Competitive pay and a comprehensive benefits package are great recruitment and retention tools, but money is not effective in keeping employees motivated. New research reveals the value of allowing peak performers to “earn the right to indulge” using merchandise rewards.

Keeping top talent – particularly top salespeople – is crucial to remaining competitive in any industry. Companies are increasingly providing their best workers pay-for-performance bonuses with hopes that they will pamper themselves during off-hours and return to the office rested and ready to work even harder.

But there is a problem with cash rewards that researches say is all but insurmountable: pragmatism. Most of us are hesitant to spend money on non-essentials, even when it’s “extra income.” Consumers often feel guiltiest about the things that provide them with the highest pleasure. That jibes with a recent survey by Wirthlin Worldwide Research, which posed the question, “How did you spend your last cash reward?” 29% of respondents said they paid bills; 18% didn’t remember; 15% said they never received cash; 11% purchased gifts for family; 11% bought household items; and another 11% put the money in savings.

Research shows that people will work harder for a luxury reward than the cash equivalent; it also indicates that increasing the magnitude of an incentive program’s requirements increases the preference for luxury rewards rather than necessity rewards. In other words, the harder someone must work to achieve a goal, the more they want to receive a non-essential item as a reward.

Simply put, no matter how loud or how often your salespeople say, “Show me the money,” companies do better for themselves and their employees by using high-end or branded merchandise incentives.