Another tip for motivating employees to be on time is finding the employee with the best attendance record and displaying the information on your notice board, publishing it in your internal Web site, and motivating other employees.

I see it as a question of sustainability. Working madly to make more and more money (growth), as we now know, can very easily go nowhere. If businesses want a workforce they can more likely hold onto when the economy hits such downturns, they need to think about developing their workforce, not paying them off. The idea behind non-financial incentives is a solid one and very much aligns with the longer term and more holistic perspective of sustainable business practices. Want to keep your employees? Offer them a fair wage and then “recognize” that they are human beings who respond to much more than dollar signs.

Financial rewards must remain reasonable to enable the non-financials to have the motivational benefits they’re capable of bringing. Compensation adjustments and management’s approach to workforce reduction must bear some market reasonableness under the present circumstances to provide a foundation for non-financial incentives to have their impact.

Over emphasis on financial incentives also results in distorted decision making and personal sub-optimization, while the non-financials typically encourage cooperation for the betterment of the whole.

Employee engagement and motivation is a recipe with two ingredients, getting the blend wrong will spoil the soup.

Leaders themselves are also people who’d like to be motivated and feel valued through non financial motivators. Change of leaders and influencers as a result of this lack, is also disruptive to a company’s performance. You’ll need a balance of leaders and employees who are focussed on ‘things’& of those who are focussed on ‘people’. A company is not a building, it’s a plant; so take care of it! @Richard Husada I like your suggestion.

“Money can’t buy me love.”

Only honest care and commitment do that.

How can today’s managers expect an unequal partnership to flourish?

Murphy’s law: with enough research you can prove anything.

Very true, the economic crisis has placed a heavey burden on people’s lives both at work and on family life and the once sought-after financial reward could be losing out to resource capability of the specific firm, but is it not true to say that financial and non-financial rewards go hand in hand?

Food for thought: if technologies develop faster and faster, many more people could find themselves unemployed with tasks becoming predominantly technology-driven and employee motivation might turn out to be employee horse trading.

Work is an important part of the social, moral, and ethical fabric of our society. It is a mixture of the human urge to succeed, the need to earn, to achieve, and to maintain a degree of self-respect, the desire to reach a level of responsibility and accountability, and to achieve an acceptable standard of living. Human beings feel comfortable with a system they know and understand and are re-assured when it is not under threat. And, without some motivational driving force, money, perks, pensions, recognition, and praise, people are becalmed, rudderless, adrift, and lacking direction.

According to McGregor, Maslow, and Herzberg, all occupational psychologists, people in organizations, singly and in groups, need stability, security, and motivational factors to meet their basic needs. And, they all agree that for human beings to function to the best of their ability they require recognition by managers and leaders to fulfill their obligations, and encouragement and opportunities to progress in order to gain a measure of self-esteem and contribute to society through a fair system of remuneration.

Maslow further suggested that until the basic human demands for food, shelter and security are satisfied people cannot progress up the ladder of motivational factors, and that is why any civilised society ensures the provision of basic necessities, education and training, to encourage people to progress. It is only when people feel comfortable with themselves and their surroundings and comfortable with their colleagues and work-load that they tend to give off their best working individually and more importantly as part of a team. It is unfortunate after all that time and effort investigating motivation in the workplace that at the end of the 20th century so many have not read and understood or even forgotten the work of these three men.

Too many directors and managers assume people are motivated solely by monetary reward. Motivational factors such as relating individual pay increases to the use of appraisal schemes in concert with Performance-Related Pay (PRP) systems rarely work. Regrettably, most pay schemes ignore the fundamental principle that an organization is a group of people that functions more efficiently and more effectively as a team. Paying different rates and different bonuses for the same or a similar job smacks of secrecy, causes distrust and friction, and does not necessarily improve performance but so often the reverse. Pay is important but it is not the only motivator.

No Company will succeed without teamwork, organization, co-operation, commitment, training and leadership; and, no organization will succeed without trust re-enforced by honest and open communication so that employees feel more secure in their jobs. As the industrialist, engineer, and former Chief Executive of the Chrysler motor company, Lee Iacocca, suggested, “Start with good people, lay out the rules, communicate with your employees.”

The financial rewards are one-time events. Besides, they are to do with expectation management, too. The non-financial motivators mentioned in the article above are actually about engagement. When managers get their team members to lead and also reognise them, they are engaging with them as well as engaging the employees in their own work. Thus engagement serves as a good motivator.

An extremely effective non-cash indirect incentive would be adoption of austerity practices such as sacrificing self bonuses and salary hikes for the CXOs and decision makers. Employees will understand and accept lower hikes only if they find the sincerity to sacrifice among the top level. Otherwise, non-cash incentives would just play a minor role and may not be enough to prevent accelerated attrition rates at hard financially constrained times.

I think both monetary and non-monetary incentives play a crucial role. While monetary factors remain the driving force, the non-monetray part is essential for job satisfaction and continuation.

Non-Monetary factors are important only if they hint about a possible monetary benefit in future (like leadership recognition, rewards and accolades, etc).

