MOTIVATION THROUGH NON-MONETARY

INCENTIVES

TABLE OF CONTENTS

LIST OF TABLES

TABLE 1 5

TABLE 2 6

LIST OF FIGURES

FIGURE 1 3

FIGURE 2 8

1. INTRODUCTION 1

2. LITERARY REVIEW 2

2.1 COMPARISON OF MONETARY AND NON-MONETARY 2

INCENTIVES

2.2 PROBLEMS WITH MONETARY INCENTIVES 2

2.3 THEORIES WHICH SUPPORT INTRINSIC MOTIVATION 3

2.4 INTRINSIC MOTIVATION BY NON-MONETARY 4

INCENTIVES

2.5 NON-MONETARY INCENTIVES 6

3. PRACTICES IN ORGANISATIONS 7

3.1 FLEXTIME 7

3.2 PROFESSIONAL DEVELOPMENT 8

3.3 FEEDBACK 8

3.4 TANGIBLE REWARDS 9

3.5 WORK ENVIRONMENT 12

3.6 ATTENTIVE EMPLOYERS 12

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 3.7 AUTONOMY 12

3.8 REDESIGNING OF JOBS 12

3.9 RETIREMENT PLANNING 13

4. CASE STUDIES 14

4.1 MOTIVATION OF HEALTHCARE WORKERS FOR 14

BETTER SERVICE

4.2 HOW A UPS MANAGER CUT TURNOVER 15

5. CONCLUSION 17

6. REFERENCES 18

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1. INTRODUCTION

The term “motivation” was originally derived from the Latin word movre,
which means “to move”. But this one word is insufficient to describe the processes
with how human behaviour is activated. Given below are some representative
definitions of motivation…..
• The contemporary (immediate) influence on the direction, vigour, and
persistence of action (Atkinson, 1964)
• It deals with how behaviour gets started, is energized, is sustained, is directed,
is stopped, and what kind of subjective reaction is present in the organism
while all this is going on (Jones, 1955)
• A process governing choice made by persons or lower organisms among
alternative forms of voluntary activity (Vroom, 1964)
• Motivation has to do with a set of independent/dependent variable
relationships that explain the direction, amplitude, and persistence of an
individual’s behaviour, holding constant the effects of aptitude, skill, and
understanding of the task, and the constraints operating in the environment
(Campbell & Pritchard, 1976)
Summarising the fore mentioned definitions, Motivation is the process that
accounts for an individual’s intensity, direction, and persistence of effort toward
attaining a goal. Thus from the various definitions it can be seen that primary
concerns while discussing motivation are what energises, channelises, and sustains
human behaviour. By definition, managers are individuals who achieve goals through
other people. The saying “If you want something done right, do it yourself” is very
true as it is very difficult to find people who could do a challenging job well than to
do it yourself. But unfortunately managers can’t step in for their employees who are
not performing well. They have the unenviable task of nurturing necessary
competencies and commitment in their employees. More often the employees are
competent enough to complete a task but they don’t have the motivation to do their
job to their potential. A recent Gallup poll found that a staggering 55% of employees
in the most powerful nation were found to have no enthusiasm for their work. The
necessity to motivate the employees is inherent in the primary objective of any
organisation-increasing profit. It is an established fact that satisfied and highly
motivated employees contribute their best in the workplace. Thus the profits are
maximised. Research findings have found many ways to motivate the employees in
their workplace. Apart from deploying financial and physical resources, every
organisation must utilize its human resources effectively. Motivation enables an
organisation to do so. Employees must be attracted to remain in an organisation. They
must perform the tasks for which they have been hired must do so in a dependable
manner. They must go beyond this dependable role performance and engage in some

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form of creative, spontaneous, and innovative behaviour at work-a set of behaviours
commonly called “extra-role behaviour.” So for all these we need motivation.
Motivation can be achieved extrinsically by monetary incentives, or through
punishments and intrinsically through non-monetary incentives. This paper discusses
the scope of non-monetary incentives in motivation of employees.

2. LITERARY REVIEW

“People won’t change their behaviour unless it makes a difference to

them to do so”

Managers are individuals who achieve their goals through other people. They
are constantly searching for ways to motivate their employees to make them work at
their optimal level of performance to accomplish the company objective. Various
incentives are provided by the managers to their employees for motivation. The
incentives that are provided by the mangers to their employees can be broadly
classified as monetary incentives and non-monetary incentives.

