In the business environment, one of the most key resources possessed by an employer is the employee. For the employers, employees can create benefits for them and make the profit maximization of the organization become possible. Therefore, it is important and imperative to have the employees motivated in many ways. In order to achieve this result, many things are put forward by management personnel.

People often think of monetary rewards when talking about employee motivation. However, monetary rewards, which I think, are not the main resource of employee motivation. This paper will take an objective manner to illustrate the influence of monetary reward and other sources in employee motivation and put forward a reasonable motivation mechanism.

Motivating employee refers to using different kinds of effective means to meet the various needs of employees to arouse their interest in better serving for the organization. Employee motivation benefits both the employees and the organization.

Which position do you think the monetary reward is among all incentive factors? If you regard it as the first place, then you should think twice after reading the work One more time: how do you motivate employees by super manager Frederick Herzberg.

He points out that everyone will seek to satisfy their basic needs in the work so that they will be willing to work continually. These basic needs are named as “hygienic factors”, including work condition, safety, enterprise strategy, salary and so on. However, they do not have motivating effect on employees.

The real motivation factors include recognition of achievements, the work itself, responsibility and promotion. Even counted as a motivation factor, monetary reward is just one of this set of factors, and ranks sixth among them. Herzberg finds that the former five factors are the real driving force which motivates employees to achieve success. As he says, these are what leaders should be in pursuit of.

Herzberg’s research sparked a wide discussion, and many people disagreed with this point of view. However, the experience of many managers and operators confirmed his conclusion. When Thomas Watson first took over the predecessor company of IBM, he has established a set of strict management standards, but according to his son: “The management philosophy of his farther in the past is far more humanized than people expected.”

His son became the chief executive of IBM later. In his bestseller father, son & co. , he describes his father’s motivation style like this: “Father pay special attention to not firing anyone. He told to every employee that he would continue to rely on them, and his work was helping them to grow up. He knows the best way of winning the employees’ loyalty to respect them and strengthen their self-esteem.

“Many years later, when I joined IBM, the company was known for its generous salary, benefits and employees’ great loyalty to the company. But looking back to the beginning of the business, father almost started from scratch, but he got employees’ loyalty through his words”

We can see the following scene in the foreign company more than once: a manager of foreign company walks to a male operator who is working carefully and praises him with smile: “GOOD BOY.” Then, he also walks to a female operator, gives a thumbs-up and says with admiring smile:” “Nice girl”. Although they two do not stop the work, but they are happy and work more carefully judged from their facial expressions.

There is the same story in the TV play. In a TV play describing the World War II, an American soldier is commended and when asked why was so brave in the war, he says with a simple answer: “because our colonel knows me and is looking at me in the behind.”

As we can see from the stories, monetary reward is not the main source in employee motivation and non-material factors can play the key role beyond our imagination. Incentives work because they can meet certain needs of employees. Monetary rewards, can meet the material needs of the employees while non-material incentives, can also meet the needs of employees in respect areas.

Actually, in the eyes of many employees, being respected is more important than getting monetary reward. The loyalty of many employees to the organization is strengthened from the non-material incentives.

Since the time of Herzberg and Watson, for employee motivation, people have turned their attention from the basic management to the leadership practice. The well-known master of leadership John p. kotter has emphasized how important the employee motivation in the leadership change.

He also believes that employee motivation is often carried out in a package of incentives, including: (1) Clear prospect and vision; (2) let employees participate in the decision on how to realize the vision; (3) recognize and enthusiastically support the efforts of the employees to achieve target; (4) recognition their achievements in the public. It is interesting to note that the stimulus and management techniques we often talk about are not included.

People need to have high spirit to overcome difficulties, but only monetary rewards are not enough in the motivation. High morale can be supported more from the spirit level. Walcott said: “in order to motivate employees, he will try to use highly controllable incentive ways to boost the enthusiasm of the people. The monetary and extrinsic rewards can inspire high morale in the short term, but cannot achieve the long-term incentive goal.

