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Do Employees Actually Want Cash Incentives?

Dec 13, 2014

Are we more motivated and inspired by a gift that gives us pleasure than we are by cold hard cash and, if so, can we use this insight to engage our sales force?

Secret to Motivate a Sales Force 

Overview

This article sets out to determine which is the better motivator for employees - cold, hard cash or a gift that they want, but wouldn't typically purchase for themselves.

In 2009, Victoria Shaffer, Ph. D, and Hal Arkes, Ph. D, published an impressive academic study on employee motivation and rewards. Their research proved this: although employees say they want cash incentives, they are actually motivated more effectively by non-cash incentivesTheir study showed that employees would work harder to earn a reward such as concert tickets or a new computer than cash.

We decided to put their study to the test, in this case with a focus on sales associates in a distribution channel during a two-month sales incentive.

In the first part of the study, we asked one group to rate cash and non-cash incentives in terms of what they would prefer. By a two-to-one margin, study participants told us they would, if given the option, choose cash over a non-cash reward.

But here's where our research gets interesting. In the second part of the study (with a different group of participants), cash and non-cash reward options were looked at separately rather than comparatively. Participants were given one reward option and were asked to rate it in terms of their engagement level, or how hard they would work to achieve it.

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