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Performance Management Reference Materials

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Benefits of Using Nonmonetary Awards

Honorary and informal recognition can be powerful tools to promote organizational and team goals and objectives. Frequently overlooked as options, these forms of nonmonetary recognition can often be more effective than cash awards.

Jerry McAdams, co-author of the American Compensation Association's report, Organizational Performance and Rewards, observes that nonmonetary awards have four major advantages over cash awards. This article discusses those types of awards.

Memory Value

The value of an honorary or informal recognition award, whether it's a plaque, a mug, or a similar item, is longer-lasting than cash since cash is spent and gone, whereas the recognition items remain on employees' desks or in their homes.

Trophy Value

Nonmonetary awards can often be shown to co-workers and friends as a trophy given in appreciation of good work. A check or a bank statement is generally something that employees don't display.

Flexibility

The type of nonmonetary recognition given can be designed to emphasize particular organizational or team goals. For example, a mug or a tee-shirt with the team's logo could be awarded to a team that has accomplished a short-term goal on time. The award recognizes good performance and promotes teamwork.

Cash Awards Cost More

A study of private sector awards found that employers spent less money on nonmonetary awards than cash awards. However, the survey also found that employers reported about the same level of performance improvement with cash and nonmonetary awards and that the awards held approximately the same perceived value.

"Thanks! You Made A Difference" Award

One example of a Federal organization with an active and innovative nonmonetary awards program comes from the Naval Aviation Supply Office (ASO) in Philadelphia, Pennsylvania. ASO's program supports its corporate strategies of employee empowerment and customer service. For instance, they have an award called, "Thanks! You Made a Difference!" This award is given by co-workers recognizing groups or individuals who have gone the extra mile to help others at ASO. The employee being recognized receives a standing ovation from co-workers, a certificate commending his or her performance, a cluster of helium ballons, a photograph of the event, and other small items with the Office logo displayed. ASO also has a Recognition Lottery in which previously recognized employees can win awards, such as a reserved parking spot for 6 months, lunch with the Commanding Officer, having their pictures displayed in a prominent place, or having a hallway named after them.

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