What an organization needs to do is to make the monetary incentives competitive and to motivate employees more through non-monetary incentives...but the success lies in selecting the right talent for the purpose.

I would like to comment on the non-financial incentive, chance to lead projects. In a big department or division with limited projects to go around, it would be difficult for the department or division head to assign project leaders for the projects. Leaving one out in favor of the other will not sit well with the one left out. And for the purpose of motivation, creation of projects or redundant task forces might not be a good idea after all.

In my opinion, each individual is unique and only when the manager truly understands each subordinate’s character, motivation can be achieved easily with the right incentives, monetary or non-monetary.

The authors are trying to simplify too much the complex issue of what motivates employees. Employee motivation is a function of many variables including money, power, recognition, age, sex, education, hierarchy level, fame, social, cultural, and economic background of the employee, and many more.

Some of the solutions offered by the authors such as leadership attention through one-to-one meetings are childish and unsustainable, and probably shows that authors have bookish knowledge and no real experience of leading functions in organization. Imagine a company having 5000+ employees and leadership wants to meet at least 10 employees a week; this itself would take away the management bandwidth and after some time the practice will come to an end. Such an exercise will be more harmful to employee morale and it would be better for organization not to plan such adventures.

The basic need for all of us is to feel that we are growing and learning. At every year-end review, I would have my direct reports (Scientists at all levels - PhD, MS, and BS) bring an updated resume. After the review, I would help them add one or two new bullet points that would make them more marketable than the previous year. As managers, we can recognize the contributions of our colleagues and articulate how that fits into the bigger picture. Try this and see how even an ordinary assignment turns into an opportunity for learning and you can get the team to take on both challenging and routine work equally. Cannot agree more with Dr. Linman’s comments about mentoring and its value.

Not so sure all this non-monetary reward is going to continue to motivate people once a real recovery takes hold. These types of practice should be taking place by leaders in biz regardless of the economic conditions. Compensating employees as the organization is profitable drives the growth and profitablity of the company. To ignore this is to be delusional because your good and talented people will leave (as stated in the study) and you then end up with mediocraty where who is left say “Boss, we like praise and it’s what keeps us here.” Sure. People like being compensated for performance....or better said, some people do. They are the star performers and get the superior results that companies need to survive. Right now we need all the talent we can afford to get through this recession and to carry us out of it. Paying an incentive (to all), even a little amount, or a gift card goes a longer way to say “I care” than just a verbal “Great job, Bob.” These people are not dumb; they understand the seriousness of the economy and the pain that is out there. Letting them know that you are trying to do something just to help them or their family is the most important thing you can do. It builds loyalty that is tested by fire and will be long lasting. Praise doesn’t put food on the table or pay the rent.

Symbolic actions by senior management have enormous impacts on morale. Giving up the corner office and joining the troops is amazingly refreshing and cuts off the ‘us versus them’ attitude. When the senior manager gets invited by colleagues for a casual lunch then they know they have broken down all barriers.

This article reflects the biases of HR managers and is primarily focused on how to externally motivate employees. Previous MQ articles on organizational complexity paint a different picture of how management can “get out of the way” and enable employees to be more productive. In a short article in Federal Computer Week, John Kamensky noted the following: “Teresa Amabile and Steven Kramer, in a recent Harvard Business Review article called “What Really Motivates Workers,” tell managers: “The key to motivation turns out to be largely within your control.”

Their advice? “Scrupulously avoid impeding progress.””

The bottom line is compensate fairly and enable individuals to do the work you hired them to do by off-loading excessive, redundant, legacy systems and streamlining and automating what’s left to the greatest extent possible. Doing so may just increase productivity, reduce overheads, increase the bottom line, and increase morale and job satisfaction.

There is a well-developed theory on employee motivation called Frederick Herzberg’s motivation-hygiene theory.

This theory is described in the paper “One more time: How do you motivate employees?” published in HBR. What the authors (Martin Dewhurst, Matthew Guthridge, and Elizabeth Mohr) describe in the current article is covered in that paper by Herzberg.

F. Herzberg passed away in 2000.

Motivation is the drive to perform. Performance is about meeting expectations. Beyond a hygiene level of material compensation, money cannot motivate people to perform well. Since its the Amygdala in the brain which has the veto (not your Neo Cortex) the main drive for performance has to stem from emotions.

As opportunities in the labor market increase (as opposed to a decade ago) it is indeed clear that non-financial motivators are important. However, the extent to which they matter and the degree of importance to different demographic groups would be interesting to see. I would suggest slicing this data by different variables. The logical one of course would be work experience (non-financial likely to be more important at lower levels of work experience). Additionally, you might also want to look at the effect of type of company (public or private), geographical region as well as type of economy on the type of motivators that are more effective.

Motivation is dependent on many levers. However, a common factor which determines the effectiveness of each lever is the intention underlying the actions of managers. As long as the organisational member senses or perceives earnestness in managerial action, lack of motivation is unlikely. Game playing by using different levers will render each of them grossly ineffective. What works is concern and fairness that comes with the usage of any tool, not the tool itself. Unfortunately, to an external observer only the tool is visible—monetary or non-monetary—and not the underlying motive of the manager’s action. Hence, we continue to mimic the actions and are confronted with results which are as varied as the situations in which they are implemented. Building trust in the fairness of the reward system is more critical to ensure employee commitment and motivation.

