Michael Rose, director of Rewards Consulting and former Vice President Reward for the CIPD, believes that while non-cash rewards are not a substitute for pay they can provide more meaningful recognition than money if they are used in a creative way.
Speaking to PM ahead of the Manchester conference, he urged employers to spend some of their bonus money on this type of reward as the benefits could far outweigh the costs.
“The reward items you give to individuals to recognise good work do not need to be high value,” he explained.
“It’s the message that is important here. By recognising best practice or staff behaviours that benefit the organisation with a non-cash reward, like a bottle of champagne, chocolates, or an extra day off work, you are reinforcing the great work that people do. You can let your imagination go. But the critical thing is it does not have to be high value.”
These rewards work best when the item is personalised, Rose said, as it adds value for the individual.
“For example, if you gave a very highly paid employee a bonus of £100 they would be insulted. So how can you incentivise with that amount? To leverage the money, rather than giving them the cash amount you give them a bottle of champagne and the perceived value changes to become much more.
“I’m not saying don’t give people pay or bonuses but there’s something about a tangible reward like that that can become more acceptable than cash.”
According to Rose, employers are doing this more and more. “It’s becoming particularly prevalent as a method of recognition because employers are thinking about what they can do to recognise extra effort even though they have not got much money.”
He highlighted one London council as a prime example of an employer that recognises and rewards staff without blowing its budget.
“Haringey Council don’t give a material reward, they just give staff a certificate. But the message is key here; this employer may not have the money to spend on high value items but they have emphasised the actual recognition with certificates. These rewards are given when a staff member is praised by a customer, so it reinforces positive behaviours. The hotel and service industry also use this from of reward.”
Michael Rose will be speaking on creative non-cash rewards at the CIPD Annual Conference and Exhibition in Manchester on Thursday 10th of November 2011. He is also the author of ‘A Guide to Non-Cash Reward’