Employee Motivation – Why Cash Rewards Don’t Always Work

Employee motivation is one of the mysteries it seems employers are always trying to crack. For those in management positions, finding incentives to encourage higher productivity or a push to meet deadlines can become a fruitless effort if you are offering the wrong sort of incentives.

We take a look at some of the research surrounding employee motivation – throwing cash around isn’t necessarily the way to go, especially if your team members have their sights set on tangible rewards, like sustainable corporate gifts.

Motivation as a theory 

Two of the most widely recognised theories of motivation belong to Frederick Herzberg and Abraham Maslow.

The Educational Resources Information Centre (ERIC) provides us with the summation of these renowned theories – Herzberg concluded that motivation in the work environment came down to five factors, whereas Maslow visualised his hierarchy as a pyramid structure with our base needs for survival at the bottom.

Herzberg’s five motivators include achievement, responsibility, achievement, advancement, and of course, the job itself. These motivators were linked to a long-term impact on performance and job satisfaction.

With regards to Maslow’s ‘hierarchy of needs’, the ERIC informs us that theoretically, an individual wouldn’t proceed to the next level of “higher need” until they had satisfied the present need, a phenomenon named prepotency.

It appears that one of the main issues surrounding motivation is that employees often reach a stumbling block when they try to express what it is they want from a job. This makes it challenging for employers to understand an employee’s personal work goals, leading those in management to often impose on their employees what they believe they want.

More money = more employee motivation?

While there is no question that under the right circumstances, a cash reward or payment is sufficient employee motivation to get a job done, it is not a strategy which will necessarily achieve the results employers are seeking.

In his piece for The New York Times, behavioural psychologist Dr Dan Ariely described his range of motivation studies with an emphasis on the effect of cash rewards or bonuses. Throughout his research, Dr Ariely consistently found that for rewarding menial or purely physical tasks, the bonus scheme worked as expected – the more you pay someone, the faster or better they will get the job done.

However, when the same experiments were conducted with tasks involving what Dr Ariely describes as ‘rudimentary cognitive skill’, being more aligned with the type of work where these incentives are common, it was found that the cash bonus scheme failed.

The higher the cash reward, the worse participants seemed to perform, according to Dr Ariely, who also told Wired magazine that incentivising employees to do more won’t guarantee they do it better.

Cash vs. merchandise

A topic of discussion amongst those in the business of incentives is whether offering merchandise, or tangible rewards is more motivating than cash. In an interview conducted with the Incentive Marketing Association (IMA), sales and marketing manager Anil Vazirani described how his company was using non-cash rewards to recognise the efforts of top performing employees.

“Merchandise gets me going,” says Philip Eldring, one of the employees who directly benefited from Vazirani’s program. “A check isn’t as tangible as merchandise. You can’t really show someone a check; it’s not interesting. When you get money, you just mentally lump it in with your paycheck.”

If you’re interested in changing up the way your business approaches rewards and incentives, Onya offers a range of products which are not only a good choice for gifts, but a good choice for the environment.

Eco-friendly rewards or gifts are not only a good way to show your appreciation for a job well done, they’re also a way to lead by example in creating a greener, less wasteful business environment. For inspiration, take a look at our product pages for corporate sustainable gifts, from coffee cups to drink bottles to customisable bags.