More and more research shows that taking a balanced approach to employee motivation (intrinsic/extrinsic, financial/non-financial) yields the best results. Might this just be that personal differences are diluted when results are measured from an aggregated body of individuals?

The survey underplays the power of non-cash motivators like opportunities to lead projects or task forces and create value. Maslow’s Theory of Hierarchy is still relevant! Maybe disaggregating the respondents in terms of roles/positions could have yielded better results.

Very true, but only with the caveat used by the authors, that non-financial incentives are more effective for “...for people with satisfactory salaries...”. The key issue is how individuals define whether their salary is satisfactory or not. My assessment is that it is not based on the absolute amount one makes, but how it fares relatively.

It is a very strong and innate human tendency to compare with his or her peers, friends, or classmates in similar industries and locations. All the motivating factors above are reduced to mere consolation (if not insult) rather than motivation, when people learn that others with similar qualifications or similar jobs in their vicinity get 2 times what they make.

Conclusion: Given that there aren’t many leaders of Winston Churchil’s or Mahatama Gandhi’s stature in most work places to motivate people with their presence and inner energy, Companies should be paying more attention to compensation benchmarking exercises and making serious efforts to be in sync with the marketplace and expectations of their people. I would even argue that non-financial motivations are the “hygiene” factors and Cash-is-King-Motivator, and not vice-versa.

The assertion that money is not the best employee motivator is absolutely correct. We use a process that when sponsored by the CEO consistently suspends the effects of culture and politics to get employees engaged. Results at a $13 billion utility: 7400 employee suggestions freed from managerial scrutiny resulted in a sustainable $300 million SG&A reduction in ten weeks. There were no financial incentives. The incentive was that their input would be presented to the CEO with no opportunity for political or cultural screening.

I agree that a good balance of both non-financial & financial enhancements can impress Management level staff. My question would be if you have a 80 percent part time workforce do the same metrics apply?

I’ve seen that training can be a very effective non-financial reward. Employees feel they are earning something that—in contrast to money—they won’t just spend, it’ll stay with them making them more valuable in the business market and that they will be able to apply beyond the work boundaries into their lives and families (i.e. when soft-skills are included in the program). Many organizations create a long-term training path (even with special certifications created by the company which are being obtained gradually as they make progress). This helps improve employee retention and satisfaction.

If the authors of this article intended to stimulate discussion they have done a great job. They strongly suggest that the only trigger for turning towards non-financial incentives is the weak economy and the subsequent limits on financial incentives. The causality that is suggested in this article is rude and injust. That is a disgruntling observation as this attitude puts HRM in the corner of HCM - where C stands for ‘Commodities’. When the economy is back on track it’s back to Human Commodities Management with a big ‘C’? Where is the passion and the persuasion that succes is a people business; that financial incentives are nothing more than a hygiene factor?

From a talent retention, morale, and motivation standpoint there is a lot to be gained by allowing tools to connect employees, share ideas, solve problems, and enable some of the social networking capabilities that are used to bring people together in the outside world. I have seen companies adopt programs to motivate employee participation in problem solving by developing their own “American Express Rewards” point system. The more points you have the more recognized you are as a subject matter expert, the more people want to connect with you, and the more people depend on you, which is a great position to be in for anyone!/p>

This raises some great points, but it’s worth noting that rewards, compensation, and recognition need to align the organization’s strategy with the needs of the employees. If the strategy is to run a low-cost assembly line, perhaps cash compensation is best and the odd “Good job” from a supervisor will suffice to get people to work just a little harder while they’re there. If an organization is poised to grow and retain its skilled, creative staff, something else has to come to play and that’s a higher level of engagement.

One perspective is that motivated professionals need nothing other than cash to be motivated to work because they know what their value is, but those days are gone. People need to believe in something, they need to have a reason to come to work every day if they’re going to make a long-term commitment to an organization and non-financial incentives are the things that create such an environment.

Leaders play a critical role as role models who employees should desire to emulate. Whether it is a one-to-one interaction or appreciation of employees from superiors; employees have the uncanny knack of perceiving whether it is genuine or an act which is programmed. Even if such acts are programmed, it is the leadership qualities which make them seem genuine until such programs become part and parcel of the structure and culture of an organization.

Many armed forces in developing countries like India cannot afford to pay their soldiers commensurate with their capabilities and equivalent to civil jobs, but their motivational levels and performance output remain consistently higher—a lot of this can be attributed to leadership. It would be worth undertaking studies on armed forces in developing countries as well in other organizations as to whether good or bad leadership improves or decreases talent retention.

I think the points of view put forward are provocative, but not so revolutionary once given further thought. Nearly all people have a need to feel valued, appreciated, and recognized. So, it is no wonder that attention from the boss, being appointed to head up a project, or assigned to a task force are valued.

