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Are Monetary Rewards Effective?

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  • Written By: Lori Smith
  • Edited By: M. C. Hughes
  • Last Modified Date: 17 August 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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In many workplace cultures, monetary rewards are among the most effective ways to increase motivation and productivity. Sometimes, a cash bonus is offered to thank an employee for a job well done. It may also be used as an opportunity to boost creativity. When incentives are coupled with verbal expressions of respect and appreciation, morale can spike even more.

Money is the driving force of essentially all profitable businesses; leaders make most of their choices in the interests of earning capital. Employees view cash in a similar way. For this reason, people will generally work harder and more efficiently when a bonus or extra payout is possible. It makes the workday more challenging and can add some fun, competitive energy to an otherwise mundane task.

Employers most frequently offer monetary rewards to entice sales executives to exceed goals. To get the most benefit out of it, however, business owners can look beyond their sales force. Using a cash incentive to thank other employees for good work also has its benefits.

Instead of limiting monetary rewards to a certain group of individuals, employers can improve overall workforce motivation by expanding incentive opportunities to others. Receptionists, customer service agents and warehouse staff, for example, may be more willing to go beyond their normal job descriptions when cash incentives are available to them.

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If an individual completes an especially difficult project and receives an unexpected bonus for a job well done, he will feel that his hard work was appreciated. The next time a challenge presents itself, the employee is likely to respond enthusiastically, instead of shying away from it. This does not mean that a business owner must provide monetary rewards every day. He or she might benefit simply by offering them sporadically, whenever the situation warrants it.

Monetary rewards may also be divided among all staff within an organization when long-term goals are met. Some employers provide a yearly merit-based incentive bonus, while others may offer it twice a year. This is an excellent way to include all staff members and encourage them to work collectively toward a common goal.

While monetary rewards can be a welcome addition when added to a paycheck, this is not always necessary. Some employers prefer to deliver a specific award on the spot as opposed to a cash offering. An employee who earns special recognition may receive a voucher for a free dinner for two at an elegant restaurant, for example. This unexpected bonus not only encourages that specific individual to continue performing well, but it may entice others to follow suit.

Surprises are nice, but not all monetary rewards are unexpected. Sometimes, challenges are created to inspire personnel. A great way to do this is to implement a contest. For example, the employee who writes the best blog or article for the company's website can win a cash prize. This type of competition fosters creativity and gives everyone an opportunity to participate.

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