Personal cash: Like my former employer did, don’t just add a reward onto the paycheck. Make it special by delivering it with an in-person thank-you.
Personal best: One good option that straddles the line between cash and gift? The gift card. It’s a nice way to give a reward a personal touch, while still giving employees the power to buy what they—not you—would like to receive.
Image by Flickr user susansimon (Creative Commons)
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