Why Tangible Incentives Drive Performance Improvement More Than Cash

Many people believe that monetary incentives are the best way to motivate an individual, but research continues to prove otherwise. In the article ‘Question The Answer: Money Motivates But Tangibles Drive Performance’, the University of Chicago study highlights two interesting facts about monetary incentives.

  1. 78% of the population said they would prefer to receive the cash value of the prize rather than the prize itself, however
  2. The performance of the population was markedly better when the group was in pursuit of the non-cash, tangible incentive, an increase of almost 3 to 1.

One reason for the inconsistency between preference and performance has to do with the justifiability of the award for which participants are working towards. Non-cash, tangible incentives (i.e. merchandise & travel awards) are considered a luxury, a “splurge” that participants have trouble justifying its purchase. When given the ability to earn a merchandise or travel award in exchange for hard work, participants are able to “purchase” this luxury without any feelings of guilt. Thus, people are more likely to expend extra effort since it’s likely to be the only way of obtaining it.

The following articles provide additional reasons for using Tangible Incentives vs. Cash. For additional information, contact an Incentive Services Sales Consultant.

Tangible Incentives Articles

Expressive senior portrait

Question The Answer

SalesForceXP, by Scott Jeffrey, Ph.D.

Right Answer, Wrong Question. As people become more critical to a company’s success, the overall reward package designed to attract, retain and motivate them takes on more significance. Once a company has set a competitive pay scale and created a comprehensive benefits package, the real work begins – keeping employees... Read More
Avoiding The Cash Trap

Avoiding The Cash Trap

Top 10 Reasons Why Cash is Not a Motivator, Incentive Magazine, by William Flanagan

Enlightened managers in all industries understand the benefits.... Read More
The Benefits of Non-Monetary Incentives

The Benefits Of Tangible Non-Monetary Incentives

Four Psychological Processes Tip the Scales in Favor of Tangible, Non-Cash Incentives Forum, by Dr. Scott Jeffrey

There is perhaps no subject debated more frequently by incentive program practitioners and their clients than... Read More

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