In order to keep employees motivated as well in the company for a long period of time employers needs to give those incentives so that they feel that their work is being seen and properly rewarded and which in turn will motivate to work even better and help the company in achieving its goals. However one question that arises in the mind of the employers is whether to give cash or non cash incentive to the employees.
Cash incentives are those which involve monetary increment or bonus to the employees for their work. While many employees tend to favor the such incentives because it is a direct benefit to them and employee on receiving funds incentive feels satisfied. However that fund is spent by employee almost immediately and after some days they again fell as if they need some incentive in order to motivate them.
Non cash incentives are those incentives which do not involve fund or monetary benefit to the employee. Non cash incentive may be given by the employer to the employee in the form of sending him or her to a foreign trip at the cost of the company, or giving those employee who achieved their targets a trophy for the work done or giving a party in a 5 star hotel to all the employees of the company or it may also include giving away companies merchandise like cups, pens etc..The biggest benefit of non fund incentive is that employees tend to remember it for a long period of time and they fell as if they are a part of company. However one disadvantage of non cash incentive is that some employees tend to treat money only as reward other things as a waste, and therefore they may not be motivated by non cash incentives.
From the above one can see that both fund and non cash incentive have its pros and cons and the employer should decide whether to give fund incentive or non fund incentive on the basis of the employee’s mindset and also policy of the company. An ideal incentive scheme whether cash or non cash will make the employees more motivated towards their work and company and hence should be selected carefully.