When an employee receives acknowledgement for a job well-done from management, colleagues or customers, he or she feels good about his or her self. This “Social Reinforcement” is a very important motivator for employee performance, and job satisfaction.
Using non-cash incentives make it more socially acceptable to acknowledge rewards by peers. For example, if Jennifer is awarded a weekend getaway as a bonus for top sales, Monday morning, the whole office will be buzzing asking her if she enjoyed herself. It won’t be office taboo for her to talk about the trip, and won’t be as uncomfortable as if someone were to ask her about a cash incentive like a salary increase.
Incentives that are not expendable like cash, dinners or vacations, also serve as reminders to the recipient about his or her performance. Items that are useful such as televisions, mp3 players, dinnerware or sporting equipment are good examples that provide “trophy value.”
Trophy-like awards also encourage family and friends to give positive reinforcement. Things that the family can enjoy or friends can see. On the other hand, cash awards are likely to be spent on what the recipient would normally purchase anyway. Others are less likely to make the connection between a cash reward and the resulting item.
