Introduction - Monetary and Non - Monetary Motivations
Managers are constantly searching for ways to create a motivational environment where employees can work at their optimal levels to accomplish company objectives.
Workplace motivators include both monetary and non-monetary incentives.
Monetary incentives can be diverse while having a similar effect on employees.
Because it has been suggested that employees, depending on their age, have different needs pertaining to incentives, traditional incentive packages are being replaced with alternatives to attract younger employees.
Whether you are a small business owner or a human resource professional you will find it essential and advantageous to incentivize your employees occasionally to ensure a smooth running, effectiveness, and expansion of your business. Incentivizing brings great benefits. It enhances employee morale and renews dedication which in turn cultivates efficiency, higher productivity, better customer service, and results in greater sales revenues and ultimately profits. Incentives can be categorized into two – monetary and non-monetary incentives. Monetary incentives are quite straightforward and represent quantifiable cash benefits. Non-monetary incentives come in the form of opportunities or tangible gifts which have an underlying monetary value as well.
(staff, T. compared 2020. Monetary vs non-monetary incentives)
Monetary Incentives
The purpose of monetary incentives is to reward employees for excellent job performance through money.
Monetary incentives include profit sharing, project bonuses, stock options and warrants, scheduled bonuses (e.g., Christmas and performance-linked)
Traditionally, these have helped maintain a positive motivational environment for employees.
Non- monetary Incentives
The purpose of non - monetary incentives is to reward associates for excellent job performance through opportunities.
Non - monetary incentives include flexible work hours, training and education, a pleasant work environment, and sabbaticals.
Difference between monetary and non-monetary incentives
The main points of difference between monetary and non-monetary incentives are given below:
Monetary versus non-monetary incentives – tabular comparison
A tabular comparison of monetary and non-monetary incentives is provided below
Have different forms
Monetary incentives take the form of measurable hard cash benefits.
Non-monetary incentives take the form of opportunities or tangible gifts with primary monetary value.
- How they influence employee behavior
Monetary incentives encourage compliance in employees for the achievement of benchmark.
Non-monetary incentives they encourage risk-taking and innovation to surpass goals.
- Employee perception
Monetary incentives are straightforward and employees can discern their exact value.
Non-monetary incentives are inconspicuous and employee reaction is unpredictable.
- How long are they remembered
Monetary incentives might be absorbed into the salary and forgotten earlier than non-monetary incentives.
Non-monetary incentives acts as a long-lasting reminder of employee’s achievement.
- Impact on budget
Monetary incentives hard on the budget.
Non-monetary incentives moderate on the budget with higher impact.
- Work required by management
Monetary incentives no forethought or work is required.
Non-monetary incentives forethought and working to evaluate the needs of employees is required by the management.
Conclusion – Monetary vs non-monetary incentives
Monetary and non-monetary incentives differ in form, role and impact.
Different employees therefore perceive them differently.
We have to experiment with monetary and non-monetary incentives before we choose the best one for our employees.
Nonetheless, the target for all incentives is the same; cater employee needs and increase job satisfaction to benefit the business as a whole.
References
Career-development/motivation-in-management (Online) available from https://au.indeed.com/ (accessed on 13/11/2022)
What-is-motivation (Online) available from https://www.verywellmind.com/ (accessed on 13/11/2022)
What is motivation (online) available from https://www.verywellmind.com/what-is-motivation-2795378 (accessed on 13/11/2022)
Monetary and Non-Monetary incentives (Online) available from https://www.termscompared.com/monetary-vs-non-monetary-incentives/ (accessed on 29/11/2022)
Monetary and Non-Monetary Rewards (Online) available fromhttps://diferr.com/difference-between-monetary-and-non-monetary-rewards/ (accessed on 29/11/2022)
Monetary and Non-Monetary Factors of Motivation (Online) available from https://www.yourarticlelibrary.com/motivation/monetary-and-non-monetary-factors-of-motivation/32391 (accessed on 29/11/2022)
staff, T. compared 2020. Monetary vs non-monetary incentives - definitions, meanings, differences | Termscompared. Available at: https://www.termscompared.com/monetary-vs-non-monetary-incentives/ [Accessed: 22 December 2022].
Nice explained but How would you motivate your staff using monetary and non-monetary motivational techniques?
ReplyDelete1. Giving Awards · 2. Recreational Activities · 3. Annual Picnic · 4. Interaction with Employees' Families · 5. Conducting Seminars and Workshops are some non monetary motivation techniques.Monetary incentives include profit sharing, project bonuses, stock options and warrants, scheduled bonuses (e.g., Christmas and performance-linked), and additional paid vacation time.
DeleteThank you Mr dhanushka Offering rewards is a common approach that employees usually take, and there are two main types of rewards: monetary rewards i.e cash offered to individuals based on assessments of their performance, or non-monetary rewards such as making them a part of a thriving community, offering flexible working hours, paid leaves
DeleteAs you stated
ReplyDeleteFinancial incentives are tangible financial prizes given to staff in exchange for exceptional performance or the accomplishment of long-term objectives.
Non-monetary rewards are given for great job performance or for achieving unique goals that provide value to the business, such reaching sales targets.
I believe that, from business to business, how a corporation treats its employees should be judged in light of the circumstances.
Thank you very much for sharing your thoughts Mr Aruna.
Deleteyes Mr Aruna some of the important monetary factors in these days are cost of fuel, insurance, bonuses and non-monetary factors are travel time, comfort, and reliability of each transportation option. The significance of these non-monetary factors is poorly understood and often ignored.
DeleteAs per my knowledge, both monetary and non-monetary motivation traits are required to retain employees as most of them are expecting a personal growth in addition to financial benefits.
ReplyDeleteYes Mr Nadun totally agreed with you.
DeleteBoth monetary and non-monetary incentives are crucial to the satisfaction of team members and the health of business, but it can be difficult to determine a healthy and productive balance between the two.
DeleteTheoretically, both options have the power to impact employee recruitment and retention, and both are popular with employees and employers alike.
According to your point of view, what do employees seek more out of monetary and non-monetary factors of motivation?
ReplyDeleteYes Ms Dinusha the success of the team and the health of the company depend on both monetary and non-monetary incentives, but finding a healthy and effective balance between the two can be challenging.
DeleteBoth options are well-liked by both employees and employers and have the potential to influence employee retention and recruitment.
Can you explain how monetary and non monetary factors lead to company performance and productivity ?
ReplyDeleteThe success of the team and the health of the company depend on both monetary and non-monetary incentives, but finding a healthy and effective balance between the two can be challenging.
DeleteBoth options are well-liked by both employees and employers and have the potential to influence employee retention and recruitment.
Organization has to well manage monetary and non monetary motivation factors due to employees needs are difference
ReplyDeleteYes Mr Wimal totally agreed with you , Monetary incentives are quite straightforward and represent quantifiable cash benefits. Non-monetary incentives come in the form of opportunities or tangible gifts which have an underlying monetary value as well. Consequently, they are viewed differently by various employees.
DeleteBefore deciding which is best for our employees, we must test both monetary and non-monetary incentives.
All incentives, however, aim to satisfy employee needs and boost job satisfaction in order to benefit the company as a whole.
Exactly Mr Wimal Thank you very much
ReplyDelete