News & Events
Challenges of Cash Prizes
- December 31, 2017
- Posted by: Vas Taras
- Category: X-Culture Stories
As we are launching the X-Culture Academy, a children’s version of the X-Culture competition, we had to revisit the very challenging issue of the winner’s prize.
X-Culture is a competition. If it is a competition, there must be a prize.
However, it is much more complicated than it may seem. Here is what we tried so far and why it did not work.
First, as paradoxically as it sounds, it is not clear who can win the X-Culture competition.
- A student? But it is a team-based competition.
- A team? Well, most participants sort-of see themselves are representing universities or countries. But each team is comprised of people from different universities and different countries. So if a team wins, you can’t say that your university is the best, or that Germany won this international competition.
- A country or university? Well, it’s the teams that write the reports.
Second, selecting the best team (or student or university or country). An objective selection of a winner is nearly impossible. It’s about 5,000 students and almost a 1,000 teams. About 100 teams will get perfect ratings for their reports. How can you say this report is #1 and another one is #2? There is no right or wrong answer to the business challenges the students work on. There is big difference in quality between a bad team and a good team. But selecting one from top 10 – ask 10 judges and each one will have a different answer.
The best prize is money. Everyone is happy to receive money. We tried money. In one semester, the winning team got $2,000, second place $1,000, third place $500. Another semester we had $1000 for top three teams. Never again.
- Even if we offer $1,000 or even $3,000 for the winning team, it is still a relatively small amount of money per team member, so the prize does not look very valuable. It is not life-changing. Our tests showed the cash prize had zero effect on performance. We did not see any improvement in participation and quality of work compared to the no-prize condition.
- Making the payments is an administrative nightmare. It literally costs us more in administrative cost to make the payments than the amount of money we are paying out. About half of the prize recipients cannot cash an American check, receive a payment via PayPal or a bank wire. It literally takes dozens of emails back and forth trying to figure out the payment method and banking requisites. In the end, after over a hundred hours spent on collecting the information and trying to make payments, it still does not work for a few people and they get very upset when they do not receive their money.
Cash? No, thank you. You’re out of several thousand dollars and over a hundred of hours of your time. Yes zero effect on performance and someone is cursing you because they didn’t get their $167.
We then started offering $500 travel stipends to the members of the winning teams.
It seems like a great idea. You offer a sizable prize to the winning team ($3,500 to a team of 7). You pay only when then attend the X-Culture Global Symposium and you literally can give them the cash or a check that they can cash at the nearest bank. Simple, effective, and provides an incentive to attend the symposium.
No. Even worse than cash prizes.
- Many recipients cannot attend the Symposium (can’t get the U.S. visa, schedule conflict). They then demand a cash payment and we’re back to the nightmare of trying to make international payments (see above).
- For the U.S. students $500 covers almost all the cost as they don’t have to travel far, but they don’t really need it. They can afford to attend the Symposium even without a stipend. For someone from Bhutan, $500 is only a small portion of the total travel cost, so they can’t attend even with a travel stipend. No matter how to divide up the money, half of the recipients will be unhappy. The one from Bhutan should receive $2,000 while the three from the U.S. should receive nothing. Or so some think.
And then, not everyone on the winning team deserves the prize (cash or travel stipend). One in three teams will have someone on the team who someone else on the team believes should not receive a prize. Don’t even try to leave it up to them to figure this out or, even worse, try to redistribute the reward on your own.
We also thought about mailing trophies or plaques to the winners, but this can be even harder to do than sending cash or offering travel stipends.
- It’s expensive. A trophy or a plaque can cost $50 or more per person. The shipping can run another $50 or more depending on the destination. So the total can easily add up to $1000 per team for something that seems not that valuable.
- Shipping is an administrative hassle. Collecting all the addresses, ordering the trophies, getting the boxes, packaging, labeling – again, at least a hundred of man-hours.
- At least a few of those will be lost in mail or arrive damaged, so get ready for some upset winners and the need to re-do the whole thing all over again.
We also tried offering non-monetary prizes but usually ended up with a complicated list of little-value goodies where it is hard to even explain what we are offering.
So we are searching for a way to offer a (1) valuable, (2) can be described with a few words, and (3) is easy to administer.
At this time we offer:
- Special Winner Certificates and Recommendation Letters for the members of the best teams (high-resolution, print-ready PDFs);
- Special Winner Certificates and Recommendation Letters for the professors/teachers of the groups that showed the best performance (sort of a university prize, high-resolution, print-ready PDFs);
- Guaranteed invitation to the X-Culture Global Symposium for the members of the best teams (we always have more applicants than we can invite).
We are considering:
We would like to offer some non-monetary, high-value prizes like:
- Personal coaching, help and feedback from an industry expert or an experienced professor with
- preparing an application for a university/graduate program/stipend;
- resume, cover letter, job application package;
- job interview rehearsal;
- business idea, business plan, investment pitch.
- professional career counseling session.
- Free enrollment in the X-Culture Coaching Program ($775 value).
- Free subscription for one year for the services provided by X-Culture partner companies (e.g., plagiarism detection account or tutoring help).
- One year free access to all X-Culture webinars with industry experts, educators, entrepreneurs.
The problem here is that it is a long and complicated list. A prize should be simple.
One possible solution is to package all these services in a “Gold X-Culture Career Development Package” and offer the package as a prize. We can even create smaller “Silver” and “Bronze” career development packages for the second and third places. We can even sell these packages on our website to anyone. Why not? We have enough very experienced professors and industry experts in our network whose advice can literally change your life, can be a difference between being admitted to a top university or not, between getting a job or not, getting a scholarship or not. Their time is very valuable, but if the package is priced so that we can fairly compensate them for their time and advice, this could be a valuable product for students and a source of a little extra income for the experts. This way, there is a clear price (e.g., the winner gets a life-changing “Gold X-Culture Career Development Package” valued at $5,000).
To sum up: After a few years of trying, we discovered several methods that don’t work. We also have a few ideas that are yet to be tested.
By Vas Taras