What are non monetary incentives

what are non monetary incentives

Non Monetary Incentives In The Workplace

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Do Not Show Me the Money: The Growing Popularity of Non Monetary Incentives in the Workplace

With the growing decline of economy, more employers are using non-monetary incentives to motivate employees, yielding positive results. While everyone needs money for the expenses of everyday life, most current and long-standing employees rarely view cash as good motivation. If an employer pays fairly, employees desire appreciation and other non monetary rewards in exchange for a job well done. This trend is becoming more popular as businesses explore ways to motivate employees without breaking the budget. The benefits are far greater for business to offer what employees desire: opportunity to grow, flexible hours, recognition, opportunity to contribute, and autonomy, than to compensate employees with cash. This paper will discuss the advantages of using non-monetary incentives in the workplace.

Monetary Rewards

Although everyone needs money to obtain the smallest of essentials to live, employees prefer the benefits of non monetary gifts and incentives for motivation in the workplace. When employees receive money as a reward, the money is generally spent on bills and other expenses or purchases that the employee needs. The reward is considered an impersonal gift, as it will not be spent on something that the employee will enjoy. Monetary incentives also discourage creativity in the workplace. Employees concentrate on compliance rather than risk taking. More employees may be motivated to do things just to get the money, instead of doing things “because it is the right thing to do. This may destroy relationships between associates because they are transformed from coworkers into competitors”, (Ballentine, 2007, ¶ 8 ).

Monetary incentives may also be a compensation for poor management in the workplace. For example, an employer offering a monetary incentive to increase sales in that department may be to a cover for poor management in that department. The employees are called upon to pick up the slack so that the minimum sales quotas are met. This may cause employees to become insubordinate, because they are doing the jobs of upper management (Ballentine, 2007).

Non Monetary Rewards

Although businesses experience some of the same hardships with non monetary incentives, the extremes are far less. Therefore, the advantages are far greater in using non monetary gifts in the workplace. Non monetary gifts tend to promote creativity among associates in the workplace. If employees know that the reward they receive has no monetary value, they will work harder to go above and beyond, rather than just comply with the guidelines that are given, to complete the task. There tends to be less competition between associates when the reward is non monetary. When coworkers know that the reward is a mug or a t-shirt, they are more willing to work together as a team to produce a better outcome. Therefore, non monetary rewards also promote teamwork in the workplace (Ballentine, 2007).

With economy on a constant downward spiral, employers have to continuously find ways to motivate employees without breaking the bank (Appelbaum, 2000). Non monetary rewards are one of the best ways to do this. Not only are the employees motivated, but they become more interested in the company, as well as its goals and objectives. When employees are interested in the job, they are happy about their work. Happy employees are ultimately more productive, which benefits both the employee as well as the company (Sorauren, 2000).

Top Five Non Monetary Rewards

According to Ballentine (2007), “managers are constantly searching for ways to create a motivational environment where associates (employees) to work at their optimal levels to accomplish company objectives”, (¶ 1). Five of top incentives employees desire are as follows:

Flexible Hours

Family, children, friends, church, sports, hobbies and other

activities all have demands on today's employees. A flexible schedule or the occasional afternoon off can help employees meet some of these obligations. By allowing some flexibility in an employee’s schedule you can increase their desire and motivation (Recognition Rewards Enterprises, 2007, ¶ 2).


In today's high paced work environment it is reported that employees consider recognition of their work and efforts rare and infrequent. Think about it - What better way to have an employee continue their good work and success then to offer them praise-verbal, written or ideally a public announcement (¶ 3).

Opportunity to Learn, Develop and Advance as an Employee

Employees understand they need to grow, learn and develop new skills in order to advance. The ability to be able to choose their assignments and rise to new challenges offered by new responsibilities is also appealing (¶ 1).

The Opportunity to Contribute

People appreciate the opportunity to be part of the team. They enjoy the idea of working closely with managers and management, being involved in key decisions and being listened to and heard (¶4).

Independence and Autonomy

Employees want to be able to work independently. They do not want someone constantly watching over them and questioning their every move. They like to receive their assignments -preferable with the time frame required for completion and then have the independence to complete the work given the guidelines and framework you have set on their own merits (¶ 5).

According to Warren (2007), most people leave their job not because of under payment, but because they feel overlooked and neglected. Employees love to have their voices heard and their ideas recognized. Non monetary incentives are ideal for the small and medium sized businesses to compete with corporate America in obtaining and maintain the employment of quality workers. Since it seems to be virtually impossible to compete with the pay scale, non monetary perks and incentives can be what makes the employee happy in the workplace. Not only will the employee be happy at work, but the quality of his work will be of a higher quality because the employee will fell as if he or she is a valued asset to the company.

The advantages are clearly greater with using non monetary incentives in the workplace as a motivating tool for employees. Most employers prefer the use of non monetary rewards as they provide a way to keep the employees happy without putting the company’s budget at risk. When a company shows interest in its employees, the employees tend to be happier, more productive, and more interested in their jobs and the tasks set before them. With the increase in the number of businesses failing, a method that promotes teamwork, productivity, creativity, and increases the interest of employees without being hard on the budget should be what any business, large or small, should be leaning toward to stay afloat.


Appelbaum, S. & Rammie, K. (2000). An analysis of the utilization and effectiveness of non-financial incentives in small business. Journal of Management, 19 (9), 733-763. Retrieved March 20,2008, from EBSCOHOST database.

Ballentine, A. McKenzie, N. Wipocki, A. & Kepner, K. (2007, Winter). The role of monetary and non monetary incentives in the workplace as influenced by carreer stage. Retrieved March 25, 2008, from edis.ifas.ufl.edu

Recognition Rewards Enterprises (2007, Fall). Recognition doesn't cost. It pays. Retrieved March 26,2008, from www.recognitionrewards.com

Sorauren, I. (2000, Fall). Non monetary incentives: Do people work only for money. Business Ethics Quarterly, 10 (4), 925-944. Retrieved March 18,2008, from EBSCOHOST database.

Warren, M. (2007, Fall). Stuff is not enough. Marketing Magazine, 112 (11). Retrieved March 19, 2008, from EBSCOHOST database.

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