Motivation Through Non-Monetary Incentives

This paper talks about how to motivate employees through Non-Monetary Incentives an How non-monetary incentives are better than Monetary incentives in the long run.

MOTIVATION THROUGH NON-MONETARY INCENTIVES

1. INTRODUCTION

The term "motivation" was originally derived from the Latin word movre, which means "to move". But this one word is insufficient to describe the processes with how human behaviour is activated. Given below are some representative definitions of motivation.....

* The contemporary (immediate) influence on the direction, vigour, and persistence of action (Atkinson, 1964)

* It deals with how behaviour gets started, is energized, is sustained, is directed, is stopped, and what kind of subjective reaction is present in the organism while all this is going on (Jones, 1955)

* A process governing choice made by persons or lower organisms among alternative forms of voluntary activity (Vroom, 1964)

* Motivation has to do with a set of independent/dependent variable relationships that explain the direction, amplitude, and persistence of an individual's behaviour, holding constant the effects of aptitude, skill, and understanding of the task, and the constraints operating in the environment (Campbell & Pritchard, 1976)

Summarising the fore mentioned definitions, Motivation is the process that accounts for an individual's intensity, direction, and persistence of effort toward attaining a goal. Thus from the various definitions it can be seen that primary concerns while discussing motivation are what energises, channelises, and sustains human behaviour. By definition, managers are individuals who achieve goals through other people. The saying "If you want something done right, do it yourself" is very true as it is very difficult to find people who could do a challenging job well than to do it yourself. But unfortunately managers can't step in for their employees who are not performing well. They have the unenviable task of nurturing necessary competencies and commitment in their employees. More often the employees are competent enough to complete a task but they don't have the motivation to do their job to their potential. A recent Gallup poll found that a staggering 55% of employees in the most powerful nation were found to have no enthusiasm for their work. The necessity to motivate the employees is inherent in the primary objective of any organisation-increasing profit. It is an established fact that satisfied and highly motivated employees contribute their best in the workplace. Thus the profits are maximised. Research findings have found many ways to motivate the employees in their workplace. Apart from deploying financial and physical resources, every organisation must utilize its human resources effectively. Motivation enables an organisation to do so. Employees must be attracted to remain in an organisation. They must perform the tasks for which they have been hired must do so in a dependable manner. They must go beyond this dependable role performance and engage in some form of creative, spontaneous, and innovative behaviour at work-a set of behaviours commonly called "extra-role behaviour." So for all these we need motivation. Motivation can be achieved extrinsically by monetary incentives, or through punishments and intrinsically through non-monetary incentives. This paper discusses the scope of non-monetary incentives in motivation of employees.

2. LITERARY REVIEW

"People won't change their behaviour unless it makes a difference to them to do so"

Managers are individuals who achieve their goals through other people. They are constantly searching for ways to motivate their employees to make them work at their optimal level of performance to accomplish the company objective. Various incentives are provided by the managers to their employees for motivation. The incentives that are provided by the mangers to their employees can be broadly classified as monetary incentives and non-monetary incentives.

2.1 Comparison of monetary and non-monetary incentives

The purpose of monetary incentives is to reward associates for excellent job performance through money. Monetary incentives include profit sharing, project bonuses, stock options and warrants, scheduled bonuses (e.g., Christmas and performance-linked), and additional paid vacation time. Traditionally, these have helped maintain a positive motivational environment for associates. Monetary incentives can be diverse while having a similar effect on associates. One example of monetary incentives is mutual funds provided through company pension plans or insurance programs. Because it has been suggested that associates, depending on their age have different needs pertaining to incentives, traditional incentive packages are being replaced with alternatives to attract younger associates. On the other hand, the purpose of non-monetary benefits is to reward excellent job performance through opportunities. Non-monetary incentives include flexible work hours, training, pleasant work environment, and sabbaticals.

2.2 Problems with monetary incentives

"Managements have always looked at man as an animal to be manipulated with a carrot and stick. They found that when a man is lured/hurt, he will move to get the prize/avoid the pain-and they say, 'We're motivating the employees.' Hell you are not motivating them, you are moving them."*

-Frederick Herzberg, Professor Emeritus

Monetary incentives usually encourage compliance and achievement of difficult targets instead of encouraging creativity, innovation and foresight which are more important in the long run. Thus employees are not able to express their true talent and in the long run lose their creativity. Employers also may use monetary incentives as an extrinsic rather than an intrinsic motivator. In other words, associates are driven to do things just for the monetary reward versus doing something because it is the right thing to do. This can disrupt or terminate good relationships between

employees because they are transformed from co-workers to competitors, which can quickly disrupt the workplace environment. Another problem with monetary incentive is that it is given to circumvent a bigger problem for a short run. Sales employees are given higher monetary incentives to compensate for poor management