Best way for employee satisfaction? It is not cash, finds study

According to a survey conducted in the US, over 80% of companies spend over USD 90 billion annually on employee rewards

Best way for employee satisfaction? It is not cash, finds study
The researchers concluded that managers should consider implementing these four attributes in their reward programs

Not the inhand remuneration or cash, employees are more likely to feel valued and motivated by tangible rewards that they’re easy to use and are distinct from their salary. These tangible rewards are pleasurable and come as a surprise for employees. According to a survey conducted in the US, over 80% of companies spend over USD 90 billion annually on employee rewards. These include gift cards, travel, and merchandise.

A study conducted by Adam Presslee of the University of Waterloo revealed that there is conflicting evidence regarding the effectiveness of cash and tangible rewards. He said it is puzzling that many companies go to such lengths to reward their employees with cash when there is evidence that tangible rewards can be more effective.

Presslee and his co-author Willie Choi, looked into the various factors that influence the preference between tangible and cash rewards. The researchers were able to identify the four characteristics that make a reward unique and effective. These include the novelty of the reward, the ease of use, the hedonic nature of the reward, and the presentation.

Adam Presslee of the University’s School of Finance and Accounting revealed that there is conflicting evidence regarding the effectiveness of cash and tangible rewards. He said it is puzzling that many companies go to such lengths to reward their employees with cash when there is evidence that tangible rewards can be more effective.

The main idea of the study is to identify the various attributes that influence employee performance and motivation. The lead author said that these are the elements that make a reward unique and effective. The results of the study revealed that each of these attributes can increase employee effort and performance.

The researchers concluded that managers should consider implementing these four attributes in their reward programs to increase employee motivation and performance.

The study revealed that employees are more likely to feel motivated by their tangible rewards if they are perceived as distinct from their salary. Presslee said that this is the reason why many companies implement reward programs that emphasize the distinctiveness of their rewards.

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