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Cash is Considered Income

When participants receive cash bonuses or gifts, they subconsciously think “income.” In the case of a cash bonus, recipients will learn to expect it as part of their compensation package, and if they don’t receive a cash bonus the following year, or if the amount is less than the previous year, they feel as if their “salary” was cut. Non-cash programs (i.e., travel, merchandise, gift certificates, stored value cards, etc.) have a beginning, a middle, and an end. The organization has no commitment to run the program forever. When a cash program ends, recipients tend to view it as a pay cut – and that can be devastating to morale, which is the exact opposite of what you’re trying to accomplish with an incentive program.