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Cash awards: Get the most bang for your buck

by on
in Leaders & Managers,People Management

Motivating employees by giving away money sounds like a sure-fire winner. Dropping $20 here, $50 there as a way to salute exceptional performance sends the right message—right?

Not necessarily. Unless you praise people and recognize their efforts with a verbal pat on the back, throwing money at them won’t pay the same lasting dividends. Gift certificates to hotels and restaurants will get spent, of course, but your employees might still express cynicism about your motives.

Before giving away money or gifts to boost morale, you need to build a bedrock of trust by routinely giving feedback. It’s free and easy, but remarkably few managers do it. Commit to finding at least one person to praise every day, even if you’re just complimenting someone for improving her skills or following directions. Only when you’ve done this for a few months should you start dangling awards.

Also consider the legal repercussions of cash incentives: While it’s fine to bestow prizes to a select group—such as those who win big proposals or pull all-nighters during a crisis—make sure that all workers within a department have the same opportunity to earn them. This ensures that you distribute awards in a nondiscriminatory way.

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