Motivational factors: Monetary vs Non-Monetary factors (Advantages of a…
Motivational factors: Monetary vs Non-Monetary factors
Managers are consistently searching for ways to maintain an environment where employees achieve the optimal level of task and objectives, to reach the goals of of the business.The workplace uses a variety of monetary and non-monetary methods as incentives to keep employees well motivated
Advantages of a motivated work force
More likely to provide good customer service
Usually productive,which may lead to a lower cost per unit and therefore more opportunities for profit
Lower levels of absenteeism and/or lower staff turnover- less training when staff retention is high
Less likely to embark an industrial action
Happy workers will say positive things(Good word of mouth) about the business and this may improve the image of the business: more sales, easier to recruit top quality workers and other benefits associated with a strong brand
May have a positive impact on other departments in terms of boosting their morale as well
The purpose of monetary motivation is to reward employees for sound performance. These monetary motivations include: Profit sharing, project or scheduled bonuses, equity options, payment on commission basis, performance bonuses, additional paid vacation time
Traditionally this motivation method has helped maintain a healthy and highly motivated working environment
Monetary factors to consider include:
A salary increase only temporarily raise the motivation levels for some of the workers. Demotivated again if the prospect of a future increase is slim.
If money motivation is linked to performance and performance is inadequate, the monetary reward will be withheld
Monetary motivation encourages compliance to tasks rather than risk-taking because most rewards are based only on performance. As a result, employees could be discouraged from being creative in the working environment and could become performance or results driven.
Monetary motivation may be used to bypass problems in the workplace.. E.G: Motivation can lead to an increase in sales but employees could cut corners to reach targets
Employees may also use monetary motivation as an extrinsic rather tan an intrinsic motivator.( Driven to do things just for the monetary reward versus doing something because it is the right thing to do.) Can disrupt relationships between employees and management because they are transformed from co-workers to competitors. E.G: Sales personnel may entice customers away from a colleague in order to reach a sales target and gain the commission.
In many cases non-monetary motivation are emotional factors with employees seeking affirmation and recognition
Many aspects such as employee personality, skills level and years of experience may or may not apply to or motivate an employee.
The purpose of non-monetary motivation is to reward employees for sound work performance by providing them with motivational factors such as:
Job enlargement: Additional tasks added to original job may motivate employee if he/she feels the job is monotonous. Ensure employee does not become demotivated when he/she feels more work has to be done for the same salary
Job enrichment: Employee gets more responsibility and often more authority. The employee thus feels he/she is trustworthy, and on a personal level he/she may believe it is possible to achieve his/her full potential. Additional training may be necessary to ensure skill levels match the requirements of the task
Empowerment and advancement of the employee by learning new skills and gaining wider knowledge. When they are offered new challenges and responsibilities, they will feel that it is a win-win situation as the business gains from their new competencies and they may have more to add to their CV'S.
Flexible hours: Allowing employee to decide which hours should be allocated for work and various activities, motivation levels in all probability will increase to get to work done efficiently, speedily and to high standard.
Recognition of good work should preferably be done openly in front of office colleagues, while reprimanding an employee(also a form of motivation) should be done in a closed office in private.
One form of recognition is the "employee of the week/month" programs that some businesses use. Employees are more motivated when they feel appreciated. This can be achieved through recognition, but also by allowing employees to be part of a successful team, including them in decision making(where appropriate) and by respecting their opinions.
Some employees prefer precise instructions for tasks to be carried out which can increase motivation levels/ job performance. Others may prefer to work independently without constant supervision/questions about their performance
Wellness programs such as child care facilities, time off, assistance with household problems such as bursts geysers, free parking or gym membership may also motivate some employees
Balance between monetary and non-monetary motivation
Monetary and non-monetary motivations vary in their roles, effectiveness and appropriateness, depending on the type of motivational factors
When deciding on motivational factors one must take into account the workers for whom they are created. Motivational factors must be tailored to the needs of the employees rather than using the "one-size-fits-all" approach, which is impersonal and sometimes ineffective. It is important for management to know their employees and what drives each individual within the business
Motivation has the potential to actually hamper employees and companies by decreasing employees and employers motivation, interest, and job satisfaction. This is the opposite of what the motivation was created to achieve.
A balance between monetary and non-monetary motivation should be used to satisfy the diverse needs and interests of employees.
Consider Maslow's Hierarchy of Needs as this may assist in deciding which motivational factors are most appropriate for a specific employee