Employee Motivation Cash or Non Cash Incentives.

Human capital was considered just one of the factors affecting industrial production.  However, this thought has gone under change in the globalised world, where focus is much more now on human capital. Survival of organization is dependent of its motivated workforce. Therefore motivation and employee welfare are center point of many research worldwide.  Research has divided employee motivation on cash and non- cash incentives.  Dilemma for organization is to discover which type of incentive will propel organization to the next level.

Cash incentives are in form of pay hikes, bonus, paid vacation etc. Cash incentive is tangible asset motivating employee to achieve desire result or performance. It keeps employee on their toes knowing that a solid performance would ensure ample of monetary benefits. Research shows that in order to receive cash incentive employee may sometime use un- ethical business practice. This could compromise brand as well as existence of organization.  Also un-equal distribution of cash incentive among the same team could trigger tension among team-member. This sort of tension would create problem for organization in future. Also cash incentive could give rise to a stand- off for organization in difficult economic times, which is deciding whether to reward employee or the share holder.

Non- cash incentives are in form flexible work hours, acknowledgement of good work in front of colleagues, better work environment. Research shows that non-cash incentive has psychological effects; it helps in improving morale of the work force. Flexible work hours for single parent show compassion on part of organization, this gesture would have positive impact on employee.  However there could be a problem if employee compares non-cash incentive with cash incentive, as non-cash incentive is not economically measurable.  Which leads to question what is it that motivates employees cash or non- cash incentive?

 Answer may sound diplomatic, but the right solution may depend upon age of employee, his personal aspirations, stage of her career etc. A fresh graduate always aspire for rise in her salary in order to use to full economical value of cash incentive. But mature employee is much more concerned with quality of work, flexi work hours.  Therefore solution lies in a customized incentive program which balances both non cash and cash benefits.