2.1 Comparison of monetary and non-monetary incentives

The purpose of monetary incentives is to reward associates for excellent job
performance through money. Monetary incentives include profit sharing, project
bonuses, stock options and warrants, scheduled bonuses (e.g., Christmas and
performance-linked), and additional paid vacation time. Traditionally, these have
helped maintain a positive motivational environment for associates. Monetary
incentives can be diverse while having a similar effect on associates. One example of
monetary incentives is mutual funds provided through company pension plans or
insurance programs. Because it has been suggested that associates, depending on their
age have different needs pertaining to incentives, traditional incentive packages are
being replaced with alternatives to attract younger associates. On the other hand, the
purpose of non-monetary benefits is to reward excellent job performance through
opportunities. Non-monetary incentives include flexible work hours, training, pleasant
work environment, and sabbaticals.

2.2 Problems with monetary incentives

“Managements have always looked at man as an animal to be

manipulated with a carrot and stick. They found that when a man is
lured/hurt, he will move to get the prize/avoid the pain-and they say,
‘We‘re motivating the employees.’ Hell you are not motivating them,
you are moving them.”*
-Frederick Herzberg, Professor Emeritus

Monetary incentives usually encourage compliance and achievement of

difficult targets instead of encouraging creativity, innovation and foresight which are
more important in the long run. Thus employees are not able to express their true

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talent and in the long run lose their creativity. Employers also may use monetary
incentives as an extrinsic rather than an intrinsic motivator. In other words, associates
are driven to do things just for the monetary reward versus doing something because it
is the right thing to do. This can disrupt or terminate good relationships between
employees because they are transformed from co-workers to competitors, which can
quickly disrupt the workplace environment. Another problem with monetary incentive
is that it is given to circumvent a bigger problem for a short run. Sales employees are
given higher monetary incentives to compensate for poor management and poor
products, employees are paid more for working in poor work environment. Monetary
incentives can even drive the employees to falsely reporting their achievements. Huge
monetary incentives given to middle mangers are seen as a hook to retain them which
may make them work counterproductively. Though the monetary incentives have a
better effect than the monetary incentives in the short run, they fail miserably in the
long run and in extreme situations downfall of the company (when employees start
anticipating monetary incentives even for routine jobs and in absence of which they
start working inefficiently or go on a strike as in the case of some government
employees). Also most of the non-monetary incentives are intrinsic in nature. Intrinsic
motivation is more effective as the impetus to work is from within. Employees are
working because they feel satisfied or fulfilled by the activity they undertake. Under
these circumstances the management can be regarded as more of a support than
control. So managers should concentrate more on non-monetary incentives after the
minimum level of monetary benefits and properly structure them according to their
employee’s preference. This will ensure high motivational level of the employees
which will get reflected in their better performance at work.

2.3 Theories which support intrinsic motivation

Various theories that support the concept that intrinsic motivation which is
attained through non-monetary incentives is important and better than extrinsic
motivation are as follows:

• Maslow’s Hierarchy of needs

This theory states that the needs of social, esteem and self actualisation are
higher order needs. The differentiation between the higher order needs and
lower order needs is that the higher order needs are satisfied at the individual
level whereas the lower order needs are satisfied externally.

• Herzberg’s two-factor theory

It supports the emphasis on factors associated with work like promotional
opportunities, opportunities for personal growth, recognition, responsibility,
and achievement which employees find intrinsically rewarding

• McClelland’s Theory of Needs

This theory focuses on three needs: achievement, power and affiliation. They
are defined as follows
Need for achievement: The drive to excel, to achieve in relation to a set of
standards, to strive to succeed.
Need for power: The need to make others behave in a way that they would not
have behaved otherwise
Need for affiliation: The desire for friendly and closely interpersonal
relationships.

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 Feedback

Achievers
Responsibility Moderate risks

Figure 1: Matching achievers and non-monetary incentives

• Cognitive evaluation theory

This theory states that allocating extrinsic rewards for behaviour that had been
rewarding intrinsically leads to decrease in overall level of motivation. Thus it
supports the view that it is better to continue intrinsic motivation to boost the
morale of employees.

• Goal-Setting theory
This theory supports the idea that specific and difficult goals with feedback
lead to higher motivation and performance.

