Does giving employees extra money to spend on whatever they choose make for a happy workplace? Surprisingly, individual financial rewards can be detrimental to morale; jealousy and competition can arise, damaging team dynamics.
Consider switching to a more altruistic program, in which you provide employees the same bonuses with one caveat: A portion must be spent on “prosocial” contributions that benefit others, like charities.
At a company that gave employees charity vouchers, and encouraged them to contribute to a cause of their choice, people reported being more satisfied with their jobs and happier overall.
Another organization asked employees to spend on each other: Some teams indulged in chocolate or wine; one team bought a piñata, which they gladly bashed together.
Prosocial bonuses resulted in gifts that increased shared experiences – and teams that received them performed better than teams that received money to spend only on themselves.
(Source: “The Bonus Employees Really Want, Even If They Don’t Know It Yet,” by Lalin Anik and Jordi Quoidbach.)