One battle I have with managers (and individual contributors for that matter) is that money is not the most effective reward. The idea is that everyone wants money, most people need money, and money is what gives people the ability to buy the things they want. How can it not be a good reward?
It is a good reward - it just isn't an effective reward. An effective reward shows appreciation and builds engagement. Money is too impersonal. Every husband learns early in a marriage (assuming the marriage lasts) that a thoughtful gift beats a practical gift every day. It's why we buy presents, we don't just hand people a wad of bills.
What matters is experiences and thoughtfulness. Give something that is personal to the individual (meaning of value to them - not inappropriate). That shows you know them as people and you appreciate them enough to put in effort and work. A bonus is remembered once (when the check is cashed), but never again. A gift is remembered for a long time.
Do this little experiment - either on your own or ask others: Ask them the most memorable cash bonus they got - how much was it, why did they get it, etc. You may get an answer, but most likely it will be casual with no emotion. However, ask them about a time they got an appreciation gift that wasn't money - what was it and how will they feel.
I've told the story in the past - I've gotten bonus checks, some of a generous amount. But the appreciation gift I remember the most was a pack of gum and a note. The gum was the brand Extra and the note said something like "I appreciate all the Extra things you do around here. Thank you." I still get a warm feeling in my heart when I think about it.
Experiences and thoughtfulness are rewards. Cash is a commodity. No one gets excited about commodities.
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