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Impact Of Monetary Incentives On Employee Engagement

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Money is considered to be a universal commodity that can be used as means of exchange for goods and services. It is a fact no one wants to work for free. Employees want to earn reasonable remuneration and rewards. Similarly, organizations wish their employees feel the value for money. This therefore, makes money to be among the most motivating factors to all. It is a part of the total incentive package of an organization. Salary is thought to be one of the key factors influencing career choices Lai (2009). One employee in RRA described salary as, ‘the salary paid to me is what the organization thinks of me.” Another one said, “even if I am offered additional 20% on my current pay, I would not leave the organization”. This tells us that people are unique and have different preferences and can be influenced by different factors. ‘’The lower salary, the less appreciated” Bokorney (2007). The meta-analytic research by Condly et al. (2003) argued that properly selected and administered tangible incentives (cash and awards) can dramatically increase work performance and when carefully selected, implemented and monitored can increase work performance to an average of 22%.

In a survey conducted in RRA (2016) on staff motivation, the level of employee motivation was found to be at 73% with salary and wages among the most motivating factors. Out of 281 respondents, 142 (50.5 %) acknowledged salary dissatisfaction as compared to their responsibilities and education levels. This, evidenced that money is one of the key motivating factor in RRA which, justifies the periodic organizational reforms undertaken in RRA since (2005), (2013), (2017) and now (2019/20) on the pipeline as a continuous effort to improve key specific mix of financial and non-financial factors influencing employee engagement – such as, remuneration, communication, supervision, employee-manager relationship, employees’ voice, well-being, processes and systems and any other factor which make employees feel valued, more committed and engaged for the optimal success of the organization.

It must be noted that though RRA has continuously tried to adjust salaries to stimulate employee engagement it has at the same time created other windows for the same reason as included in its Statute (2011) as:

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  • (a) Performance bonus based on achievement of individual objectives,
  • (b) Performance bonus based on surpass of organizational target (% share is attached to individual performance) and
  • (c) Loyalty bonus based on the number of years one has been in the organization being rated above 80% on performance annually,
  • (d) Reward and Recognition – appreciation, shopping vouchers, Laptop and money cheques for (best employees), and improved employee well-being, just to mention a few.

All these focuses on the creation of a comprehensive strategy to facilitate employees to see direct correlation between performance and financial rewards and of course make them feel appreciated, valued and more engaged. Research has shown that majority of employees believe their work merits reward especially (pecuniary rewards) and when they miss it, they feel demotivated, Purcell et al (2007).

My perception though, is that money is not the only factor which makes one to be motivated or engaged because different personalities have different factors which influence their motivation, commitment, involvement, loyalty, satisfaction and engagement such as, opportunities for learning and development, career development, job enrichment , recognition and appreciation for well-done job just to mention a few.

However, it is my belief that rewards, such as performance bonuses can be discriminatory, and therefore demotivate some employees especially if the rating system is inefficient and can easily be manipulated and misused by the user (supervisor). A case in point is a situation whereby a group of employees may be working on an assignment and when it comes to individual rating, the supervisor using his/her own discretion rates them and therefore rewards them differently and yet they were working on the same assignment.

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Impact Of Monetary Incentives On Employee Engagement. (2022, February 17). Edubirdie. Retrieved November 27, 2022, from https://edubirdie.com/examples/impact-of-monetary-incentives-on-employee-engagement/
“Impact Of Monetary Incentives On Employee Engagement.” Edubirdie, 17 Feb. 2022, edubirdie.com/examples/impact-of-monetary-incentives-on-employee-engagement/
Impact Of Monetary Incentives On Employee Engagement. [online]. Available at: <https://edubirdie.com/examples/impact-of-monetary-incentives-on-employee-engagement/> [Accessed 27 Nov. 2022].
Impact Of Monetary Incentives On Employee Engagement [Internet]. Edubirdie. 2022 Feb 17 [cited 2022 Nov 27]. Available from: https://edubirdie.com/examples/impact-of-monetary-incentives-on-employee-engagement/
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