Motivating Your Employees – Part #2: Power of Non-Monetary Incentives

While monetary compensation is arguably the primary tool for employee motivation (nobody will shy away from some extra cash), long-term morale is influenced by many other non-monetary incentives.  One prominent example is offering perks.  In a small business context, these may include nice meals, a gym membership, tickets to a show, and any other non-monetary reward.  Research has suggested that people generally value perks higher than their corresponding cash values, especially when the “gift” is something unlikely to be purchased by the receiver.  Many years ago, when the National Football League tried to encourage its top athletes to participate in the Pro Bowl by paying them, participation (or the enthusiasm thereof) was miserably low.  Despite thousands of dollars paid out, players were simply not excited to play.  When the NFL made the decision to move the Pro Bowl to Hawaii AND gave return flights and accommodation for the player’s significant other, involvement and attitudes took a positive turn, even though they were not paid as much as before.  Likewise, small business owners can achieve greater productivity and a higher return on their compensatory expenses by offering non-monetary incentives.

Other than material rewards, according to the now renowned theory of Maslow’s hierarchy of needs, employees are motivated to work harder with inherent incentives.  Especially for middle managers, who are critical to your operation, should somewhat fulfill their self-actualization and esteem needs at work.  That is, a small business should find ways to inspire lofty and fulfilling goals for its constituents.  Examples of this strategy are to actively and structurally support the employee’s on-going training, to acknowledge efforts through recognitions (“Best Employee of the Month”), and to actively involve managers in important company decisions.  Remember, a happy workplace is a successful business.