Non financial methods of motivating employees

Some employers choose to offer extra financial rewards to employees, such as bonuses and commissions, to motivate workers to be more productive. Despite the potential to increase productivity, performance-based incentives can have negative effects on businesses. Inconsistency One drawback of motivating employees with financial rewards like bonuses and commissions is that such rewards are often inconsistent. For example, if a small business has a profitable year, it might be able to reward all of its workers with large annual bonuses.

Non financial methods of motivating employees

Non financial methods of motivating employees

Read this article to learn about Employee Motivation: Financial and Non-financial Techniques of Staff Motivation! Regardless of which theory of employee motivation is followed, the research studies on motivation conclude that interesting work, appreciation, pay, good working conditions, and job security are important factors in helping to motivate.

For enhancing motivation in your organization first study the following: After above actions device the techniques. Financial techniques refer to monetary rewards.

Money as a Motivator

Incentives are nothing but the inducements provided to employees in order to motivate them. There should be direct relationship between efforts and rewards, financial reward should be substantial in value and must be in parity with others. Money is not a prime motivator but this should not be regarded as a signal to reward employees poorly or unfairly.

The financial incentives include: It includes basic pay, grade pay, and dearness allowance; travelling allowance, pay increments, etc. Good pay and allowances help the organization to retain and attract capable persons.

However, good pay and allowances need not motivate all the people, especially who are enjoying security of job in government organizations and those for whom corruption is a way of life. Incentive pay plans are meant to increase output, which can be measured quantitatively.

For incentive plan targets, the employees must have confidence that they can achieve the targets.

Non financial methods of motivating employees

It is a reward system in which team members earn bonus for increasing productivity or reduce wastages. It means sharing of profits with the employees by way of distribution of bonus. Profit sharing plan has its shortcomings — one, that it has become a regular feature in government departments irrespective of performance and two, it may have no relation with individual efforts.

Many companies use employee stock options plans to compensate, retain, and attract employees. Employees who are granted stock options hope to profit by exercising their options at a higher price than when they were granted. In India, stock options have primarily been used as a retention tool for a more selective group of employees.

It includes the accumulated provident fund, gratuity, leave encashment and pension. Non-financial incentives do not involve money payments. These are also important in motivating employees as they bring in psychological and emotional satisfaction to them.


These include so many techniques. People do work for money-but they work even more for meaning in their lives. In fact, they work to have fun. Some of the important non-financial incentives include: Nothing can motivate a worker, appointed temporarily, better than provision of job security.

Even if a temporary worker puts in greater efforts, lack of job security will always pose a threat. If such a worker is given job security, he will be more committed to the organization.Although some theorists like Herzberg believe that money is not a positive motivator (although lack of it can de-motivate), pay systems are designed to motivate employees.


The scientific / Theory X approach, in particular, argues that workers respond to financial rewards. The non-financial methods of motivation and empowerment: Job rotation, Job enrichment, Job enlargement, Flexible working, Team building,Team working, Work councils, Goal and targeting setting, closer to the employees and try to share of their own problems, meet with all employees at least on per year on the occasion determined by the management.

The impact of Non-Financial Incentives on employees’ motivation 38 | Page financial incentives. Financial incentives include direct payment of cash and while non financial incentives may Employee‟s Motivation Non Financial Incentives Recognition of work Autonomy Feed Back Promotion & Career.

the most effective ways of motivating employees with financial and non-financial means. The final question is: how and in what ways can managers motivate their employees to make them. A possible negative effect is that job enlargement can be viewed by employees as a requirement to carry out more work for the same pay!

Job rotation. Job rotation involves the movement of employees through a range of jobs in order to increase interest and motivation. attempt to motivate employees but disregard the essential nature of human motivation. Businesses implement motivation programs that Non-financial recognition is a method of identifying either individual employees or teams for particular praise or acknowledgement.

The size, scope and formality of non-financial.

Employee Motivation: Financial and Non-financial Techniques of Staff Motivation