• Self-efficacy theory(Social cognitive theory)

It is the individual’s belief that a task assigned can be done. Higher the self
efficacy higher is the confidence of the employee at the workplace.

• Reinforcement theory
This theory states that the behaviour is a function of its consequences. If
employees feel that their efforts are duly rewarded then they will work in a
more effective manner for the organisation.

• Equity theory
This theory states that individuals compare their job inputs and outcomes with
those of others and then respond to eliminate any inequities. If their colleagues
are given recognition employees will work towards achieving those rewards.
This motivates them to perform them to work better which beneficial to the
organisation.

• Expectancy theory
The strength of a tendency to act in a certain way depends on the strength of
an expectation that the act will be followed by a outcome and on the
attractiveness of that outcome to the individual. Thus when expectations from
a employee increases the employee responds with better performance.

From the above theories (however different they may be) it is clear that intrinsic
motivation is desired by the employees.

2.4 Intrinsic Motivation by non-monetary incentives

Various non-monetary incentives motivate employees intrinsically which is
more efficient than the extrinsic motivation. The intrinsic motivation that these
incentives offer is the result of intrinsic rewards of self management.

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Self management
In employee’s perspective self-management is choosing activities, monitoring
competence, committing to purpose and monitoring progress. The intrinsic motivation
that energises the work comes directly from the four management events namely
activities, purpose, opportunities and rewards. From these four events the employees
make a judgement –of the meaningfulness of the task purpose, the degree of choice
available in selecting activities, the competence with which the activities are
performed, and the amount of progress being made to the task purpose. The
judgements from self-management lead to intrinsic rewards which in turn provide the
energy for self- management which completes the cycle.

OPPORTUNITY ACCOMPLISHMENT
Rewards Rewards

From task Sense of Sense of

ACTIVITIES CHOICE COMPETENCE

From task Sense of Sense of

PURPOSE MEANINGFULNESS PROGRESS

Table 1: Intrinsic
rewards of self-
management

• Sense of meaningfulness
It is the opportunity that makes the employees feel that they are on a path that
is worth the energy and time-that they are on a valuable mission that matters in
the larger scheme of things.

• Sense of choice
It is the opportunity that the employees feel to select task activities that make
sense to them and to perform them in ways that seem appropriate to them. The
feeling of choice is the feeling of being free to choose-of being able to use
their judgement and act out of their own understanding of task

• Sense of competence
It is the accomplishment that employees feel in skilfully performing task
activities that have been chosen by them. The feeling of competence involves
the sense that they are doing good, high-quality work on a task.

• Sense of progress

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 It is the accomplishment felt in achieving the task purpose. The feeling of
progress involves the sense that the task is moving forward, and their activities
are really accomplishing something.

2.5 Non-monetary incentives

The non-monetary incentives desired by employees across generations have
gone rapid changes. The following table shows the preferences in non-monetary
incentives across generations.

Baby Boomers Generation X’ers Generation Y’ers

(born between 1946-63) (born between 1964-81) (born after 1982)

Retirement planning Flexible schedules Flexible schedules

Flexible schedules Professional development Professional development

Job training Feedback Feedback

Sabbaticals Tangible rewards Tangible rewards

Work environment Work environment

Attentive Employers

Autonomy

Table 2: Preferences in non-monetary incentives across generations

Thus it is obvious that the demands of the current generation of employees are
ever increasing and in current scenario where there is low loyalty to the companies,
high attrition rate these demands have to be met reasonably well to attract prospective
employees who can perform really well and to retain the employees.

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3. PRACTICES IN ORGANISATIONS

Various non-monetary incentives in Table 1 are affected by career stage and

proximity to retirement. The older the associate, the more the focus is placed on
retirement or supplementing retirement income with part-time or temporary jobs. The
younger the associate, the more the focus is placed on job satisfaction and the work
environment.

Types of non-monetary incentives

Various types of non-monetary incentives are as follows.
• Flextime
• Professional development
• Feedback
• Tangible rewards
• Work environment
• Attentive employers
• Autonomy
• Redesigning of jobs
• Retirement planning

and others.

