What are tangible rewards?

Tangible rewards are rewards that employers or managers give to an employee to recognize and thank him for his good work. They are given as motivation and are contingent on desired results being achieved. Tangible rewards can be financial or non-financial, but they must be something physical, of value and/or meaningful that the employee can use for his or her own benefit.

What are examples of tangible rewards?

Examples of tangible rewards include:

• pay raise
• Cash Bonuses
• Gift cards (Amazon, local spas, restaurants, etc.)
• Gym Membership
• Free stuff (apparel, watches, Apple AirPods, concert tickets, etc.)
• food basket

For example, let's say Trisha far exceeds her quarterly sales goal. Her department manager decides to reward her with a large gift basket filled with local goods. This is done to recognize her achievement and motivate other salespeople to achieve similar results during the next quarter. This is an example of a tangible reward.

Examples of rewards that  are not tangible  include:

• Praising a Manager
• Company-wide recognition
• Admission to a new training program
• a coaching program
• Flexible hours at work

On the other hand, suppose Trisha's department manager praises her in front of the CEO at a company-wide meeting. Everyone claps and congratulates her for her work. This is   considered an intangible reward.

What are the benefits of tangible rewards?

There are many benefits of providing tangible rewards to employees in an organization, the most obvious being that it recognizes and appreciates good performance. This tangible display of appreciation increases employee motivation and continues high performance.

There are other strong benefits to offering tangible rewards, too:

• Employees develop a deep loyalty to their employer because their hard work is rewarded and they are thanked. This   has a huge impact on employee retention rates .
• Employees’ self-confidence is strengthened, which encourages them to contribute more in meetings and find solutions to problems.
• It is a way of directing the attention and performance of the employee (and therefore the organization).

Overall, tangible rewards are a great investment for individual employees as well as the company as a whole. To illustrate this point, let's take a look at Trisha's example. After receiving the gift basket, she cheered on her coworkers and encouraged them to surpass her sales for the next quarter. In the end, two others did the same and won the gift basket.

Trisha was known not only for her sales record but also for the respect she commanded from others in her department. As a result, management made her the team leader.

What are the potential disadvantages of tangible rewards?

Tangible rewards have some potential disadvantages, most notably that they have a short shelf life. This means that the motivation to receive such rewards may not last very long, as employee expectations change.

Back to Trisha, one day her team gets bored with gift baskets and wants gift cards instead. This isn't a major drawback, but if Trisha's salespeople   start to lose interest in achieving sales goals without a tangible reward, now she has a problem.

Other potential disadvantages of tangible rewards include:

• They increase the cost of business.
• It takes time to plan and execute a program.
• The distribution of rewards may be construed as bias or favoritism, particularly if the reward system is not consistent and sustainable.

What tangible rewards do employees prefer?

It can be difficult to know which tangible rewards employees prefer because everyone has different preferences, expectations, and motivations. However, Incentive Concepts has reported a cross-section of findings about what is generally preferred.

Their research found  :

• 62% of people prefer tangible rewards (even small ones) over recognition or other intangible rewards.
• Cash rewards are the most popular, with gift cards coming in second.
• Employees value the ability to choose their rewards from a variety of options.
• The presentation experience of receiving the award matters.

It is important to note that tangible rewards should not replace legitimately earned promotions or other leadership roles. This is because such intangible rewards   are intrinsically better at increasing employee engagement , company commitment, and overall satisfaction in the long term.