Cash motivates, toasters create dissent

Motivating workers and managers to improve safety performance through rewards has been a contentious element of safety management processes for decades but no-one seems to have got it right.  Most bonus/award/reward systems are able to be manipulated.  An article in the Harvard Business Review and Australian Financial Review may add another dimension to the discussion by looking at the psychological effects of cash.

Kathleen Vohs undertook research that indicated

“The effect of handling money was quite pronounced—in the four scenarios we tested, the people who handled money reported significantly less pain or social exclusion.”

This may be significant for bank tellers but few others.  However Vohs goes on to say that

“Having money make us feel strong.  Lacking it makes us feel weak.”

Vohs is an associate professor of marketing so motivations and choice are core elements of her studies.  She discusses the marketing implications of the research but says:

“Do you give bonuses to employees? Don’t do direct deposit. It doesn’t have the same psychological heft as a cash bonus.”

“Simply being in the presence of Monopoly money or a screen saver showing pictures of cash made subjects work harder to achieve their goals, even if their tasks were impossible. They were less distracted, more focused, and more productive.”

In Australia most salary is paid through direct debit but in my working life I can remember the satisfaction I received from tearing open a small yellow envelope that contained my salary in cash.  That day the office staff would have a payday lunch at a local restaurant to celebrate.  That sensation, that pleasure in receiving a salary is no longer possible.

The point of this is not to advocate a return to a cash society but to question some of the non-cash reward strategies that many companies apply in relation to increasing productivity or increasing safety performance.

Recently a large Australian company introduced a reward scheme where employees can be awarded points in acknowledgement of effort, results and other actions.  The points can be accumulated and redeemed for a range of gifts.  Many employees asked why monetary rewards were not being offered as they have been in the past?  The implication was that they valued money over toasters, wine or movie tickets.

In this case, the introduction of a scheme that rewards employees in their non-preferred fashion has reduced the credibility of senior management decisions and caused employees to question management’s understanding of the employees’ roles.

Vohs’ research is ongoing and is worth monitoring for its application in the productivity AND safety contexts.  She echoes the interests of many of us when she asks:

“Actually, I love the idea of seeing money’s effect on stress.”

Kevin Jones

Categories business, OHS, psychiatric, research, safety culture, Uncategorized, wellness, workplaceTags , ,

3 thoughts on “Cash motivates, toasters create dissent”

  1. HI.

    Interesting article, but it sure misses one of my observations of work places and the lunch-rooms!

    I have held for years that \”tea-and-buscuit\” h.r. management is sorely overlooked.

    You can give someone a wage rise that gets forgotten about in a few weeks, but fiddle-around with the free tea-and-buscuits and you could have a battle on your hands!!! And which is cheaper?

    Provide folk with a good break-out area – away from the \’battle-ground\’ of daily business for just a short time, and these same folk will regenerate and go back to the fray…

    Oh, and I agree wtih Ross\’ comment re the memorable \’night-out\’…

    Money sometimes make people feel committed to \’using it wisely\’, whereas a simple gift [eg something that is frivolous (the night out we might never shout ourselves to), but hey! it was given to me by my boss so I had to accept it] can have a wonderful inpact…

    All the best! Doug.

  2. A core consideration in this issue is how we VALUE employees and how we communicate this importance to employees.

    Over the years many rewards schemes have been attempted from a position that somehow \”cash\” is unsuitable. This research shows that maybe cash is more effective in some circumstances and should be included in the consideration of workplace reward schemes.

  3. Interesting but in my personal experience I somewhat disagree. You can receive a $5000 bonus and feel a sense of entitlement and forget about it a year later. But if your boss shouts you a $500 night in a flash city hotel with your partner, you remember it for a very long time.

    But the \”toaster option\” doesn\’t strike a good chord. Maybe it\’s the unexpected pleasure factor, as opposed to going to work to earn \”frequent flyer\” points.

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