Effects of Monetary and Non-Monetary Incentives on Employee’s Performance

This paper first focuses on the distinction between monetary and non-monetary incentives, and examine whether incentives enhance employee’s performance and identify the most effective incentive to motivate and improve employee’s performance. Before discussing the awards and perks offered to employees by companies, it is necessary to understand the importance of motivation in the workplace. Employee motivation is a major factor in organizational growth. Managers at all organizational levels concentrate on employee motivation through a variety of rewarding strategies, including monetary and non-monetary rewards. Monetary incentives are easy to understand and consist of measurable financial benefits. Non-monetary incentives may take the shape of material gifts or opportunities that may also have some monetary value. In addition, incentive programs are a key component of improving staff productivity. According to data, incentives are valuable since they can encourage up to 66% of employees to stay at their firm and boost employee performance by 44%