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Non Monetary Rewards
Non Monetary Rewards
Pragya Sonawane
Pragya Sonawane is from Tata Institute of Social Human beings have constantly
Sciences, Mumbai 400088 endeavoured to stretch beyond potential.
E-Mail:pragyasonawane@yahoo.com Issues related to improving efficiency
have always intrigued the human mind ment, opportunity to use ideas,
and whether it is Adam Smiths Division opportunity to offer suggestions at work
of Labour or Taylors Scientific Manage- and appreciation of ones efforts. In
ment, theories have been conceived another study by W.W. Ronan (1970) it
towards improving efficiency. The use was found that the job characteristics
of non-monetary factors, however, could that were important to a diverse group
be traced to the post Human Relations of employees were related to the nature
School of management thought. The of work they do and satisfaction that they
serendipitous results of the Hawthorne obtain from it.
experiments indicated the presence of
factors other than monetary and
Job is meaningful for employees if
physiological variables and their impacts
it involves them in the identification
on employee productivity. These
and solution of the problems that
findings opened a new chapter and
affect them.
revolutionized the field of management
research.
Meaningful Work
Lindhal (1949) conducted a series of
researches where employees consistently According to researches conducted
ranked items such as full appreciation in the field of meaningful work, a job
for work done, feeling in on things, is meaningful for employees if it
and interesting work as being more involves them in the identification and
important to them than the traditional solution of the problems that affect them.
incentives (cited in Nelson 2001). Other It is said that if the worker could voice
researchers like Kovach (1980) and his/her opinion, it would bring positive
Wilson (1988) later replicated these results for both the worker and the
findings. In their survey of sixteen organisation. (Roche & Mackinnon
studies including over eleven thousand 1970)
employees, Herzberg et al. (1957:46)
concluded that the average worker ranks A study on job preferences of over
pay sixth in importance behind security, fifty-seven thousand job applicants,
interesting work, opportunity for conducted over a period of thirty years,
advancement, appreciation, company indicated security, advancement
and management, and intrinsic aspects opportunity and type of work, as the job
of the job. Kellers (1965) study to factors most important to men. Women
identify the job factors important to employees considered type of work,
employees found eight factors none of company and security as the most
which related closely to monetary important job factors in deciding
rewards. The eight factors were job whether their job is good or bad. Both
satisfaction, pride in organisation, men and women ranked pay lower to
relation with fellow workers, relations advancement opportunity and type of
with superiors, treatment by manage- work (Jurgensen 1978).
(2003) that non- monetary rewards play formance appraisal as the two critical
an important role in controlling staff determinants of organisational commit-
turnover. Banker et al (2000) confirm ment (Sharma & Joshi 2001). This was
that firms are increasingly adopting non- despite the fact that the respondents had
financial incentives. Mushrush (2002) asserted money and welfare as the
identifies lack of non-monetary rewards most neglected dimensions of human
as an important cause for employee resource management in the organi-
turnover. (cited in Essayarchive.com). sation.
Strategic Rewards Survey done by
Watson Wyatt of about 410 employers The use of rewards to motivate
in 2000 found that employers were using performance has also been studied. In a
non-monetary rewards more than what meta-analytic review of researches (45
they used a year ago (Watson Wyatt, researches conducted over a period of 40
2006). The three most prevalent non- years), it was claimed that the average
monetary rewards identified were effect of incentives on all tasks in all work
Advancement Opportunities (76%, up settings was a 22% gain in performance.
from 60% in 1999), Flexible Work The study reported that monetary rewards
Schedules (73%, up from 64%) and tend to influence performance more than
Opportunities to Learn New Skills (68%, non-monetary rewards. The performance
up from 62%). Nelson (2001) explored gains for money were (27%) twice the
the conditions that enabled or inhibited average gains from non-monetary
the use of non-monetary rewards by rewards (13%). However, it was asserted
managers. His findings suggested that that the findings should be viewed with
managers who were high users of non- caution, since the number of monetary
monetary rewards, had an initial positive rewards studies were four times the other
experience with the behaviour, which studies. Moreover, the actual cash value
had made them more likely to use non- of the non-tangible gifts was not
monetary rewards with their employees ascertained (Condly et al. 2003:46-63).
themselves and other colleagues. Sheryl
and Don Grimme from the Employee Major Benefits
Retention Headquarters (US) have
worked on projects which emphasize the Jeffrey (2003) cites three major
importance of non-monetary rewards benefits of non-monetary rewards;
(Sheryl and Don Grimme 2001). Separability, Memory Value and Trophy
Value. A study conducted in a public
Studies conducted in India in the sector organisation in Turkey suggested
field of organizational commitment that employees valued non-monetary
show non-tangible extrinsic rewards to rewards as much as monetary rewards.
be critical in determining organizational The employees claimed that the usage of
commitment. A study in a manu- non-monetary rewards was inadequate in
facturing organisation in the private their organisation and that they look
sector reported job content and per- forward to such initiatives. It was claimed
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Fig. 2
Factors Influencing Non-monetary Rewards Philosophy & Practices
presented platforms where desired monthly targets. It was the small card
behaviours could be reinforced in the given by the senior or an appreciation
employees. Recognition at various in a meeting that influenced the
forums, made employees feel that the everyday working the most. Non-
organization cared for them and that monetary rewards were thus important
their efforts were being acknowledged. in day-to-day functioning of employees
It was asserted by the managers that such while monetary rewards were important
feelings of belongingness and loyalty for doing justice to the transaction
could be developed only through the use contract between employee and the
of non-monetary rewards. organisation.
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