3.1 Flextime
Flextime refers to several arrangements that allow the employee to work a
non-traditional schedule. The employee and the manager agree in advance on the
hours of work. Flextime is a popular option for good reason--it lends balance to busy
lives. Fortunately, flextime also benefits the manager too. Allowing employees to
work schedules that best suit their lives results in more productive workers. The most
common flextime arrangements include:

Compressed workweek
This arrangement allows the employees to work a full, 40-hour schedule in 4
days by extending the hours they work each day. The compressed week can also be
scheduled over 2 workweeks, during which they work 9 longer days and have the
tenth off. In any case, the compressed workweek maintains the same overall number
of hours, just divided up differently. The workload, benefits, and pay are not affected
by the arrangement.

Adjusted lunch

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 Working an adjusted lunch schedule doesn’t actually allow any additional
days off. Instead, he employees can take a longer lunch each day, making up the hours
at the beginning or end of the day. For example, he manager may allow the employee
to take your lunch from 11-1 so that the latter can run errands, go to a doctor’s
appointment, or work out, but in exchange the employee works that additional hour at
the beginning or end of your day. This sort of arrangement may be an unofficial
privilege of every worker, especially if it’s used only occasionally.

Core hours
Next to the compressed workweek, this is the most popular scheduling
strategy because of the flexibility it offers. With this schedule, an employee can work
certain hours every day, and as long as the schedule is built around the work time
specified. For instance, if the core hours are 10-3, the employee must work 10-3 every
day, but the starting and ending times can vary. The employee may choose to work
10-6, or 7-3, or any other combination as long as those core hours are covered. If the
employee maintains the same total number of hours, your workload, benefits, and pay
remain the same.

Flexible Common Common Flexible

Lunch
hours core core hours
6 A.M 9 A.M 12 noon 1 P.M 3 P.M 6 P.M

Figure 2: Example of a Flextime schedule

The only problem with flextime is that it can’t be extended to employees

involved in production as the work time also depends on the machines which have to
be run continuously for a certain period of time. Problems may arise if flextime is
offered to employees of other departments and not to those of production department.
So it is better not to introduce flextime in organisations where it can’t be extended to
all the departments.

3.2 Professional development

In a broad sense professional development may include formal types of
vocational education, typically post-secondary or polytechnic training leading to
qualification or a credential required to get or retain employment. Informal or
individualized programs of professional development may also include the concept of
personal coaching. Professional development on the job may develop or enhance
process skills, sometimes referred to as leadership skills, as well as task skills. Some
examples for process skills are 'effectiveness skills', 'team functioning skills', and
'systems thinking skills'. Some examples of task skills are computer software
applications, customer service skills and safety training. Examples of skills relevant to
a current occupation are leadership training for managers and training for specific
techniques or equipment for educators, technicians, metal workers, medical
practitioners and engineers. For some occupations there is a provision for
accreditation tied to "continuing professional education" and proving competence
regulated by a professional body.

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3.3 Feedback
People don’t quit organisations, they quit bosses. This can be extended to
colleagues too. Improper communication, negative relationship, backbiting etc can
lead to inefficiency and counter productivity. To overcome this, organisations are
adopting feedback culture. It is the culture wherein all the employees are taught the
skills of effectively receiving and giving feedback which is the degree to which
carrying out the work activities required by the job results in the employee obtaining
direct and clear information about the effectiveness in their job performance. This
includes telling each other frankly, honestly and effectively what they think about
their behaviour, job performance, ideas etc. Employees prefer being told what others
think about them directly instead of in the round about way and they like being given
feedback to self evaluate their performance. They also would like to frankly tell their
bosses the various problems and issues faced by them. Feedback is of two types
positive and negative. Positive feedback improves the morale of the receiver and
negative feedback improves the performance of the receiver. Poor feedback can
reduce morale, the ability to do the job, confidence of employees and can even lead to
conflicts between the management and the employees. Hence great care has to be
taken while giving and receiving feedback. So when both the managers and the
employees acquire these skills of giving and receiving feedback the feedback culture
works out well for the company. The following factors are to be considered while
giving feedback:

• Make feedback specific

Ambiguity and vagueness will make feedback ineffective as the receiver might
miss out the whole point. It should be made sure that there is no personality
clash between the giver and receiver. Both of them should be comfortable with
the way the feedback is being given and neither of them should feel attacked
or offended. To do away with these problems the feedback has to be specific.

• Concentrate on behaviour and results

Feedback should concentrate on behaviour, results and future prospective and
not on personality and attitudes so that the receiver gets the desired message in
the desired manner.

