In a BLR webinar entitled ‘Incentive Pay: Best Practices for Designing and Managing Pay-for-Performance Plans’, Dan Kleinman explains why it is important to manage incentive pay plans in the organization and the potential for organizations to have incentives that do not necessarily motivate the employees. However, he further explains that effective incentive management involves picking the incentives that will provide the best level of motivation for the employee and sheds light on cash and non-cash rewards:
- This may be a surprising bit of truth for employers: Cash is not always king when it comes to employee incentives, even during a recession
- Yes, many workers today say they would prefer the extra cash as a bonus but, taxes bite into the value of cash awards in most cases, the money is usually spent quickly on everyday items that do not last, and sometimes your employees may begin viewing cash incentives as almost an entitlement of sorts
- Do not overlook non-cash rewards, which can range from merchandise and gift cards to an extra personal time off day. This may really be more appealing to your workers
Dan Kleinman is the principal of Dan Kleinman Consulting, a California-based compensation and human resource consulting firm. He can be reached at firstname.lastname@example.org.