The article implies, too, that the application of such methods opens wide a whole new vista to motivate employees, but in fact, these nonfinancial incentives mostly cannot be given out like candy. If that were to happen, they would become about as valuable a motivation tool as the annual cost of living increase. When dispensed, they need to be genuine and that often relates to practical limits constrained by real opportunities in an organization. For instance, there are only so many task forces and it makes sense to only put a limited number of people on them. The inescapable statistical fact is that everyone is not above average.

It’s important, I think, to also recognize that the power of these nonfinancial incentives derives to a great extent from the rarity of their application. In the usual context of such practices being underutilized, their signal is all the more poignant. The value of these nonfinancial incentives, would surely drop if their use were to become more commonplace, especially if dispensing them were to become less associated with the organization bestowing financial rewards (often bundled with a promotion) at a later time when opportunities begin to open.

Now with all of this nitpicking, I agree with the authors that there is plenty of room in most organizations to think more carefully and frequently about utilizing nonfinancial incentives. My main points though are that they still need to be genuine and authentic and that most have practical limits, except perhaps for the most basic of them all—simply paying attention to people and taking them seriously (in the article described as “attention from leaders”).

In reality few employers will entrust untested employees for new projects in order to motivate them. It always boils down to money.

Executives have started agreeing that intrinsic and extrinsic motivation are propotionate to each others, the above survey provides evidence. I strongly suggest that it’s time to argue that the intrinsic motivating factors are specific to the work nature/job profile of the employee.

The town hall, project, and one-on-one meeting comments were spot on from my perspective. A global addition here is the golden rule, with a twist: treat others how you would like to be treated, but respecting personal preferences. How can you know what is important to someone if you don’t ask? If you can’t ask, feel it out.

The main reason for any company’s focus on excessive monetary incentives lies in the incapability of sales managers or leaders to motivate employees from within and create an open enviornment.

Building on the themes this article raises, Dan Pink gave a talk at TED earlier this year that is worth mentioning in this context. His argument was that monetary rewards:
• Narrow focus
• Restrict possibilities
• Work if you are after improved performance for mechanical tasks
• Do not work, and in fact decrease performance, when even rudimentary cognitive skills are required for completion of tasks
• Further more, in this latter case, the larger the reward the poorer the performance.
This challenges many assumptions in organisations today, more so when coupled with the idea that the answer to improved performance lies in tapping into “intrinsic motivation” and empowering people to operate autonomously.

One example Pink gave was that of Google, who allow staff to work on projects of their own choosing during 20 percent of their time. Net result, amongst other product innovations, were Google Mail and Google News. The work of people like Dan Ariely in this area is worth reading as well.

The biggest thing an employee needs is to feel part of an orgainsation. What managers fail to do is to engage the employee. A little job enrichment goes a long way to make people forget the financial aspect of the job.

Public sector organisations in India, as employers, stand out in providing non-financial rewards. It is well known that due to the reasons of their structure, these organisations are not positioned to offer “market-oriented” compensation to their top executives. However, the enormously challenging nature of their assignments, and the consequent exposure and experience, besides the social status attached to these positions, ensures that flight of talent at these levels is at a bare minimum. No wonder that after the economic slowdown there is a clamour among the youth in India for careers in civil services, and public-sector undertakings. Life has come full circle as these trends mirror similar tendencies of the 60s, 70s, and early 80s.

I believe we are living in a transition period. We are departing the industrial age and all the ideas we developed about productivity will be challenged. A socially responsible, people, planet, and profit perspective in combination with a global “flat world” level playing field, will require more focus on intrinsic motivation.

Happy to explore the impact of CSR on employee motivation (I am on Linkedin).

In the Indian context, financial rewards seem to generate “short-term boosts of energy” across levels, irrespective of whether or not the employee has a satisfactory salary. However, the “increased” salary soon becomes par for the course, setting up expectations for further increases — during the late nineties, I saw situations where some employees had become dissatisfied and demotivated by 30 to 40 percent salary hikes! Because they had become used to much higher increases in the past!

Today, and maybe for some time to come, the importance of using cost-effective non-financial motivators cannot be underscored enough. Used well, I believe these approaches are extraordinarily potent. The challenge remains one of convictions. There is a great risk of managers and leaders using these motivators in a superficial manner—going through the motions dictated by some policy or ticking the check boxes in a to-do list. Leaders need to truly recognize and accept the value of such cost effective non financial motivators and be willing to invest their time and effort in using them right. Given that these approaches work at an individual employee level, this is hard work.

I have seen immediate managers praise some employees publicly, and when questioned on the rationale, sheepishly admit in private that they had to pick “someone” because there was a directive from HR to create “employee engagement”. Or one-on-one conversations, “Wednesday breakfast meetings” and the like with leadership – where the leader is multi-tasking across attending emails, receiving (and worse, making) phone calls, and resolving schedule conflicts on his diary while pretending to be paying attention to the employee. The energizing impact of such exercises probably lasts a couple of rounds. Employees see through this game very soon and as a result, leadership credibility takes a couple of more knocks along with employee motivation.

Participating in projects and task forces is no different. The relevance of the project to the business, a meaningful role for the employee, and the clear and unambiguous sponsorship of the project by leadership are critical ingredients for the employee to feel valued and consequently motivated. Many organizations take a half-hearted approach in this—priorities are switched, resources are shuffled around or pulled out, the sponsor fails to remain engaged with the project team, and the list goes on. Misdirected, such approaches are a recipe for increasing employee frustration.