• Take responsibility
The manager/employee should take the initiative of giving feedback rather
than putting the blame on others saying that it is not their job. Most often it is
due to lack of skills and unwillingness to give feedback. Employees should
also be encouraged to take responsibility as there is lot of emphasis on
teamwork and empowerment in present day’s organisations which are
becoming flat.

• Balanced feedback
Feedback has to be balanced and accurate. Overstating or understating results
will lead to ineffectiveness of feedback.

• Feedback on periodic basis

Feedback has to be on a periodic basis preferably on weekly basis. Delay in
giving feedback will render it ineffective.

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Similarly while receiving feedback the receiver has to listen attentively to all what is
said, analyse the feedback and take remedial action.

Though difficult to establish, feedback culture promotes teamwork, job satisfaction,

employee empowerment, improvement in job performance and so is preferred by
most of the employees.

3.4 Tangible rewards

It is important to understand how different groups of employees perceive the

total reward package offered by the organisation, particularly if the marketing adage
'Perception is Reality' were to be recalled. If the employee doesn't understand the
total reward package, how can employee value it? And how can it motivate he
employee to perform?

Therefore, there is a need to gain an understanding of how managers and

employees perceive reward, and, in the case of the Senior Management Team, where
they think reward should focus? Perception of reward can be researched using the
following tool:

Senior Management Team Brainstorm

It is always important to involve the Senior Management Team (SMT) in

Total Reward policy development. It is best to involve them from the outset to ensure
that they understand and contribute to what you are doing. The key reason for
conducting management interviews or focus groups is to gain buy-in from those who
will be accountable for implementing the strategy. Interviews can help identify the
information that managers will find useful, and begin to develop an action plan. This
should focus on the 'big picture' and on priorities, not on detail. Top teams (or other
senior groups) are likely to be unenthusiastic about detailed level definitions. The
specific organisation and style of the debate will depend on the make-up of the team
and the nature of the facilitator's relationship with it. The focus will be on discovering
either 'what really matters to people who work here?' or 'based on the kind of people
you want to work here, what do you think would really matter to them?’ The focus in
each case will be on discovering either 'what really matters to people who work here?'
or 'based on the kind of people you want to work here, what do you think would really
matter to them?'

Cash vs. Tangible Rewards

Why Do Merchandise and other Tangible Rewards Motivate Better Than Cash?

Perks programs feature custom-designed rewards catalogues with highly

desirable and attainable merchandise as rewards. Our reward items are memorable
and reinforce the relationship between the reward earner and the reward provider.
They keep on giving each time a merchandise reward is viewed or noticed: recipients
relive the special recognition and appreciate the organization that honoured them.
Cash rewards on the other hand, often have fleeting impact and more often than not,
leave the recipient's mind as soon as they are spent. Cash - unfortunately for those

12
companies that attempt to motivate with it - is the least lasting type of reward, because
it's typically confused with other compensation and therefore forgotten. Additional
reasons to use tangible rewards rather than cash are summarized below.

Comparison between cash and tangible rewards.

Cash or Any Cash Equivalent

1. Purely an extrinsic motivator with little emotional involvement; does not

provide lasting satisfaction and long-term performance stimulation
2. Creates expectations, leads to entitlement and consequently looses its
motivating value
3. A dollar is a dollar; participant attaches no greater emotional or
inspirational value to cash. Lacks emotional impact of tangible rewards;
thus quickly spent and forgotten
4. No "trophy" value to be a constant reminder and continue to motivate. It is
difficult to show off; thus limits the lasting impact of the reward
5. Difficult to target a particular behaviour because of the lacking association
with a particular achievement
6. Recipients often can't recall what they purchased with cash reward which
further diminished its impact
7. Minimal association with Sponsor Company due to minimal trophy value
of reward which minimizes the potential of goodwill toward the company
8. Not cost-effective; requires three times the incentive investment compared
to non-cash, on average
9. Usually spent on necessities thus lacking a positive association with the
targeted accomplishment or behaviour
10. Participant feels guilty for not spending a cash award on necessities which
taints the reward with unpleasant feelings

