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Incentives Rule Everything Around Me [EVENT RECAP]
Morgan Chaney
May 4, 2018

The U.S. invests hundreds of billions of dollars into employee incentives annually, but according to research, 77% of transaction-based programs will fail in the first two years

Winning or losing in the world of total employee rewards comes down to the psychology of how to effectively inspire and motivate your top employees. So what do employees actually want?

This week, I had the opportunity to present in front of 200 HR leaders at DisruptHR San Diego. I also got to rap a bit, my own way of living Blueboard's mission around "challenging my comfort zones." :) I spent most of the time digging into the human brain, discussing how a variety of cash and non-cash incentives trigger different emotional responses across your right and left hemispheres, mapping these emotional responses to stages of Maslow’s hierarchy of needs. 

So why do we care about the brain? Getting into your employee's heads is crucial when forming your total employee rewards strategy, otherwise, your employee rewards won't move the needle when it comes to increased performance, motivation, or engagement rates. In the presentation recap below, we’ll share best practices for diversifying your total employee rewards budget to ensure it makes it past its second birthday, discussing concepts that influence employee perceptions like psychic value, guilt factor, and trophy value

If you're in the middle of planning your total employee rewards strategy, I'd love to swap ideas. Feel free to send me an email at, or connect with me on LinkedIn.

In¢entive$ Rule Everything Around Me: The Psychology of Total Employee Rewards Presentation

Access our full slide deck here on LinkedIn SlideShare.

Cash rules everything around me C.R.E.A.M., get the money, dollar dollar bill, y'all. Cash rules everything around me C.R.E.A.M., get the money, dollar dollar bill, y'all. Were you into 90s hip hop? Then you probably remember this song.

Our friends in the Wu-Tang Clan preached that “cash rules everything around me”, but I’m here tonight to tell you that it doesn’t. At least when considering the needs of your total employee rewards strategy.

The modern workplace is full of employees with increasingly high expectations. Blame Google for their free lunch, or just outside, Silverline, San Diego’s #1 Best Place to Work, boasting flexible work time, unlimited vacation and 401Ks that vest from day 1.

But hi, I can’t afford to hand out copious amounts of perks, bonuses and free kombucha. And I also can’t afford to lose my top employees, because SHRM tells me that it will cost up to 9 months salary to replace them.

As an HR leader, there are an overwhelming amount of tactics in your tool belt for motivating and retaining top employees. L&D, D&I, Comp and Benefits, ay ay ay, with so many choices, how will you prioritize?

Employee Recognition is a Low-hanging Fruit

Today we’re going to focus in on employee recognition. According to Deloitte, its a low-hanging fruit that when done well, reduces voluntary employee turnover rates by 31%. This means you save 1 in 3 employees from walking out your door.

The key element here is “when done well”: the modern employee demands personalization, authenticity and choice - so employee recognition can’t be one-size-fits all. The goal is to craft a competitive employee rewards and employee recognition program that exceeds every employee’s expectations.

A Look Inside Your Brain

Wu-Tang might have preferred the cash, and your employees might too. But here’s the problem: 77% of transaction-based employee recognition programs will fail in the first two years. So what do employees actually want? We need to get inside their heads:

This is your brain. There are two hemispheres, the left is logical and practical, loves math, data and science. The right, artistic and creative, loves, visuals, imagination, forming memories, and long walks on the beach.

Cash might feel like an easy tactic for driving employee recognition, but it’s transactional nature limits it to the left side of our brains. A successful employee rewards program will light up both! So let’s review three psychological factors to consider when planning your total employee rewards strategy:

1) Psychic Value

The first is psychic value - this is the employee reward’s perceived value or worth to the employee. Cash’s value is pretty obvious, a $20 bill’s value is written directly on paper. The left brain quickly digests this, and moves on to other things.

However, experiential employee rewards like lunch with the CEO, or incentive travel with family, are unmarked, so the right brain comes to life, forming strong anticipation visuals before the event, and lasting memories afterwards, not dollar signs.

2) Trophy Value

The second is Trophy Value. Once cash flows through the employee’s bank account, it’s off their radar. But physical reminders of achievement like plaques or digital badges continually simulate the visual right brain, and serve as a status symbol.

Not to mention our favorite digital trophy. Social currency is an incredible emotional stimulus for all sides of the brain. The left side eagerly counts the likes and comments, while the right swipes for the best photo filter. Are your employee rewards Instagram-worthy?

3) Guilt Factor

The last factor is guilt. The left brain links monetary rewards to compensation, and compensation is linked with satisfying basic needs like food, bills and shelter. We often visualize these through Maslow’s hierarchy.

Cash awards force recipients to make a psychological choice between something they want (evoking feelings of happiness, fulfillment, newness) versus something they need (evoking feelings of survival, hitting that last rung of Maslow’s pyramid), which usually rule out, thus creating the guilt factor.

But guilt is the exact opposite of how we want employees to feel, especially after they’ve killed it at work, right? We want employees to be ecstatic, to celebrate, and to treat themselves and their family to something they wouldn’t have otherwise afforded.

Goodyear's Findings

So what happens when you switch to non-cash rewards? Goodyear Tire & Rubber ran a sales contest that split participants equally across two blind groups, one group rewarded with cash, the other rewarded with an equally priced, but un-marked selection of merchandise and travel incentives.

Not only did the non-cash group produce results that were almost 50% greater, but digging into the ROI, we see that the cash group actually lost 20 cents for every dollar invested, while the non-cash group delivered an incremental 31 cents.

In closing, when planning for your total rewards program, consider making the switch to non-cash employee rewards and employee recognition. It offers increased “psychic” value, builds the employee’s physical and mental trophy case, and allows employees to treat themselves guilt-free. 

In return, promoting a more motivated, engaged workforce, and an ROI you can truly celebrate. 

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