A good balance between financial and non-financial motivators, conviction-driven practice and of course, “horses for the courses”, in my view would engage and inspire employees for longer term success.

I believe that financial and non-financial incentives go hand-in-hand in commanding loyalty and commitment from employees. In a competitive labour market, it is critical to have the right balance between financial and non-financial incentives over the medium to long term. Financial incentives without sufficient non-financial incentives will draw “mercenary” employees. Non-financial incentives without sufficient financial incentives will drive employees to the competition. I believe that the non-financial incentives are especially potent tools during a downturn as they highlight an opportunity for better financial incentives in the future. Recognition, management interaction, and increased responsibility improve the employee’s visibility and likelihood of getting better pay or promotions in future.

Very well articulated. We have frequently used non monetary motivators(challenging projects, role change, attention to their personal constraints etc) to great effect. In my view and experience people are willing to stick around and give their best for managers who they see as one concerned about their well being, both as employees and as persons.

I referred one of my grad students to the literature showing the serious weaknesses in most financial reward programs. He was writing an assignment on a project he had been given to revamp his bank’s reward program for “relationship managers” (essentially sales staff selling business loans). His final conclusions were intriguing: the research evidence was convincing but sales staff in financial services are so convinced that the opportunity to achieve high bonuses is critical that he feared his bank would lose good staff and have trouble attracting staff if they reduced reliance on sales-related bonuses.

Any sales manager knows all the ways sales staff have of manipulating such systems. The actual motivation is often one of competing with others, achieving status, and gaining a sense of being a “winner” (the money is a way of counting the level of success achieved, not in itself the reward). Have we trained some disciplines (for example, sales people and maybe top management) to assess how rewarding their jobs are by what they earn—even if they could never enjoy spending the amounts they achieve?

Significant gains have been made in my organization, over the past several years, by leveraging motivators other than money. Compensation research and employee surveys have demonstrated the value of intrinsic rewards generating results and engaging employees. Project participation is one of the motivators we have used most often resulting in improved morale, increased competency levels, enhanced team membership, and increased customer service with bottom line improvement. Project participants jump at the opportunity because we ensure their participation is actively promoted and advertised throughout the organization and recognized by senior management through personal thank you emails or notes. This is a significant ‘pat on the back.’ Encourage their participation, engage them in meaningful work, and then recognize the contribution they have made to furthering the goals and objectives of the organization. Project participation then becomes desired by all your high performers.

You have not discussed promotions, which traditionally reflect, in addition to an increase to the base salary, strong recognition of performance from management. With the slowdown in the rate of promotions in many companies, employees feel they are not appreciated. Often they already have responsibility and perform work at the next-higher level, and infer that this is not recognized. HR and management should change communications around promotions—no longer “when you deserve it” but rather “if we can afford it.” Employees would be more accepting, I believe, if HR were more transparent about the supply, demand, and distribution, of the company’s workforce.

The big challenge for companies on motivation is to work equally as hard at understanding what satisfies employees as we do for customers. Our own rolled up survey data shows that “recognition for competence” is a key motivator for our professional people. In recessionary times businesses can make short-term decisions without any evidence-based understanding of the impact on peoples motivation. Businesses need to segment their workforces, identify which motivators really switch people on and provide the right offer. This recession is truly going to be a moment of truth for leadership.

Seeking development is intrinsic to human nature. That offering challenging, developmental assignments is a strong motivator is a no-brainer. But as rightly pointed out, the major barrier is managerial committment in terms of time and involvement. Monetary recognition is seen as objective and easy but still that does not stop employees from quitting for higher paying companies (to do the same type of job). Developmental assignments tend to be better retainers in the long run for motivated and high performing employees. The type of assignment is indicative of recognition as it also reflects the confidence posed by leadership in the individual.

As long as the employee feels she is learning or developing a new skill or getting exposure to something new, she will not accord primary importance to money. One-on-ones with senior leaders also is a form of recognition and their impact can be enriched by having the senior leaders mentor the high performers for a fixed period of time or through assignments within their scope of influence (but where they are not necessarily the coaches).

But for all these, leaders need to understand and accept that motivating relationships take time and effort to develop. The initiative, at least in the initial stages, has to come from their side. But once formed, these help retain top talent in adverse business conditions, when monetary rewards become constrained.

Funny it takes so much discussion to establish something which is rather obvious: people don’t work only for the money. It seems everybody who’s been involved in competitive sports knows this perfectly, but when it comes to business we all become stupid group-think followers and completely forget about motivation and drive, the hunger for victory, that drove us when doing football, tennis, rugby or whichever other sport it was we did. Even senior management tends to be extremely focused and motivated when on the golf courses, but forget the non-monetary sides of motivation back in the office. This is one of those things which is so painfully obvious we tend to not see it after a while, and takes the largest economic crisis in 50 years to bring it back to visibility.

