Is a monetary or non-monetary motivation scheme better?

Motivation Schemes Not All About MoneyIt is well known that motivation schemes, if the employer gets them right, can have a dramatic impact on sales figures, customer service, and improve individual, team and business productivity. They can also be a major contributor to employee engagement.

There are two main types of motivation strategy: monetary and non-monetary. There is no doubt that each type of scheme has its supporters and dissenters. But which is best for your business?


Monetary motivation schemes

Monetary Rewards


Often rewards are all about the money. And let’s face it, the first thing we tend to think of as a motivator is cold hard cash.




  • Monetary motivation schemes tend to be easy to understand for employees; if you achieve this goal then you will get this financial reward.
  • Monetary rewards can appeal to all levels of staff, from the office administrator to the CEO.
  • Money is a universal reward and the employee can then choose how to spend the reward in a way they suits them. They can purchase an immediate treat or put it towards the cost of a holiday or new car.



  • As we have seen in the financial services sector, monetary bonuses had the unexpected consequence of encouraging a risk-taking culture in those organisations that contributed to the financial crisis. This is an extreme case but monetary motivation schemes can work against the business.
  • Monetary rewards are often just paid as part of an employee’s salary which means the reward disappears into the employees monthly outgoings.
  • It is difficult to sustain participant interest through monetary motivation schemes over the long term.
  • Not everyone is motivated by money, for your younger team members it might be about having more free time to travel or for those employees with a family it might be about receiving leisure vouchers, gift cards or earning a family holiday.


Non-monetary motivation schemes

Non Monetary Rewards


There are lots of alternatives to financial rewards and employers shouldn’t be afraid of getting creative with the rewards that are offered.




  • Non-monetary motivation schemes can mean more to employee engagement as the reward on offer can be linked to key behaviours and integrated with an overall incentive theme.
  • With non-monetary motivation schemes you can reward your employees almost immediately without having to submit requests to the payroll team and wait for the employee’s monthly salary to be paid. Rewarding your employees as close as possible to the event.
  • Simple things like a timely but public thank you or small rewards can create a passionate, hard-working team that is as committed to growing and improving the company.
  • Non-monetary motivation schemes don’t have to break the bank. By creating formal reward and recognition programmes using third party suppliers businesses can save money on the cost of days out, trophies and vouchers. It also means that the employee can choose their own reward from a wide selection.



  • If you are giving gifts as a reward it can be easy to give the wrong gift, which shows that the company or manager doesn’t really know their employee, which in turn can be demotivating.
  • Employees may have unrealistic expectations of the value of the gift, which can lead to disappointment if the gift does not have the expected perceived value.
  • Some employees do not like to have the spotlight shined on them in a public presentation. Be sure to tailor your presentation methods to suit the different personalities in your team.


So which employee motivation scheme is best?

Monetary schemes will always have their place but if you’re looking for sustainable long term employee motivation then we believe that non-monetary motivation schemes beat their cash equivalent hands down. However, there is no-one size fits all solution so you need to carefully consider your industry, your business goals, your employees and your budget. The best scheme for you may well be a combination of the two.


John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.

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