Non Monetary Incentives Essay

Motivating Employees Where Raises Are Not Available Monetary incentives increase motivation for the short-term; however, managers who focus on non-monetary incentives helps increase their employees’ motivation which leads to an increase employee retention rates and profits for the company. My goal of this paper is to explain why monetary incentives are an ineffective way to increase motivation, and to provide insight and examples of non-monetary incentives such as a flexible schedule, paid time off, and management recognition that managers can employ to increase and retain their employees’ motivation.

Often monetary incentives (i.e. raises) will provide an increase in motivation; however, Dholakiya states that, “The happiness linked to a pay raise wears off quickly. At best, it will have a passing impact on motivation. It’s common human tendency to want more, especially when it comes to salary” (Dholakiya). The reality of monetary

Due to the current economic times, Dewhurst, Guthridge, and Mohr states that, “The economic slump offers business leaders a chance to more effectively reward talented employees by emphasizing nonfinancial motivators rather than bonuses” (Dewhurst, et al). The company should focus on non-monetary incentives are cost effective to the company, because they are already included in their annual budget or have no cost to the company at all. There are no unexpected additional expenses that the company has to come out of pocket for. By focusing on non-monetary incentives, it gives the company and its managers the opportunity to create and implement a non-monetary reward system that benefits their hardworking employees which leads to an increase in motivation and productivity. Some examples of non-monetary incentives are: a flexible schedule, paid time off, and management