Question

Explain any four non-financial incentives.

Hint:

Non-financial incentives satisfy psychological and social needs.
They include: Status, Career Advancement, Job Enrichment, and Employee Recognition.

Answer 1

Concept:

• Incentives are all measures used to motivate people to improve performance. These can be financial or non-financial.

• Non-financial incentives focus on providing psychological and emotional satisfaction rather than direct monetary gain.

• They are particularly effective for employees at higher levels of management where basic needs are already met.
Step 1: Status
In the organizational context, status means ranking of positions in the organization.
The authority, responsibility, rewards, perquisites, and prestige of a job indicate the status of the person holding that job.
Psychological, social, and esteem needs of an individual are satisfied by status given to their job. For many, a higher title or a private cabin is a greater motivator than a small raise.

Step 2: Organizational Climate
Organizational climate indicates the characteristics which describe an organization and distinguish it from others.
These characteristics influence the behavior of individuals in the organization. Some of these characteristics are individual autonomy, reward orientation, and consideration for employees.
If the climate is positive and supportive, it acts as a strong motivator for employees to perform their best and stay loyal to the firm.

Step 3: Job Security
Employees want their job to be secure. They wish for a certain stability about future income and work so that they do not feel worried about these aspects and can work with a focused mind.
However, there is a negative aspect of job security. When people feel that they are not likely to lose their jobs, they may become complacent.
In spite of this, for most employees, knowing that their livelihood is not at immediate risk is a fundamental non-financial motivator.

Step 4: Employee Recognition Programmes
Recognition means acknowledgment with a show of appreciation. When such appreciation is given for the good work performed, employees feel motivated to perform even better.
Examples of recognition include congratulating the employee for good performance, displaying their name on a notice board, or giving certificates/mementos for achievements.
This fulfills the ego and self-esteem needs of the employees, making them feel valued by the organization.