Merchandise vs. Cash

Ask a sales employee what he or she would like to earn in an incentive program, and you will hear a variety of responses. In general, the majority of answers will fall into one of two categories: merchandise or cash. So how do you choose?

You will rarely find an employee that turns down a cash award. Why would they? But from a corporate view, your question is whether or not cash is the best motivator. Survey after survey says "no."

Research shows there are several reasons why merchandise motivates employees more than cash. For starters, merchandise provides "trophy value," while cash does not. The concept of trophy value is simple. Give an employee a $250 TV and it will sit in his/her living room for 5-10 years. This serves as a constant reminder of what they did to earn the award, and who awarded them. Give your employees $250 in cash and less than 15% of them will use the money to actually purchase an award for themselves.

In fact, in a survey by Potentials Magazine (June 1999), employees were asked what they did with their last cash award. Here are the results:

29% - Pay bills
18% - Don't remember
11% - Bought gifts (for someone else)
11% - Bought household items (groceries, etc.)
11% - Put in savings
  9% - Purchased award for themselves
  5% - Took a vacation

Conclusion: If you want your program to have a lasting effect, then cash is NOT the most effective reward.

Xceleration has the right award options to meet your needs. We offer Merchandise Programs, Custom Events, and Stored Value Card Programs. Together we will design the program and awards that help you exceed your corporate goals and business objectives, while staying within your budget.

Let us design the award program that is right for you. Contact us to get started.