3 effective alternatives to monetary incentives
Sebata Holdings CEO Greg Morris explains why money isn't everything to employees.
It’s no coincidence that the best companies to work for have and share a clear direction, offer challenging work, and entrench appealing cultures. Their employees feel valued and are empowered through opportunities for advancement and expressions of gratitude.
This is why we can’t assume that giving people more money will make them work harder. In fact, studies suggest that the effects of monetary rewards are short-lived because people don’t differentiate cash bonuses from their normal pay. Extra money is quickly sucked up by household expenses and debt – i.e. by working to fulfil our basic needs. Now, that’s not to say that we should discount monetary rewards. I believe there’s a time and place for both – and your business and culture are two of the biggest deciding factors.
Money means little if staff are overworked and don’t have the time or energy to enjoy the financial rewards they receive. People also respond better to incentives that address their psychological need for acceptance, appreciation, and accomplishment.
Here are three alternatives to monetary incentives that may be more effective ways to motivate your employees.
1 Flexible hours. Part of what makes us individuals is the fact that we’re motivated by different things. A graduate will appreciate a cash bonus. A new mother might also appreciate more money – but money can’t buy her more time with her baby. Flexible working hours can.
2 Gifts and vouchers. Yes, some roles – like commission work – require a more financially motivated incentive system to ensure the smooth running of the business and to achieve personal targets. Salespeople are rewarded financially because they bring in business and contribute directly to growing your profit. But admin and marketing staff, for example, receive set salaries and not commissions, so they can be acknowledged for excellent customer service or for improving an inefficient administration process. For them, training courses, movie tickets, vouchers, or even time off to pursue a personal passion project might offer a bigger thrill than money.
3 A simple ‘thank you’. Positive behaviours needn’t be rewarded with money or redeemable points. A simple ‘thank you’ goes a long way. One study noted a 50 percent increase in the amount of additional help being offered as a result of appreciation, suggesting that motivation extends past material things. And a boost in self-esteem ticks all the right boxes in Maslow’s fourth level of needs.
Although basic, recognition and appreciation are often overlooked motivators. The same study found that only 15 percent of us consistently say ‘thank you’ at work. According to another study, 79 percent of employee squit their jobs because they didn’t feel appreciated.
The bottom line is that we need to think differently about motivation and to apply creativity and innovation to company incentive programmes. Aim to align business and individual goals through a balance of monetary and non-monetary rewards, and you’ll soon see a massive impact on the bottom line and staff morale. There can be no greater incentive than that.
Maslow’s Hierarchy of Needs, one of the best-known theories of motivation, suggests that humans are motivated to fulfil basic needs – like food, shelter, and safety – before striving to satisfy more complex needs: health, companionship, self-esteem, and self-actualisation.
So, we get jobs to satisfy our basic needs. Then, with food in our stomachs and decent rest, we start to crave fulfilment in things money can’t buy: appreciation and respect, making a valuable contribution to the world, and – the Holy Grail of motivation – using our talents and abilities to achieve our full potential
Greg is the Chief Executive Officer of Sebata Holdings Limited, formerly MICROmega Holdings Limited.