Do incentives really work?

Business and their managers are constantly searching for ways to create a positive working environment that motivates employees to accomplish company objectives at optimal levels of productivity.Monetary incentives in the workplace are a $27 billion industry that reveals a shifting trend towards rewarding employees with something other than time off.We will look at both options and how they affect the workplace both positively and negatively.

Monetary Incentives
The purpose of monetary incentives is to reward excellent employee performance through money. Incentives can be in the form of bonuses, stock options, profit sharing, paid vacation time and smaller monetary payments associated with business wellness plans (smoking cessation, weight loss plans, and health awareness participation.) Traditionally these incentives have been considered perks to certain industries and the reason for staying in a job that may not have a strong salary scale.

The problem with monetary incentives is that they can cost the employer a lot of money and they don't always work. In most companies, monetary incentives are tied strictly to performance rather than creativity and ingenuity, (quantity rather than quality.) Sales bonuses can be used to compensate for poor management and employees tend to be driven to do things for the monetary reward rather than completing a task because it is the right thing to do. This can turn co-workers into competitors, making the workplace environment disruptive and negative. While friendly competition is great, non-friendly competition can quickly decrease employee morale and you can lose some of your best employees over it.

Non-Monetary Incentives
Employers are realizing quickly that retaining healthy, happy employees is in itself a valuable commodity.More and more businesses are working to offer creative benefits that will help retain quality employees without damaging the productivity bottom line The purpose of non-monetary incentives is to reward employees for excellent job performance through opportunities. This can include flexible work hours, additional training, wellness programs, and sabbaticals. Job satisfaction and pleasant working environments are among the most important bottom line decisions for younger employees. Older generations are more focused on their needs in retirement years, while the younger employees expect and need a tailored approach to keeping them healthy and secure in the workplace.

When providing company benefits such as wellness programs, smoking cessation classes and performance bonuses, monetary incentives are popular and often more effective.However, not all employees are motivated simply by a check. Their job satisfaction, motivation, and interest are based upon creative opportunities to grow as an employee and a person and non-monetary incentives can provide just such an outlet.

Some employees prefer to have an all expense-paid vacation over $500 because they think the trip has greater value. If you have the opportunity to select where you can go on your vacation, you may be right. However, the non-monetary incentives often come with a clause. Some of them are gift cards and they can only be used at certain stores. Others are paid-time off, but they cannot be used at a time when other employees are going on vacation. Be careful with non-monetary incentives and make sure you provide the rules before you just hand them over to your employees.

Whatever the decision is, employers are paying more attention to what their employees are asking for, whether it is monetary or opportunity for growth. It's a discussion worth having with a manager if you're looking for something more in your workplace environment. Take a minute to write down what you want, what is currently offered, and the benefit and problem with each of them. This will give your management team an opportunity to see what works best and open the door to changes.