The cash vs. gift card debate in the reward and incentive world has a common misconception that cash is more appealing, therefore more motivating, to someone receiving it. However, studies show that gift cards are not only more intrinsically appealing, but also more effective at creating positive associations and changing behavior.
A research group at University of Pennsylvania's Center for Health Incentives and Behavioral Economics and the Penn Medicine Center for Health Care Innovation is testing an interesting theory that uses the model of a basic employee rewards program. Since many patients stop taking their medication regularly within a year of having a heart attack, so the research group is experimenting with giving patients a small prize for taking their meds on time (complete with transmitter outfitted pill bottles to prevent dishonesty). The theory behind the doctors' research is exactly the same concept used by employers to incentivize employees towards a desired behavior in the workplace. The rewards are not large, and are modeled around a lottery system. Each day you take your medication on time you earn the CHANCE to win a small monetary prize, and if you don't open your medication for 2-4 days the researchers are notified via the transmitters on the bottle and have a social worker contact the participant. This translates directly to the workplace. For a job well done, a small reward is given to motivate repeat behavior, however if an employees is slacking or not delivering the quality or production the organization requires, it triggers a feedback point from the manager to get the employee back on track. Using rewards in these types of instances, whether with patients or employees, that have trophy value like gift cards or time off can have a longer lasting impact than cash. Cash can be used for practical applications like bills, rather than allowing employees to build a lasting memory of treating themselves to a meal at The Cheesecake Factory, or a new outfit from The Limited. Building these types of experiences will solicit a stronger desire to repeat the behavior. For more information on the University of Pennsylvania study or the reward system in the study check out this article from the Wall Street Journal.
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