Human Resources
Even today, there is a debate on the significance of monetary and non monetary incentives that organizations continue to impart to its personnel in order to increase motivation among its workforce. Various empirical studies have highlighted the importance of monetary incentives to motivate workers (Prendergast 1999). Recent studies conducted by Shearer (2004) and Lazear (2000), has observed fierce effects of motivation on monetary incentives. There is evidence of many workers who finds moral concerns and task enjoyment to be more important than monetary incentives (Minkler 2004).
Research aim
This academic project tries to establish the importance and relevance of non monetary awards in today’s scenario. The immense literature on the contribution of non monetary awards is explored and then associated with the role they play in enhancing the performance of employees.
Research goals
a) The need for non monetary awards
b) The role played by non monetary awards in increasing performance and motivation among personnel. This will be practically demonstrated by means of surveys.
c) The various mechanisms which firms employ in order to keep their internal customers happy and satisfied
d) Human resource management entails not only hiring attractive talent; but also retaining them. Here we find out the contribution of non monetary rewards in successful retention of human capital.
In this study we will find out the importance of non financial rewards in enhancing motivation and performance of employees. For this purpose, we will research on a particular organization, and by means of surveys and interviews will find out whether non monetary rewards help to motivate and enhance employees’ performance.
Literature review
Rewards not only directly impact the perceptions, behaviour and attitudes of an employee in diverse manners but also indirectly affect the effectiveness and efficiency of an organization. The most important organizations issues like low turnover and absenteeism at work, commitment and performance can be enhanced by means of an effective reward system.
Non monetary rewards and performance
Non monetary incentives provide opportunities to reward personnel for their outstanding performance in the workplace. These incentives may include training, flexible working hours, sabbaticals and pleasant environment in the workplace. Academic research conducted on the use of motivational measures by managers in Sweden, found that more than sixty percent of the managers in this nation employ 'good management-worker relations' to a large extent. Also in industries where the most common form of motivation is performance related payment, only seventeen percent of the managers use payment as a motivational measure to a large extent (Agnell 2004).
Organizations use diverse measures and tools in order to motivate employees to perform better. Tangible rewards, job related elements or social practices are also used by many firms as a method of motivating employees. For such type of tangible rewards personnel are not paid in cash and hence these are known as non monetary incentives or non financial incentives.
Recognition - A powerful tool for enhancing performance is recognition. Recognizing efforts of employees by verbal praise in front of co workers helps in boosting performance. In case of teams, the superiors often praise the team which has performed excellently in front of the entire office. The human resource department also may arrange team lunches which facilitates informal discussions.
Reinforcement – Another powerful tool which is used by managers is reinforcement. Most superiors utter a verbal word of praise like ‘well done’ or ‘good job’ as a means to boost employee morale. By following this, the superiors reinforce and encourage positive behaviours in order to garner excellent performance from personnel.
Other non monetary awards - Other than these, there are tangible award options like coffee mugs, desk accessories, wall plaques, clothing, watches, rings, trophies, tie pins, discounted goods, gift certificates and key chains. Social non monetary awards are associated with boss subordinate relationship and the other social tasks in the firm. They are also given depending on the degree of formal or informal recognition for a job well performed, diverse social tasks which requires a team of personnel to take part and celebrate an event or activities which helps to release organizational stress. Social non monetary awards help to develop a favourable working climate wherein each and every employee feels themselves as being a part of the organization.
All these non financial rewards help to motivate employees without involving any monetary incentives or cash rewards. Job having a plethora of tasks, autonomy, responsibility, involvement of employees in the decision making process, development of opportunities and flexible working period of time helps in satisfying the needs of personnel and helps employees to believe that the job is satisfying and this makes them put more effort in performing the task without any external rewards. However, organizations must keep in mind that the basic monetary requirements up to the level of subsistence must be fulfilled by providing a suitable salary and income to the employee for a non monetary reward to be effective.
a) Non monetary rewards help in boosting the moral of personnel and make them feel important
b) Non monetary awards helps in creating a competitive organizational climate which helps people to be motivated to enhance performance
Methods and analysis of data
Scientists explain research as a systematic and scientific quest for data on a certain subject or topic. There are other believers who believe research to be a shift from trying to learn information not yet known. The current project has used the survey method to collect relevant data.
The researcher has conducted a survey of 20 employees in an organization and the results and finding of the survey is discussed here. The first question asked was whether employees felt that non monetary rewards helped in boosting morale and enhancing performance. For this question, an affirmative vote was given by all the employees. The second question asked was whether certain reinforcements helped to enhance performance. The result is displayed by means of a graph. From the graph, it can be observed that the organization does respect and recognize excellent attendance and service tenure by rewarding such personnel. Also most personnel feel that the firm gives due respect for the work performed and also gives formal recognition to employees in order to boost morale and enhance performance.
The third question asked was whether such reward systems were successful. Most personnel gave an affirmative ballot (40%) and there were a few who remained neutral (60%).
The next question asked where whether the firm provided some specific activities to boost performance. At least 60 % of the respondents answered that recognition was one of the most helpful ways to boost performance whereas the remaining 40% opted for all the methods maintaining that recognition, annual award ceremonies and team lunches helped to enhance performance.
Conclusion
Despite this fact, the importance of non financial rewards like attention and recognition for better performance has been overlooked for quite some time. In fact effective leaders use the second tool to motivate, reward and reinforce favourable behaviours to garner enhanced levels of performance. The notion of using non financial rewards for attaining enhanced performance has been applied frequently and consistently by means of informal and formal recognition systems and procedures so that the management is able to influence personnel to stick to the values of the organization and implement the objectives of the firm.
Works Cited:
Agell, J. “Why are small firms different? Managers’ views”. Scandinavian Journal of Economics, 106(2004), 437–452. Print.
Lazear, E. P. “Performance pay and productivity”, American Economic Review, 90(2000), 1346–1361. Print.
Minkler, L. “Shirking and motivation in firms: Survey evidence on worker attitudes”, International Journal of Industrial Organisation, 22(2004), 863–884. Print.
Nelson, B. “Motivating employees with informal awards”, Management Accounting, 77.5 (1995), 30. Print
Prendergast, C. “The provision of incentives in firms”, Journal of Economic Literature, 37.1 (1999), 7–63. Print.
Shearer, B. “Piece rates, fixed rates, and incentives: Evidence from a field experiment”, Review of Economic Studies, 71.2(2004), 513–534. Print.