“One-on-one meetings between staff and leaders are hugely motivational,” explained an HR director from a mining and basic-materials company—“they make people feel valued during these difficult times.” I fully agree with this notion. What service businesses need to take from this crisis is that employees are not machines that can merely be switched on and off or be upgraded for better performance. What stands out from the results of this survey is that employees are feeling beings and need to be motivated as such. In an environment where uncertainty and depression hold sway over people, it is important that they know that management has everything under control, and has a plan and more than that, the employee forms a part of that plan.

Often, the most demotivated employees are the ones working for silent senior managers that can never be seen around the office. Often these employees sit with unanswered questions about not only their personal job security but about the future existence of the firm. It is important to communicate often, one-on-one if necessary, and to be brave in an uncertain business environment. Employees can see through the uncertainty and nervousness in management’s eyes.

Does one need to be motivated at all, if one is doing what one likes? If such is not the case, then no amount of motivation will help. Given that motivation helps once in a while even to the most self-motivated amongst us; what would those “once in a while” situations be?

It’s better to spend time in starting off with the right people with the right capabilities and compatabilities (to the Organisational DNA) than to recruit without a philosophy and spend valuable time in motivating people for little or no incremental return. Which brings one to the fundamental question: What is the corporate DNA? What does it stand for? What does it intend to do? How sustainable is it? Who will it benefit? A clear vision and well-articulated goals by a top management that passionately believes in and loves what they do should be motivating enough for all working towards achieving a goal.

I agree with your authors that many times financial incentives are easier to administer and require less time from those who are responsible for employee engagement. While financial incentives would always be important, what troubles me is that companies are moving back so quickly to bonuses again. Did no learning take place from what happened on Wall Street?

As a former management consultant and also executive of a large corporation, I could perfectly feel the differences of non-cash incentives. Both companies provided excellent pay, but the intellectual environment was the most significant difference. The article picks a few simple words that can make the entire difference: time and attention from immediate leadership, and that’s what many organizations aren’t prepared to provide. Fostering entrepreneurial (or “intrapreneurial”) behaviours require much more time and dedication than just “giving out blank pages” so that people can “freely” express their ideas and letting them talk. This is omission, not leadership.

Your article is timely. During these economic down times people are more aware of the traditional values such as family, honesty, and friendship. These are stable virtues they can fall back on. Additionally, the working population continues to age and older employees are less motivated by money alone. Employees that see their managers lead by example by transferring money spend on exclusive perks towards building improvements or team-based incentives are more loyal and motivated towards the greater good of the company. Whenever, people talk about a great company to work for they always describe its “culture” not the salary levels.

The trouble with monetary rewards is that people get used to them; they and their spouses come to expect them. When economic conditions get tough having motivated staff can make the difference between success or failure. But one of the first areas to be hit is the performance based bonus with a resulting demotivating effect. Motivation through personal recognition is more effective. People get a huge kick out of recognition; one-to-ones, leading tasks, being given special responsibilities, preparing papers, and presenting can make a huge difference in their motivation. During times of crisis there are many opportunities to ask individuals to consider different aspects and make these types of proposals. It is a sign of weak leadership when the response to a crisis is to close the doors and go into a huddle, it does not leverage the intellectual horsepower of the organisation and it demotivates.

Once again, it appears we have top managers and executives saying that non-financial incentives and rewards are the most effective motivating factors for their staff. Yet these same top people continue to award themselves huge salaries and unjustifiably large stock options and performance bonuses. Why do they think that non-financial rewards work for other people, but not for themselves? Perhaps (with appropriate acknowledgement of the Roman origins of “salary”), we should take their views with a grain of salt!

Several companies make a frequent mistake here, and that is ignoring that the value of non-financial reward (NFR) is tightly tied to the different employee segments of the organization.

The value of money is to some extent universal, while the value of NFR is most generally not. Giving a good NFR to the wrong employee segment will most likely cause dissatisfaction and even resentment from the employee that maybe suffered from a relatively smaller financial reward than in previous periods.

Some examples to shed some light on my point:

1) A young mother will most likely appreciate the possibility to work from home some days and/or reduced face time;
2) A single, career-agressive employee will most likely appreciate the possibility to show his potential by leading visible projects;
3) Specialists will very likely appreciate doing some research or study in office time, to supplement their professinal value (which is tied to the knowledge of their speciality);
4) Students will very likely appreciate having extra study and/or exam days, so they can finish their careers earlier with some little help from their companies.

Think of juggling the above mentioned incentives and employee segments and you will likely find the reason why some NFRs often lead to less than optimal results.

The outcomes of the survey are indeed very interesting and believable but not entirely new. The three non-cash motivators—praise from immediate managers, leadership attention, and a chance to lead projects or task forces do have a powerful impact on employee motivational levels as well as getting the employee fully engaged. The challenge however is to address the organizational culture. Values and ethics must embedded in the very foundations of such a culture. Leadership, too, must be values driven. The strategy and all other processes have to be aligned to this philosophy. Once the employee believes and identifies with the ‘purpose’ and ‘destiny’ of the organization his commitment would be unconditional.

