Employees may derive satisfaction from the kind of work they perform, from decision making opportunities and so on. Highly motivated employees can make significant contribution to the way activities are carried out. They understand the importance of work assigned to them and make every possible effort to execute it as per the expectations.
An organization can use many methods to motivate employees. One possible way to motivate employees is to provide them with adequate incentives on a timely basis. Incentives can be segregated into cash (monetary) and non cash (non monetary) incentives.
However, different people may hold different perceptions in relation to cash and non cash incentives. It is generally said that cash incentives are always preferred by the employees.
However, the importance of non cash incentives in motivating employees should not be ignored. Incentives are generally offered to increase the level of work quality, to further enhance the productivity and efficiency levels, to retain talented employees and so on.
A cash incentive generally represents a monetary benefit to the employee in addition to the compensation received by an employee. Cash incentives are given to employees in form of bonuses, spot cash awards, stock options, project milestone awards and so on.
Every individual is driven by his/her needs and desires. To some individuals, money is the only means to satisfy these desires.
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However, it is important to note that money acts as a motivating factor only up to a certain extent. After a certain level, employees prefer to work on challenging assignments involving decision making and initiative taking.
Non Cash Incentives
Non cash incentives can have a longer impact on an employee’s mind. A certificate of excellence in work issued to any employee in recognition for his/her contribution to the organization makes an employee feel that he/she is an important part of the organization.
Similarly an appreciation by a superior in front of management can give a boost to an employee’s morale and satisfaction level. By recommending an employee for a training that will add value to his/her skills, an employee may feel that he/she is being considered for assignments or work profile requiring specialized knowledge and skills and that his/her organization considers him/her as an asset.
Employees may hesitate to discuss cash incentives given to them with their team members while this may not be the case with non cash incentives. Hence, even after getting a cash incentive, an employee may not get a high level of satisfaction.
Non cash incentives give boost to an employee’s ego which if taken in a positive sense can result in better performance levels resulting in many more rewards and appreciations.
To conclude, both cash as well as non cash incentives can serve the purpose of motivating employees. An organization must create proper incentive plans to reward employees as and when they perform beyond the expected levels.
Incentives should not be used as a measure to discriminate employees, but to encourage competition and a positive work environment.