One of the struggles that managers face is continually finding ways to motivate employees. While giving bonuses and pay increases can sometimes motivate employees, money can only motivate a person so much. To motivate employees, some managers turn to non-cash incentives as an alternative to bonuses.
More Effective Than Cash Alone
According to Microsoft Business, "Some human resource experts believe that non-cash rewards can have a greater impact for the employees." This is because most employees yearn for recognition for a job well-done. Instead of simply giving someone a financial bonus, recognize his effort and give him some other type of incentive. For example, you might recognize a performance in front of other employees by giving him a three-day weekend and a certificate. Going out of your way to congratulate someone on a good job can actually get a better reaction than just giving him cash.
Employees Can Visualize Benefit
Another reason that non-cash incentives sometimes work better than cash bonuses is because employees can actually visualize the reward. When you offer an employee a bonus, she is excited about the potential of receiving the extra money, but she may not know exactly how she wants to spend it. By comparison, if you offer some kind of tangible non-cash incentive, such as a vacation, the employee knows exactly what she is getting. This helps employees visualize the result of their extra labor.
Cost vs. Perceived Value
Another reason that non-cash benefits can motivate employees better than cash is because of the perceived value of the benefit in comparison to the actual cost. Many of the non-cash benefits provided by companies are purchased for less than what they are actually worth. For example, the company might give away a television that it obtained through a special purchase for $1,000. The television is actually worth $2,000, and the perceived value of the incentive is $2,000 to the employee. If the company were to give cash, it would have to spend $2,000 on the incentive to gain an equivalent motivational factor.
Extra Perks
Many of the non-cash incentives that companies offer are for items that many people do not buy on their own, but would enjoy regardless. For example, when money is tight, you will not go out and spend $100 on a massage or a facial. However, if you know that you can receive this as an incentive for working harder, you may be inclined to work harder. These incentives often provide extra motivation for employees who want the extra perks.
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