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Non-Monetary Incentives and Employee Motivation

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People differ in the ways that they can be motivated. Rewards and recognition that includes both monetary and non-monetary incentives is important for employee motivation. Although monetary incentives seem to be more attractive, research and surveys have reported otherwise. For example, acknowledgment from peer and other dynamics can extend the value of non-cash incentives and above the cash and value of the incentive. The objective of this paper is to focus on the various forms of non-monetary rewards that organizations are practicing. These non-monetary rewards have proven to make employees to be more engaged and productive at their workplaces. In a nutshell, employers must relatively practice both monetary and non-monetary incentive in order for employees to optimize their potential and productivity.


* Flexibility

* Respect and Recognition

* Training

* Chance for Contribution

* Belongingness

* Independence and Autonomy

Introduction: Rewards and Recognition

When a child being told by his parents that he will be given a PlayStation or going to the Disneyland if he scored an A in his exam, this may motivates the child to study hard and score well in his exam. When the parents kept their promised and recognized the child's effort, this can motivates the child to keep up with his/her good work to continue reaping the rewards and recognition from his/her parents. Like the example above, rewards and recognition also served as a powerful tool in motivating employee in organizations to improve performances. People differ in what motivates them to go that extra mile, but by creating a culture of recognition, employees tend to be more engaged. And engaged employees are happier, more loyal and more productive in their work.

Rewards and recognition are typically cost associated, such as commissions, compensations, cash bonuses and stock awards, gift certificates, reimbursements and a wide variety of company-paid perks. However, there are also other types of rewards and recognition that are as effective but may be less tangible such as flexibility, respect and acknowledgement, opportunities for training, belongingness in the organization, chance for contribution and also independence and autonomy during decision-making. These non-monetary rewards can be very meaningful to employees and thus plays an important role in employee motivation for performance improvement.

Top Six Non-Monetary Rewards & Employee Motivation

I. Flexibility

Flexibility in the workplace can be subdivided into two categories; (i) flexibility of the higher positions supervisors in accepting their employees opinions fairly and also (ii) flexibility about how, when and where their employees work.

(i) In the workplace, bosses are the decision makers of rules and regulations of the firm. Especially in bigger corporations like multinational companies (MNCs), specific procedures have already been introduced in ways to approach the various problems and conflicts. Employees are mandate to follow these rules and regulations. Most employees remain silent even when they do not agree with the rules. They only know how to follow orders to prevent clash with their supervisors and also in order to protect their position. However, if bosses always get all the way and do not want to take in other's opinion, employees will feel intimidated and feel limited of their position in the organization. In the long run, the organization will build up a lazy, uncreative and less productive workforce.

Workers should be given the opportunity to voice out their opinion and ideas, as well as the liberty to be versatile on their approaches to conflicts and problems. Employers should encourage and acknowledge this critical and creative thinking effort from their employees by praising them when they give good ideas and continue to encourage them for better ideas if they have not. When employees feel that they are being listened and heard, this increase their confidence and motivates them to continue to work hard and come up with new innovative ideas for the company.

(ii) Productivity and efficiency are typically associated with creating work structures and routines that boost performance and reduces error. However, according to a research by Ellen Ernst Kossek, a better approach is one that can also factor in the individual differences of an employee. For a full time employee that works the normal 9am-5pm (40 hours per week), juggling work, family, friends and community sometimes seem like an impossible task. With a tight work schedule and other external needs and responsibilities, employees' productivity gains are often squeezed which results them to be stressed our or disengaged. A good employer should account for his employees needs and able to be more flexible to where, when and how his employees choose to work.

For example, the U.S Government Accountability Office (GAO) in Seattle, Washington, does not follow the normal working hours of 9am-5am. Instead, the Seattle GAO employees are given the flexibility to create a personalized schedule that they confirm with their manager. The agreement has to fulfill 80 hours for every two weeks and also the requirement for an employee to come into the office for at least once a week. Taking advantage of this flexibility, some employees can work compressed schedules, where they take every fifth or tenth day off, and others can also take the mornings off and work into the evening. Research shows that employees tend to be healthier, experience less stress, and are more productive when they are able to effectively make the choices of when, where and how they work.

II. Respect & Recognition

There is always an opportunity to respect and recognized people's services but yet, many employers still refuse or often forget. Employees respond to appreciation expressed through recognition of their good work because it gives them an assurance that their work is valued. Furthermore, effective employee recognition also implies of actions and behaviors that the employee would most want to see his employee to repeat. When employees feel that their work is being valued, their satisfaction increases which raises their productivity. Everyone feels the need to respected and acknowledge of his or her achievement or even for a valiant effort.

Employee recognition can come in different forms. It may be surprising how simple gestures such as a pat on the



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