Non-Financial Incentives

Incentives which cannot be offered in terms of money are known as non-monetary / non-financial incentives. Often money alone is not sufficient to satisfy higher level needs such as status, recognition, realization of one’s potential etc. People working at higher levels do not always work for money. They expect a challenging job, interesting work that grants them enough power to control environments, work that allows them to use their talents, fully. Over the years, organizations have developed a variety of incentives to meet the higher order needs of people working in the organization.
Individual Incentives:
1) Status: It is the ranking of position, rights and duties in the organization. Research indicates the fact that middle and higher level employees prefer escalations in status to increment in pay.
2) Promotion: It is vertical movement of a person in the organization. Promotions are accompanied by increased responsibilities enhanced prestige and power usually. Since promotions depend on good performance most employees try to attain these if the organization provides the opportunities.
3) Responsibility: People want to handle responsible and challenging jobs. If the job is responsible it satisfies people in more than one way.
4) Recognition of work: Managers can motivate people by using this in their ways to show appreciation when an individual does an outstanding job, compliment individuals in front of others, compliment individuals when the incident is still fresh in their mind. Recognitions and appreciation will have a tonic effect on psychology.
5) Interesting work: Jobs that are varied pleasant and enjoyable motivate people thoroughly. Such jobs allow people to satisfy their natural instincts. Work in such cases becomes as natural as play or recreation and stimulates people to reach greater heights
6) Job security: People want secure job. They want to be sure about their future income and job continuity. For the same reason, some people prefer government jobs to private jobs, where the security is good but not the income.
Group Incentives:
1) Social importance of work: People want jobs with high social status. They are prepared to accept such jobs, even when the pay is comparatively less. High Status jobs enhance the social status of an individual in the society e.g. Preferring to work in a foreign Bank rather than a good private financial institution.
2) Team spirit: People prefer to work in well-knit groups. Those organizations that encourage their employees to do the jobs in a cooperative manner attract people automatically. When team spirit is encouraged among employees they will put their maximum in the service of the organization
3) Healthy Competition: Promoting healthy competition among employees through carefully chosen reward schemes spurs people to work harder.
Organizational incentives
1) Participation: People prefer organizations that offer them good opportunities to participate in the decision making process. Participation enables people to offer valuable suggestions and concrete ideas and see that these are actually translated into action.
2) Sound Human relations: A positive work climate where people are treated as human beings is an important reward. It permits people to work with enthusiasm and spirit and contribute their best.
3) Morale: Morale refers to the atmosphere created by the attitudes of the members of an organization. Poor morale is an organizational malady. The warning signals to be noted here are in the form of absenteeism, tardiness, high turnover strikes and sabotage, lack of pride in work etc.
4) Communication and Discipline: Proper communication and good disciplinary procedures enable people to work with confidence and along the prescribed routes. The behaviour is consistent where goals and the chances of meeting the goals are high.
Source: HRM