The Power of Inspiration vs Compensation

For decades, companies have used incentive programs to maximise performance. Our research shows that non-cash, inspirational rewards have many advantages over cash compensation and the impact on sales performance.

Is cash king?

Cash compensation is important; people should feel they receive the compensation they deserve. But when incentivising salespeople to increase performance and baseline results, is cash the best carrot or do inspiring rewards get the job done?

One issue is that cash compensation can be folded into the daily budget and used for routine expenses, such as petrol or the weekly shop. Not a bad thing, of course, but monetary awards often become viewed as part of regular compensation and lead the recipient to expect the same or more cash in the future, an expectation that may not be sustainable.

When recipients receive non-cash rewards, they are more likely to remember the experience associated with the reward, such as a trip or a big-screen TV, than the monetary value of the reward. Non-cash rewards offer a more memorable and impactful experience. People feel great, and they want more.

BI WORLDWIDE recently conducted a sales incentive contest for a leading hard goods manufacturer. The results showed that inspirational awards proved more effective than cash in motivating salesperson behaviour, even when the cash rewards were slightly larger.

This finding supports the view that increased motivational effectiveness should be added to the list of experiences and merchandise award advantages.

Inspirational rewards have many advantages over cash compensation. They provide a more memorable and impactful experience, leading to increased motivational effectiveness - which matters a lot in sales.

So when designing incentive programs, sales leaders should consider the advantages of non-cash rewards and how they can increase employee engagement and performance.