Should I give my employees cash or a gift?

When using corporate gifts to win over a prospect and close a deal, you are always going to want to send gifts over cash to the individual. Cash looks like a bribe, while a gift is nothing more than a gift. But when you are trying to figure out a way to reward your own employees, the result is not so straight forward. Both cash and gifts have a variety of benefits and weaknesses when it comes to giving them to your own employees.

Corporate Gifts

ˇ        Benefits

Corporate gifts are one of the best ways to show recognition or award the individual for a job well done. The award will sit on their desk to be viewed by both themselves and others for the remainder of their time with the company, and the gift itself shows an appreciation for the employee that is widely recognized throughout the company as recognizing employee value. Corporate gifts for employees can also be unique enough that they will naturally market your services to anyone your employee speaks with.

ˇ        Weaknesses

The one major flaw with providing corporate gifts to your employees is that they cannot be exchanged for cash, and in today’s tough economic environment, the employee may need cash – especially lower level employees. An employee making 30k a year may badly need the $300 that you spent on the corporate gift award, and while they will no doubt be thankful for the recognition, the cash equivalent of the gift is something they could have badly used.


ˇ        Benefits

Cash can be spent anywhere, and is a great way to compensate someone for hard work. Rarely do companies acknowledge when one employee performs above and beyond their pay grade, and cash is a great way to compensate them for their hard work in lieu of a raise or promotion.

ˇ        Weaknesses

Cash may be loved by most employees, but it is not much of an award. Instead, it simply highlights that the employee may not be paid enough. Also, the value of cash makes a big difference. A “gift” of $25 is not going to make nearly as strong an impression as one of $500. On the flipside, an attractive award of $25 will still be a great award, and one that they will appreciate receiving because it comes from the company.

What is Best?

Ideally you will want to compare both, especially if the reason for the recognition is because of the value they brought to the company. Otherwise, you should consider which to get based on the pay of the employee. If the amount you are willing to spend is less than 1% of the individual’s income, a gift is more than adequate. If the amount you are willing to spend is greater than 1%, the employee would probably prefer you give cash. Still, if all you are doing is rewarding the employee for a great job, an award shows more long term recognition than a small cash gift. Consider the award, but be sure and find a way to recognize the employee for their great work with compensation sometime in the future.