Tangible Rewards

1. Carry a significant "trophy value" thus continue to reinforce the good

performance and behaviours
2. Provide tangible symbol of achievement and serve as an encouragement to
other employees
3. Reinforce the association with Sponsor Company and thus increase loyalty
4. Provide guilt-free enjoyment of reward thus increases the motivating
impact
5. Both extrinsic and intrinsic motivators; provide strong emotional appeal to
participants' personal wants and interests
6. Carry a higher perceived value because of the increased emotional
attachment; therefore, stimulate performance better than cold cash
7. Can be attached to a particular behaviour thus stimulating a specific
response in a long term
8. Participant’s family is involved in selecting and sharing awards thus
multiplying the emotional value of the reward and its impact on the
participant

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 9. Provide a 3-to-1 return on investment compared to cash. On average, cash
programs cost 12 cents per incremental dollar netted by increased
performance, versus 4 cents per dollar for non-cash programs
10. Do not become an expected part of an employee income or an entitlement;
always seen as a reward for a particular accomplishment or performance

Based upon the fore mentioned factors it can be observed that after the minimum level
of monetary compensation, employees are more and more interested in non-monetary
incentives i.e., tangible rewards rather than the cash rewards.

3.5 Work environment

Work environment has become a good non-monetary incentive for employees.
Present day employees are demanding workplace wherein they can balance the
demands of their work and their family lives instead of choosing one over the other.
Organisations have also accepted that among many aspirations of employees the
demand for a good work environment is quite reasonable. In the era of IT revolution,
most of the IT companies are offering air-conditioned rooms and state-of-the-art
furniture for the employees. Restrooms, dormitories, good canteens, washrooms are
provided by the organisations to their employees. This increases the morale of the
employees and thus motivates them.

3.6 Attentive Employers

Employees want their bosses to be attentive to their concerns, complaints and
be proactive in management rather than waiting for the event to occur. They want
recognition for the work that they do. Employee recognition programmes like
“Employee of the month”, even a spontaneous or private “thank you” and other
widely publicised formal programs that encourage specific type of behaviour and the
procedure to attain recognition is clearly defined. In Nichol Foods Ltd., a British
bottling company there is a different kind of employee recognition programme known
as “bragging boards”, where the accomplishments of various individuals and teams
are regularly updated. Monthly rewards are given on the basis of peer evaluation. In
another company Applebee’s restaurants, the president herself leaves appreciation
notes and voice messages on the employee desks if the employee performs well.
Simple things like sending personalised birthday cards, anniversary cards etc signed
by the highest official can work wonders in increasing the morale of the employees.

3.7 Autonomy
Employees want to be able to work independently. They do not want someone
constantly watching over them and questioning their every move. They like to receive
their assignments -preferable with the time frame required for completion and then
have the independence to complete the work given the guidelines and framework you
have set on their own merits.

3.8 Redesigning of jobs

This is designing of already existing routine jobs into more creative or at least
not a boring one. Various ways of redesigning the jobs are as follows
• Job rotation

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 It is the periodic shifting of an employee from one task to another. This
ensures that the employee doesn’t do the same thing again and again for a
considerably long period of time.
• Job enlargement
It is the process of increasing the number and variety of tasks that an
individual performs results in jobs with more diversity. This increases the
scope of the job and makes it more interesting.
• Job enrichment
It is the vertical expansion of jobs, increasing the degree to which the worker
controls the planning, execution and evaluation of the work.
• Job sharing
It is the arrangement that allows two or more individuals to split a traditional
40-hour-a-week job. This promotes co-operation amongst the employees.
• Telecommuting
It refers to employees who do their work at home at least two days a week on
a computer that is linked to their office.
There are other ways of redesigning the job which are very similar to the points in 3.1
to 3.7.

3.9 Retirement Planning

Companies are offering various options with regards to the retirement
planning or retirement financial planning. Retirement financial planning refers to a
collection of systems, methods, and processes which, in their aggregate, support a
family unit's (employee's) desire to achieve a state of financial independence, such
that the need to be gainfully employed is optional. Retirement planning can be
considered a limited or simplified form of financial planning addressing only this one
purpose, rather than the attainment of multiple concurrent goals (e.g. college funding
for children). Two often desired outcomes of retirement planning efforts are:
1. To assess a employee's current state, here specifically to mean a
probabilistic assessment of readiness-to-retire given a desired retirement
age and lifestyle, and
2. To identify employee decisions or actions to improve readiness-to-retire.
In recent years, producers such as a financial planner or financial adviser have
been available to help employees develop retirement plans, where compensation is
either fee-based or commissioned contingent on product sale. Such arrangement is
sometimes viewed as conflicting to a employee's interest to have advice rendered
without bias or at cost that justifies value. Employees can now elect a do it yourself
(DIY) approach, given the advent of a large, ever growing body of resources offered
by the organisation. For example, retirement software tools from the organisation in
the form of simple calculator, mathematical model or decision support system have
appeared with greater frequency. With these options, the employee can choose the one
that is best suitable. Thus organisations are able to motivate their employees by
offering flexible retirement solutions instead of common plan which may not be
suitable for certain employees.