In the years I have managed sales, marketing, engineering, and factory staff, one thing I have learned is that there is no one formula which fits all disciplines. Sales and marketing are looking for the instant gratification which closing a deal brings and the drive to meet quarterly and annual sales targets. Engineering staff enjoys the glee which completing a project brings, but also seeing the products become a hit in the market. Bragging rights give another kind of gratification. In the factory, my teams are driven by metrics; quality, production outputs, yields, and cost controls. For all of these teams there is one common thread and that is the gratification of meeting or exceeding the goals and having management recognize their achievements. For some it is in the form of a bonus; for others, praise and recognition; for others, it is the chance to grow in the company and build on the achievements and recognition from management, peers, subordinates, family, and friends. It is amazing to me how much weight a simple stop by the office or manufacturing floor by a senior management, officer, CEO, or president, carries with all the staff.

I agree with the use of non-financial measurements to motivate our top performers. Another point is to measure successes and openly compare it in terms of Key Performance Indicators (KPI), so as to provide satisfaction of top performers by knowing where they are in comparison to their peers. I should think that this is of utmost importance prior to the three non-financial measures you have mentioned.

I could not agree more, except that these are even more relevant in good times. Head hunters are more aggressive then, and bereft of these nonfinancial motivators, there is no way you can hold people back. Simple truisms but unfortunately very underleveraged. Reminds us to make that honest effort to practice positive psychology!

It would be great to have better information about the effectiveness of financial and non-financial measures as tracked against performance measures. The data here only describes the perception of impact which is influential in management decisions, but only one dimension.

Did we need a survey of 1500 people around the world to come to this conclusion? Just look at what happens in families; when are they the most cohesive, bonded, and focussed? Is it when they are rolling in the stuff, or when they acknowledge and pay attention each others’ contribution? The bane of modern business organization is leadership breaking away from basic human values, and seeking cover in some fancy management structure and framework!

This is an excellent article which essentially confronts the “tyranny of rewards.” With all we’re supposed to know, why have we not yet accepted the reality that the intrinsic motivation which comes from acknowledgement (an interpersonal phenomenon) is more powerful than attempts at extrinsic motivation (usually cash-related) which simply don’t make a big difference beyond the initial buzz/high? The former tends to be more effective as it responds to the very human need for acceptance, inclusion, and contribution. The latter tends to be ineffective as it is highly conditional, competitive, and coercive. Treating employees with recognition, respect, and reciprocity, provides a very human context where challanges and everyday demands can be met with energy and optimism. My 38 years in counselling, coaching, and consulting have shown me this to be the case.

Great study and brilliantly written article. Non-monetary incentives are not popular for the wrong reasons and perceptions. I would like to suggest training and skill development as another non-monetary incentive (yet it has a cost for the company) for several reasons: It is a manifest commitment of the managers/leadership towards “your” development, it is a way of “growing” even though you may not recieve a promotion or a new task soon, and the delivery of the benefit is immediate, among other benefits. What do you think?

It is very true that Money does not always buy motivation. We find that engaging in one-to-one meetings with team leaders and team leaders in turn with their direct reports brings in great buy-in from staff and boosts morale. Also, our practice of skip-level meeting energizes staff and they feel commited and want to contribute more. The simple task of talking to teams and staff by unscheduled visits to staff floors makes a lot of difference in the overall morale of the company. The fact that team leaders get away from their cabins and meet their teams has positive impact (move away from a ‘hiding’ mentality). The Jun-09 survey results of non-financial motivators are no surprise and has lot of relevance not only during these recession period but at all times.

The military has always had a challenge in this regard, as we can not offer much in the way of financial bonuses. That being said, we have gotten pretty good at finding other ways to recognize our people. This morning I took one of my stellar performers to the Division’s Motivator of the Month Breakfast. Once a month each Chief Petty Officer brings his (or her) top performer out to breakfast at the local Cracker Barrel and buys them breakfast. Not only does the individual get recognized by his peers (he and I are missing out of the office for the first two hours of the day), but also gets to be recognized by the larger group, as there are often six or more battalions present. The breakfast is “chaired” by the Command Master Chief. After everone eats, the Chief introduces his motivator and tells the group what he’s done to deserve the recognition. Afterwards the motivator gets a 2nd Marine Division Coin. Total cost for the morning 10 bucks out of my pocket and 5 bucks per coin from the Master Chief. Pretty cheap, but it really goes a long way.

Excellent research. I would add that as companies look to restart recognition programs as the economy recovers, they must communicate very clearly to employees why such programs were cut and why they are being added back now or you risk communicating that recognition is not truly important or valued by leadership. If the old programs were largely cash-based, then a strong communication theme when restarting with a largely non-cash recognition program would be the company’s commitment to much more frequent, more timely, and more personal recognition for all employees (not just the elite to whom bonus and stock programs are typically limited). This effort to make recognition more strategic and behavior-based (on company values) as well as outcome based (achievement of strategic objectives) reinforces those behaviors you most want to see from all employees.

Good article on a very appropriate topic for the times. However, I wonder how the external factors with regard to the economy affected the survey results. To some extent the reality that companies are not performing well sets an expectation among employees about the financial motivators (or the lack there of), so they don’t place large value on them. It would be interesting to see how the nonfinancial motivators stack up against financial motivators in good times. Secondly, as the article rightly points out, one should expect to see a difference between senior versus rank-and-file employees as well.

