Business managers can motivate their workers in several ways. These rewards can be divided into financial rewards and non-financial rewards.
What are non-financial rewards?
Non-financial rewards, or non-monetary factors, are methods that a business organization can use to motivate its workers by using some form of non-monetary payments, or not directly linked to money.
As money is not the only reason why people go to work, business managers need to consider what psychological and intangible benefits to offer to achieve a well-motivated workforce.
If they can promote motivation without increasing the costs, then they should be considered as there are many links between motivation and how the work is organized, the style of management or corporate culture.
Popular non-financial rewards
The range of non-financial motivators is very extensive. The most common non-payment rewards include:
- Job rotation
- Job enlargement
- Job enrichment
- Job redesign
- Training
- Quality circles
- Teamworking
- Target setting
- Empowerment
Let’s take a look at them in details now:
1. Job rotation. Job rotation involves switching employees between different tasks to increase variety and flexibility. It reduces boredom, develops multi-skilling, but does not necessarily offer increased responsibility or complete tasks.
2. Job enlargement. Job enlargement broadens the scope of a job by adding more tasks at the same level of complexity. It reduces monotony, makes work more interesting, but can lead to feeling overloaded, may not offer long-term satisfaction unless combined with enrichment.
3. Job enrichment. Job enrichment focuses on providing employees with more challenging and meaningful work. It increases motivation, job satisfaction, and sense of achievement, but requires investment in training and development, may not be suitable for all tasks. Job enrichment includes:
a. Complete units of work. Allowing individuals to complete entire tasks for a sense of accomplishment.
b. Direct feedback. Providing ongoing feedback to enhance employee awareness of their progress.
c. Challenging tasks. Offering opportunities for learning and skill development.
4. Job redesign. Job redesign involves restructuring jobs, often with employee involvement, to make them more engaging and fulfilling. It increases motivation, ownership, and problem-solving skills, but requires careful planning and implementation, may not be suitable for all workplaces. This can involve:
a. Adding tasks. Introducing new responsibilities and challenges.
b. Removing tasks. Eliminating repetitive or mundane tasks.
c. Teamwork. Organizing work into teams for collaboration and shared responsibility.
5. Training. Training refers to providing opportunities for employees to develop new skills and knowledge. It increases career prospects, employee value, and motivation, but may lead to employees leaving for better opportunities elsewhere.
6. Quality circles. Quality circles are voluntary groups of employees who meet regularly to discuss work-related issues and propose improvements. They encourage employee participation, problem-solving, and ownership, but require time commitment and effective management involvement.
7. Teamworking. Teamworking means organizing work into teams to share tasks and responsibilities. It improves communication, problem-solving, and motivation through social interaction, but requires team-building skills, clear goals, and careful selection of team members.
8. Target setting. Target setting refers to establishing specific and measurable goals for employees to work towards. This is clearly related to the technique of Management by Objectives (MBO). It creates direction, motivates achievement, and allows for performance feedback, but can be demotivating if goals are unrealistic or solely focused on individual rewards.
9. Empowerment. Empowerment involves granting employees authority, resources, and opportunities to make decisions and take ownership. It increases motivation, responsibility, and a sense of accomplishment, but requires careful selection and training of employees, managers must be prepared to delegate effectively. You can read more about empowerment here: https://www.merriam-webster.com/dictionary/empowerment. Empowerment can be achieved through methods such as:
a. Worker participation. Worker participation involves actively encouraging employees to contribute to decision-making, fostering a sense of ownership and engagement. It enhances job enrichment, motivation, and responsibility. Additionally, workers’ deep understanding of operations can lead to better decisions. But, it is time-consuming, and may not be effective with autocratic managers who disregard employee input.
b. Delegation. Delegation involves assigning tasks and authority to lower-level employees, allowing them to take ownership and gain experience. It boosts morale, empowers individuals, and provides valuable career development opportunities. But, it requires careful selection of employees with the necessary skills and willingness to take on additional responsibilities. Ultimately, the CEO retains overall responsibility for success or failure.
c. Continuous Professional Development (CPD). Continuous Professional Development (CPD) involves providing ongoing training and development opportunities to employees, demonstrating the company’s investment in their growth. It increases employee loyalty, empowerment, and productivity, while helping them reach their full potential. But, training costs, and the possibility of employees using newly acquired skills to find better opportunities elsewhere.
While non-financial rewards are necessary to encourage work effort, they alone may not always be sufficient to ensure that workers are motivated to work to their full potential. Therefore, other financial methods need to be considered.