Besides the fore mentioned types of non-monetary incentives which are

common to all the employees, it is equally profitable to go further and offer other
tailor-made incentives to employees for high motivation and better job performance.

15
4. CASE STUDIES

4.1 Motivation of healthcare workers for better service

The current human resources shortage in the health sector mainly of African
countries threatens the realisation of any plan for up-scaling interventions to control
the spread of diseases like HIV/AIDS, Malaria and Tuberculosis. The World
Development Report 2004 states it clearly: Without improvements to the human
resources situation, the health-related Millennium Development Goals cannot be
achieved. In this situation, migration of the highly skilled from the health sector of
Sub-Saharan African countries draws its significance from the fact that it is a drain on
resources that are extremely scarce already. Migration has its most serious effects
where staff shortage is already worst, namely in the remote areas. Low job
satisfaction and low motivation do not only reduce performance of the health system.
At the same time, they constitute a serious push factor for migration of health
workers, both from rural areas to the cities, and to other countries. It is therefore an
important goal of human resources management in the health sector to strengthen the
motivation of health workers, from heads of health facilities to auxiliary staff. Highly
motivated staff will not only perform better and provide a higher quality of health
services. Medical doctors or nurses who are motivated in their current job may also be
less inclined to leave their job or even their country behind in search of alternatives,
such as a higher salary as well as better working conditions and perspectives for
career development. The challenge most African countries face is hence how to
improve staff performance and how to retain staff. In most of the 18 African countries
some kind of financial incentive was provided to retain health staff in remote areas In-
kind benefits like free housing or subsidised transport existed in most cases. Some
countries offered incentives in form of improved career opportunities like further
training and better promotion scores. Also, .release papers are provided after an
agreed period of services in rural areas. Among the successful measures to reduce
staff shortages in rural areas, decentralisation of training institutions, recruitment of
retired staff and contracting of personnel were mentioned. Yet, whereas some
management tools are quite widespread, crucial human resources related QM tools,
such as feedback, staff satisfaction and clear organisational goals are applied in only
few countries.
To strengthen the motivation of staff, the majority of respondents suggest that
a mix of financial and non-financial incentives be most effective. In particular, the
importance of efforts-related payment schemes, performance targets for individuals
and groups, individual career development plans was stressed. The introduction of

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some form of competition, for example by means of benchmarking or award schemes,
was recommended. Core aspects of quality management were frequently mentioned,
in particular the establishment of a quality culture, of quality circles for participatory
problem assessment, teambuilding, supportive supervision, and feedback. A number
of good practices could be identified. For example, in Zambia, the introduction of
refresher training for medical staff seems to have led to a very high retention rate. In
Ethiopia a mix of continued medical education, the provision of housing, the
establishment of a clear career structure and a defined number of services in hospitals
has led to improved staff satisfaction and retention. An awards scheme, closer
supervision and team building efforts has improved both some service output
indicators and the motivation to stay in rural districts of Ghana, indicated by a higher
antenatal care and EPI coverage and less applications for transfers. The survey also
asked about the difficulties with the implementation of incentive schemes. The
introduction of performance payment was considered a challenge: it is difficult to
define the performance criteria and even more difficult to implement and apply those
performance criteria, given political interference and lack of good governance, such
as intransparency and corruption as well as nepotism. With respect to allowances and
financial incentives, it was mentioned that their effect on the motivation of staff was
often temporary in nature because they are soon considered as part of the general
benefit package. Although training is seen as a good motivator, the high staff turnover
quickly puts in question the sustainability of staff training. Furthermore, it is very
difficult to change old habits and long-term institutionalised norms and rules foremost
in a bureaucratic context, such as promotion schemes that are based on age rather than
merit. Some respondents mentioned the challenge to overcome cultural norms that
may sanction an outstanding individual who is willing to show initiative beyond one’s
duty.

