In today’s competitive business world, employee engagement is directly tied to company performance. While many employers make genuine efforts to improve engagement, they often miss the mark in finding the right balance between rewards, incentives, and recognition.
Let’s break down these terms:
- Reward refers to pay or compensation.
- Incentives are linked to meeting targets.
- Recognition is simply saying “thank you.”
A study from the University of Chicago shows that when given the option, employees often prefer cash rewards. However, this does not mean that cash is always the most effective motivator. While compensation and incentives are expected as part of the employment contract, recognition taps into an employee’s self-esteem and sense of value, especially when delivered publicly. Public recognition becomes a powerful motivator, showcasing the company’s appreciation for loyalty and dedication. It also fosters a sense of fairness, unlocking potential that would otherwise be spent defending against perceived inequities.
Non-cash rewards, such as trips or unique gifts, can have a lasting impact. These are often things employees wouldn’t buy themselves but deeply appreciate when received. Such gestures complement the traditional pay system, adding a layer of genuine thanks and appreciation.
Cash rewards, when simply included in paychecks, often go unnoticed, blending into daily expenses. On the other hand, non-cash awards stand out and create memorable moments. When tailored to an employee’s personal life, these rewards show thoughtfulness and make employees feel valued not just as workers but as people. Many recipients take pride in showcasing their non-cash rewards, whether it’s a trophy, gift, or trip. These moments are shared with family and friends, turning employees into brand ambassadors who proudly tell stories about their experiences.
For companies, thoughtful recognition programs can build a positive reputation—critical in a time when branding and reputation are key assets. Non-cash rewards leave lasting memories, turning employees into loyal storytellers who speak highly of their company.
In conclusion, it’s essential for businesses to carefully craft their recognition and reward programs, even if it requires time, effort, or outside expertise. The impact on employee engagement and company culture is well worth the investment.
Dr. Youssef Lamaa
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