Monetary & Non-Monetary Rewards, driving Employee Motivation in turn Achieving Organizational Objectives

Andleeb A. Joyia

Introduction

• Performance ManagementDirectionEnvironment & ValuesMotivationEngagementTalent ManagementAccountability

• 70% in Public & 63 in Private preferred management practices that motivated them to perform better

Motivation

General Longing to achieve something

Organizational Culture/ValuesAutonomy Financial Incentives

Cultivating Motivation The Best Practice

A study that paves the sample into three quartiles based in EBITDA that the top quartile experience real financial upside due to distinctive motivational practices. (Smet, Palmer & Schaningar, 2007)

Cultivating MotivationKeeping Abreast with Changing Needs

TQM practices to manage the organization’s reward system

• 75% of the 1000 largest US companies were using &

• 78% planned to increase the use in the near future.

Interdependent Essentials - Reward

• Reward type, • Reward system and • Reward criterion.

Interdependent Essentials - Reward

Non-Monetary – Intrinsic & ExtrinsicMonetary – Extrinsic

Non-Monetary Rewards

• Recognition to acknowledge achievement of goals such as, certificates, letters, complimentary tickets, etc.

• Celebrations such as, Lunches, dinners, special events, etc. • Regular expressions of appreciation by managers/leaders

to• 360’ performance appraisals • Participation in decision making and autonomy• Quality-based promotions rather than quantity-based

goals

Monetary Rewards

• Profit sharing • Bonuses • Compensation time• Individual-based Performance system• Quantity-based performance appraisals

Advantages of Monetary Rewards

• Former CEO Avon, hicks Waldron said “people do what you pay them to do, not what you ask them to do”

• Not surprisingly, organizations that provide higher pay levels and tie it to performance, achieve high profitable returns

• they help meet the basic needs of life; food, shelter and clothing.

• They ensure wellbeing of familial life and raise social status standards.

Disadvantages of Monetary Rewards

• They don’t improve the KSAs of employees• They do not contribute to job enrichment• Sometimes, these trigger unethical and

counterproductive behaviors at the part of the employee

Best Practices

• Standardize a quantifiable method to measure performance with approximate accurately

• Reward employees in a timely manner based on regular performance evaluations and feedback

• Promise deliverable rewards only and communicate to employees timely

• Use a blend of monetary and non-monetary rewards – so as to maximize performance.

Best Practices

• Standardize a quantifiable method to measure performance with approximate accurately

• Reward employees in a timely manner based on regular performance evaluations and feedback

• Promise deliverable rewards only and communicate to employees timely

• Use a blend of monetary and non-monetary rewards – so as to maximize performance.

Culture and RewardsRegional, National, Religious, Geographical

Reward preferences vary from culture to cultureMasculine Culture - IndividualistFeminine Culture - Collectivist

Individualists prefer Monetary rewardsCollectivist prefer Non-Monetary

Culture and RewardsUK, Canada, Finland and Hong Kong, divided by Masculine,

Feminine, Individualistic and Collectivist cultures

• In general Finland (Feminine culture) was found differing. Finland-UK, Finland-Hong Kong and Finland-Canada comparisons reveal that inclination towards the non-monetary rewards, held more preference for feminine cultures.

• Masculine Cultures like Hong Kong preferred financial benefits more.

• All the same, the Finnish did not fancy extrinsic rewards, as much as the Canadians (Masculine and Individualistic culture).

Reward Climate and SQO

The rule of reciprocity in creating Job satisfaction and organizational commitment

• According to the law of reciprocity the more the organizations accommodate employee needs and rewards their efforts, the more the employees strengthen socio-emotional bonds.

Conclusion

• Quality performance is driven by Motivation • Motivation is driven by Rewards• Reward Preference varies from culture to culture

• Monetary rewards have both, pros and cons• The blend of Monetary and non-monetary rewards is

considered best practice in driving employee motivation