4.2 How A UPS Manager Cut Turnover

In 1998, Jennifer Shroeger was promoted to district manager for UPS’s
operations in Buffalo, New York. She was responsible for $225 million in revenue,
2,300 workers, and the processing of some 45,000 packages an hour. She faced a
major problem when she took over in Buffalo: turnover was out of control. Half of
Buffalo’s work forces were part-time workers who load, unload, and sort packages
who were leaving at the rate of 50 percent a year. Cutting this turnover became her
highest priority.
The entire UPS organisation relies heavily on part-time workers. In fact, it has
historically been the primary inroad to becoming a full-time employee. Most of the
UPS’ s current executives, for instance, began as part timers during their college
years, then moved into full time positions. The part timers are treated well by UPS.
They are given substantial financial aid for college, high pay and full benefits. Inspite
of all these incentives UPS were not successful in retaining their workers.
Shroeger developed a comprehensive plan to reduce turnover. It focussed on
improving hiring.communication and intrinsic motivation at the work place. She
bagan by modifying the hiring process to screen out people who essentially wanted
full time jobs.She reasoned that unfulfilled expectations were frustrating those hires
whose preference were for full time.
Next,Shroeger analyzed the large database of information which were with UPS.
After studying the database she found that her workers were diverse in age and the
amount of work experience they had. So these workers had different needs and
interests. Shroeger modified the communication style and motivation techniques she

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was using keeping the above mentioned diversity in view. For instance, Shroeger
found that college students are more interested in building skills that they can apply
later in their career. As long as these employees saw that they were learning new
skills, they were content to keep working at UPS. So Shroeger began offering them
Saturday classes for computer skill development and career-planning discussions.
Many new UPS employees in Buffalo were intimidated by the huge warehouse in
which they had to work. To lessen that intimidation, Shroeger improved lighting
throughout the building and upgraded break rooms to make them more users friendly.
To further help new employees adjust, she turned some of her best shift supervisors
into trainers who provided specific guidance during new hires’ first week. She also
installed more personal computers on the floor, which gave new employees easier
access to training materials human resource information on UPS’s internal network.
Finally, Shroeger expanded training so supervisors had the skills to handle increased
empowerment. Recognising that her supervisors –most of them were part timers
themselves – were the ones best equipped to understand the needs of part time
employees, supervisors learned how to access difficult management situations, how to
communicate in different ways, and how to identify the different needs of different
people. Supervisors learned to demonstrate interest in their workers as individuals.
For instance they were taught to inquire about employees’ hobbies, where they went
to school, their likes.
By 2002, Shroeger’s program was showing impressive results. Her districts
attrition rate had dropped from 50 percent to 6 percent. During the first quarter of
2002,not one part timer left a night shift. Annual savings attributed to reduced
turnover, based largely on lower hiring costs, are estimated to be around
$1million.Additional benefits that the Buffalo district has gained from a more stable
work force include a 20 percent reduction in lost workdays due to work related
injuries and a drop from 4 percent to 1 percent in packages delivered on the wrong
day or the wrong time.

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5. CONCLUSION

Motivation at workplace is very important as it increases job performance.

Motivation is of two types: Extrinsic and Intrinsic. Intrinsic motivation is better than
extrinsic motivation after a certain minimum level of the latter. Intrinsic motivation is
attained through various non-monetary incentives. These incentives aid self-
management whose rewards result in intrinsic motivation. Various theories of
motivation also support intrinsic motivation over extrinsic motivation. It is found that
various non-monetary incentives given by various organisations motivate the
employees intrinsically and improve their performance.

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6. REFERENCES

1. Robbins, Judge. 2007. Organisational Behavior. Prentice Hall of India

Pvt ltd.

2. Hiam. 2003. Motivational Management. American Management

Association

3. Thomas. 2000. Intrinsic Motivation at work. Berret Koehler Publishers

4. Hollyforde, Whiddett. 2005. The motivation handbook. Jaico

Publishing house

5. http://en.wikipedia.org/wiki/Professional_development

6. http://en.wikipedia.org/wiki/Retirement _planning

7. http://www.maritzrewards.com/pdfs/site-benefits.pdf

8. http://etd.lib.metu.edu.tr/upload/12605141/index.pdf

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