Non-Cash Awards and Recognition Programs

Cash is king for most compensation plans. However, many organizations use non-cash awards, incentives, and recognition programs to supplement cash compensation and improve their total rewards programs.

Results from a 2008 Culpepper Pay Practices and Benefits Survey highlight a variety of different non-cash awards used by technology and life science companies to recognize and reward employees for service, achievements, and performance.

Types of Non-Cash Awards and Recognition Programs
Table 1 shows different types of non-cash awards and recognition programs utilized by companies. Gift cards and certificates are the most popular, with 38 percent of companies providing their employees with this type of award. Note: Equity awards were not covered by this survey.

In general, large companies are more likely to use non-cash awards and recognition programs than small companies.

Table 1: Non-Cash Awards and Recognition Programs
Non-Cash Award and Recognition	All Companies	Percent of Companies by Size (# of Employees)
Non-Cash Award and Recognition	All Companies	Up to 100	101 to 1,000	Over 1,000
Gift Cards / Certificates	38%	24%	43%	42%
Merchandise	19%	4%	14%	38%
Dinner	18%	6%	20%	25%
Special Trip	18%	14%	18%	23%
Trophy / Plaque	18%	13%	16%	25%
Top Performer Listing	12%	4%	12%	19%
Honorary Sales Club	7%	4%	2%	15%
Special Parking Spot	2%	0%	4%	2%

Events and Achievements Recognized and Rewarded
Companies typically recognize and reward employees with non-cash awards for long-term service, on-the-spot awards, and significant achievements (Table 2).

Table 2: Events and Achievements for Non-Cash Awards and Recognition
Reason for Non-Cash Award and Recognition	All Companies	Percent of Companies by Size (# of Employees)
Reason for Non-Cash Award and Recognition	All Companies	Up to 100	101 to 1,000	Over 1,000
Long-Term Service	62%	48%	58%	77%
On-the-Spot Award	61%	48%	63%	68%
Significant Achievements	61%	52%	67%	58%
High Performance	51%	39%	56%	52%
Project Completion	41%	17%	44%	55%
Retirement	19%	13%	14%	29%

Budget for Non-Cash Awards and Recognition Programs
Most organizations allocate less than one percent of their total compensation budget for non-cash awards and recognition programs (Figure 1).

Tax Gross-Ups for Non-Cash Awards
Tax gross-ups enable employees to enjoy the benefits of a non-cash award without having to pay taxes on the value of the award. Thirty-seven percent of organizations provide employees an additional cash payment to cover the tax liability of their non-cash awards (Table 3).

Table 3: Tax Gross-ups for Non-Cash Awards
	Percent of Companies
All Companies	37%
Company Size
Up to 100 Employees	25%
101 to 1,000 Employees	39%
Over 1,000 Employees	42%
Industry Sector
Life Sciences	39%
Technology	29%

Differences Between Types of Employees
The use of non-cash awards and recognition programs varies significantly between sales employees and other types of employees.

In addition to the data tables and figure above, we provide a more comprehensive report with additional data tables showing non-cash awards and recognition programs for the following groups of sales and non-sales employees:

Sales Employees

Executives
Directors
Managers
Representatives
Support

Non-Sales Employees

Executives
Directors
Managers
Professionals
Hourly and Non-Exempt

The comprehensive version of this report with the additional data tables is available to:

Participants in 2008 Non-Cash Awards and Recognition Programs Survey
Subscribers of Culpepper Benefits Surveys
Subscribers of Culpepper Pay Practices and Policies Surveys

Availability of Comprehensive Report as Downloadable PDF

Free to Participants in 2008 Non-Cash Awards and Recognition Programs Survey
Free to subscribers of Culpepper Benefits Survey Package
(includes Culpepper Library and Small Company Plus subscribers)
$295 for non-participants and non-subscribers (Order Form)

Data Source: Culpepper Pay Practices and Benefits Survey of 121 organizations.
Survey Dates: January – March 2008

Breakdown by Sector:
Technology 62%, Life Science 21%, Healthcare Services 2%, Other 14%

Breakdown by Company Size:
Up to 100 Employees 28%, 101 to 1,000 Employees 43%, Over 1,000 Employees: 29%

Breakdown by Country:
United States 89%, Canada 7%, Other 4%

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Enhance Your Total Rewards Plan with Non-Cash Awards