This article outlines why I often say to my manager, “you inspire me.” She is one of the few that knows how to provide challenges and give special recognition that is not always financially motivated, but goes a long way in keeping me engaged and interested.

I think this article is right on the (non) money. The key phrase is “makes people feel like they’re part of the answer—and part of the company’s future.” I can (and have) gotten a bonus and/or raise, and then been RIF’ed shortly thereafter, so the financial reward has a limited life expectancy in trying times from an employee perspective. In fact, adding salary costs may make the employee feel like more of a bulls-eye has been placed on their back than a reassurance of value. You have just increased the potential savings of eliminating them from the organization.

Employees greatly value the reassurance of feeling needed and respected, and are more likely to see these non-financial incentives as a sign that they have some control over their future based on their own efforts. In times when employees feel powerless and uncertain or threatened, showing that the organization sees value in them for the long-term is comforting and allows them to focus in their future with the company, rather than being distracted by looking for back-up options elsewhere.

Nearly 40 years ago I started as a young engineer and analyst, never really knowing where my abilities and education might take me. I performed the basic work handed to me, always did it well and on-time with no mistakes. It became an expectation without reward, or so I thought.

Patience, accuracy, and consistency are not today’s standards, to my dismay. It took me nearly 10 years, initially, of valuable and “letter acknowledged” work before a mentor caught my work and advanced me into senior roles over the next 20 years as the master engineering architect or scientist. This maturing into a master-level ability is sadly overlooked. I see more resumes with months of ability across a multitude of non-related areas than anything I would consider truly advancing an expertise. Leadership is not the title, it is a clear and visible ability seen and felt immediately. Mentorship is truly the ultimate gift of advancing people into accomplishing their greatest. Their rewards come quickly and over a lifetime of sometimes small, sometimes extraordinary effort, but always a valuable personal asset that is visibly and wonderfully recognized as a true achievement worth admiring and fostering in others.

After reading this article, it seems evident that there are still many people who do not understand the difference between people and things. I believe it was Ken Blanchard that once pointed out that things cannot be led, only managed, and that people can be either led or managed depending on whether they are treated as people or things. The few who apparently get this, who only hire people they are then willing to lead (as opposed to manage - like so much chattel), are the shining stars who will keep their staff consistently motivated by working with each individually in their career development.

A perfect case in point is the leading company from the beverage industry mentioned near the end of the article. They singled out 30 of their highest achievers and offered them the chance to work on a special project. I guarantee that those not selected fell into two camps. The smaller group, consisting of the youngest and most recently hired staff, may have been motivated by seeing the special favor being given to others, thinking that they too may one day be one of the favored few. The other and much larger group, consisting of the “B players” who perform the majority of the work, yet have been passed over too many times, will only be made more bitter and cynical by this divisive management faux pas—definitely no more motivated to perform for bosses who so openly play favorites.

I can confirm that attention from top leaders works. I ran the suggestion scheme in a plant of the late Fokker Aircraft Company. The best of the ideas that were worth implementing (about 4 to 8 per year) were rewarded a net cash bonus of €6,000 to €10,000. But the picture in the company newsletter of the genius and the plant manager gathered round the idea at the shop floor, plus a break for coffee and cakes with closest collegues, and above all the plant manager’s genuine interest and appreciation, was according to most of them the important part of their total reward.

I think the biggest motivators are appreciation, personal time for family, and then earnings. I don’t know about others, but I find that these work for me.

I would offer that the caveat “satisfactory salary” levels may deter a broader application of non-financial rewards to those at the lower echelons in an organization. I firmly believe the same underlying reasons that cause people to respond to non-financial rewards are rooted in the very essence of our human nature and should generally be considered as important regardless of one’s position within the organizational heirarchy. If instead of treating individuals as variable units of production we treated everyone as a complex human being, we might have less stress in the workplace, fewer outcries for fairness, and perhaps even less need for work actions from our partners in organized labor.

Meaningful work, specific goals, celebrating success, and heartfelt and very personal thank you’s work very effectively. The handwritten personal note is effective—even with Younger generations who have never written or received a note—it’s a total and very positive surprise.

Executive Leadership must include creating and supporting a culture of health and well being as a motivator and competitive business strategy. Wealth without health is negative for human capital sustainability and creativity and for employees’ personal well being and satisfaction. The health of each company’s population represents a critical asset requiring more direct attention than a medical plan for sickness. As stated by Peter Drucker “Management is doing things right; leadership is doing the right things”. A culture of health strategy for each company is a right thing to do.

This article is right on! Just look at sales within each organization, easily one of the highest turnover rates in almost any company, ours included. Money is the carrot that most seem to use. We experienced much more satisfaction, higher productivity, and self motivation by somewhat abandoning the old money-focused sales model and plugging into the employees’ vision. As the Greeks believed in Mind, Body, and Spirit, are all important aspects to a better and more productive life. Most of our days are spent at work, and should be, but so much more is being accomplished when the personal and cultural aspects of life can be integrated with the vision of the business.