With the Olympics on our screens at the moment, it’s interesting to see how much winning a shiny gold disc means to people.

Tennis player Raphael Nadal, for instance, has little to prove in the world of tennis, already having established his dominance this season, and earned a small fortune to boot. But winning an Olympics medal brings a special recognition that a mountain of cash cannot replace.

The same is true of incentives. Cash is a poor incentive because it becomes a form of compensation. It goes straight into the bank account, and thus there is little recognition of the recipients achievements and acknowledgement of their efforts.

A more tangible reward, whether it is an honour such as a medal or trophy, or a prize product, carries with it a kudos that can be proudly used and displayed. For a product reward, say a watch or an iPod, it becomes a prized possession, and a constant reminder to everyone of the acheivement.

Meanwhile, some countries do actually reward cash for athletes receiving Olympics medals. It’s a policy that has been adopted at Beijing by Canada, with $20,000 for gold medal winners, and proven a runaway success judging by their massive haul of 2 golds so far. Far better is the Belarus approach – spurring weightlifter Andrei Aramnau to break three world records in his quest for Olympic gold and the promise of free meat sausages for life. And the Mayor or Mansfield has promised UK double gold medal swimmer Rebecca Adlington a pair of Jimmy Choos on her return to Britain.

I’m getting tired of reading that gift cards, and other incentive rewards, have “trophy value”. Imagine Paolo Maldini holding aloft a small piece of plastic that allows him to visit UEFA headquarters to pick up the European Cup the following week, and you’ll get an idea of the ridiculousness of this kind of statement.

What articles like this are trying to suggest is that receiving a giftcard or voucher, or points, is somehow inherently rewarding, not to mention motivating, and inspiring.

But try leaving a gift token under the Christmas tree for your kids and see the reaction you get.

Of course, gift cards, vouchers and online points can be exchanged for all sorts of wonderful goods, experiences and memories. But they are not motivational in themselves. It’s a deferred gratification, with a time-delay between getting your placeholder and then substituting it for something you want.

At this point I’m not going to argue whether vouchers or points are better in this respect – they each have strengths and weaknesses.

But, if we continue the concept of a trophy, the place at which receives the actual item itself, the iPod, the bike, or the tickets to the concert, is crucial.

If you’re redeeming a gift card or voucher, this is likely to be in a shop somewhere.

But if you’re redeeming points, the point of delivery is usually at the workplace, where the gifts are received and opened in front of colleagues. This is genuine trophy value.

One of our clients recently told us: “When that first box of stuff arrived for the sales team, and people started opening their prizes, you could see everyone gathering around, and wanting to know what they needed to do to get them. That’s when our incentive really took off.”

Never underestimate the motivational power of opening a present in front of work colleagues. Gifts have trophy value, tokens do not.

Are reward and recognition programmes a symptom of a growing addiction to praise?

If it holds true that the UK follows the US when it comes to incentives and motivation (a myth, in our experience, but that’s another story), are we set for uncontrolled praise inflation?

A recent article in the Wall Street Journal by Jeffrey Zaslow (readable here), “The Most-Praised Generation Goes to Work”, looks at the effect of unfettered praise on a generation of children now set to enter the workforce. It paints a disturbing picture of an infantilized workforce hung up on praise, rewards, and narcissim.

“Employers are dishing out kudos to workers for little more than showing up. Corporations including Lands’ End and Bank of America are hiring consultants to teach managers how to compliment employees using email, prize packages and public displays of appreciation. The 1,000-employee Scooter Store Inc., a power-wheelchair and scooter firm in New Braunfels, Texas, has a staff “celebrations assistant” whose job it is to throw confetti — 25 pounds a week — at employees. She also passes out 100 to 500 celebratory helium balloons a week.”

Parenting websites are full of guidance on how to not to overpraise children. In an article subitled The Inverse Power of Praise, author Po Bronson writes that continous praise leads to youngsters who avoid challenges and take the easy option.

“Since the 1969 publication of The Psychology of Self-Esteem, in which Nathaniel Branden opined that self-esteem was the single most important facet of a person, the belief that one must do whatever he can to achieve positive self-esteem has become a movement with broad societal effects. Anything potentially damaging to kids’ self-esteem was axed. Competitions were frowned upon. Soccer coaches stopped counting goals and handed out trophies to everyone. Teachers threw out their red pencils. Criticism was replaced with ubiquitous, even undeserved, praise.”

Can the same be translated to the workplace, and staff reward and recognition programmes? If rewards are frequently given without a corresponding performance achievement or behavioural change, the same principle might apply – staff will be less willing to take on challenging projects that might be riskier. Managers risk indulging their staff rather than driving them to perform better. Our belief is that rewards should always be used to drive performance or behaviour change and not just provide a ‘feelgood’ perk.

“For now, companies like the Scooter Store continue handing out the helium balloons. Katie Lynch, 22, is the firm’s “celebrations assistant,” charged with throwing confetti, filling balloons and showing up at employees’ desks to offer high-fives. “They all love it,” she says, especially younger workers who “seem to need that pat on the back. They don’t want to go unnoticed.”