Supervisory Leadership

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Why do non-monetary incentives work?

First of all, they don't always work. Before you can consider non-monetary incentives, you have to provide the best incentive of all, a good working environment. Unless folks have a solid basis in the workplace, no form of incentive (other than health benefits) seems to do much.

Effective non-monetary incentives must have value to the recipient. Give me and my wife a trip to Disney and it's a ho-hum. But give the same trip to my daughter and son-in-law and it's a high-value gift.

The big value of cash incentives is that you can use them for whatever you want. That's the downside, too. It's too easy for the big performance bonus to get lost in the checking account and pay the light bill. Good programs of non-monetary incentives give people a choice of possible incentives.

Finally, the best non-monetary incentives provide a reminder to the employee of the achievement that won the incentive. Some years ago I was spending the day with a salesperson when we stopped at his home for lunch.

During the time we were there he pointed out a TV and several pieces of furniture that he'd won from his company. He proudly noted each one and told me how he won it.


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