Employee Motivation - Cash or Non Cash Incentives
Whenever you join an organisation , there is some motivation that drives you the entire period that you can last in that organisation. We can categorize the motivation into two parts such as Internal and External Motivation. These two are the only drivers which helps you to sustain in a job. Internal motivation is self built, whereas external motivation is in the form of incentives. Incentives are further classified into cash and non cash incentives.
Cash incentives means any form of monetary compensation given to the employee for rewarding their hard work and contribution to the firm such as perks, bonus , ESOP's etc. Non Cash incentives means pleasing employees without the cash angle attached to it.Non Cash incentives can be further sub divided into tangible and non tangible incentives. Merchandise and travel are included in the tangible non cash incentives, whereas appreciation and recognisition are non tangible non cash incentives.
Motivation is the activation or energization of goal-orientated behavior. Motivation is said to beintrinsic or extrinsic. Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure. Extrinsic motivation comes from outside of the individual. Common extrinsic motivations are rewards like money and grades, coercion and threat of punishment.
An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees, and in sales in order to attract and retain customers. The scientific literature als o refers to this concept as Pay for Performance.
Non-monetary incentives are used to reward participants for excellent behavior through opportunities. Non-monetary incentives may include flexible work hours, payroll or premium contributions, training, health savings or reimbursement accounts, or even paid sabbaticals. If it comes to environmental behavior, often labeling and recognition certificates are used. This may include stickers, T-shirts with banner logo etc
Monetary incentives include Cash Incentive, Non Cash Incentive:
Cash: While incentive program participants often state that they prefer cash to non-cash rewards, research has shown that cash is a poor motivator due to its lack of "trophy value."
Non Cash Incentive: Merchandise and other non-cash rewards are more often perceived as separate from compensation. Accordingly, non-cash rewards tend to stand out as rewards for performance, which enhances their long-term effect. Branded merchandise and other non-cash rewards have high trophy value, bringing greater recognition to the recipient at the time of the award and possessing a long-term lasting effect that can result in increased engagement in the organizations goals.
Employee Motivation - Cash or Non Cash Incentives
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