Kurt clarifies which kinds of motivation policy really work with Mary kay Cosmetics Company as example. At sales meetings of Mary kay Cosmetics, vitality, the spirit of enthusiasm and responsibility can be seen everywhere. If employees reflect an idea or question to the manager, the manager will try best to take action and generally take the corresponding action finally.

They try to help employees to solve performance problems at the first time. Senior leaders also play as model, and are skilled in using coaching and mentoring skills. They often spread the company prospect through encouraging their employees to let the employees bear the real responsibility of the company.

They give recognition and rewards to every success of their employees.
The idea of using vision to motivate employees is even common in the high-tech industry. Bill. Gates, the Microsoft chairman adopt a fundamental method to expand their own companies. Jeoffrey James describes in his book Business wisdom of the electronic elite in a way:”

Gates compares establishing a great company to developing a set of programs. He will firstly determine that it can motivate employees in the spirit level then he will implement the management.

Grand vision depends on managers’ daily work to get effective implementation, which is often ignored. The author of the bestseller,1001 ways to reward the employee, Bob Nelson says: ” a sincere gratitude at the right time from the appropriate people revealed means more meanings for employees than promotion, monetary rewards or numerous qualification certificate and medal.

This kind of motivation is effective because managers notice the achievement of related employees at first time, reward them timely. Managers should ask employees such question in a timely manner: “what is your best work experience in the past year? Managers should study their answers, and then try to recreate the work environment and conditions which can bring the experience. This strategy is from Marlene Carselli in Leadership skills for managers.

Among the opposition voice of relying too much on money factor to motivate employees, Drucker’s point of view maybe the most fundamental. Simply speaking, if the needs are satisfied continually, the more money employees will demand to produce the same feeling of satisfaction.

In his important book Management: tasks, responsibilities, practices, he points out: “Managers must reduce the necessity of monetary reward in a real sense, rather than treating them as bait. If monetary rewards can have motivation effect only when being increased sharply, then it will have reverse effect with adopting the policy.

The great increase of monetary rewards may possibly obtain the expected incentive effect, but the price is too big, so much that it exceeds the return of the rewards.

The principles of employee motivation are: once you can improve employee performance by giving a higher salary or monetary reward, you also need to pay a big price for a little increase in employees’ performance. As shown in the above examples, there are more effective tools for employee motivation.

Actually, in addition to monetary rewards as a way of employee motivation, there are many ways of non-material motivation as follows:

First, remembering the names of employees. Remember the names of the leaders, customers and clients, especially those important ones, seems to be kept in mind of enterprise managers, because this is etiquette in communication with other people.

However, many managers do not do well in remembering the names of employees. It should be noticed that m employees are the direct creators of the profits and should be respected. If a leader could remember the names of employees rather than call them with “what” or “the who”, employees tend to be more loyal to companies so they will really feel a part of the enterprise.

Second, praise more their employees, rather than set punishment rules

The management method for employees in many enterprises in a word:

“Punishment!” Although, on the surface of it, employees will restrain their own behavior with the presence of punishment and many managers are glad to see the effect of this method, the best and loyal employees will not appear because of fear of punishment. And timely praise about a certain behavior will motivate and guide the employees work harder towards the expected direction.

Third, adopt the way of competition to promote the internal competition of enterprises.

Many managers are afraid of the internal competition of enterprises, because some internal competition may lead to a vicious one and even results in bankruptcy of the enterprise. Actually, if controlled properly, , the internal competition can greatly enhance the competitiveness of the enterprises guided by reasonable competition rules.

Fourth, reward the employees when there are good returns then they will try best to work hard People are all reputation-oriented, therefore, if managers can ask some core backbone employees in some cases, when treating a meal, these people will feel they are be respected and look good.

When the enterprise has the difficulty, the talents will get through tough times with the company together. Actually, nobody will care about a meal, but sometimes whether they can be treated a mea really reflects the position of employees in the management layer. This tool of employee motivation can really do a greater help than monetary rewards in the actual situation.

There are various kinds of ways to motivate employees in the business field. Monetary rewards are regarded as the resource of employee motivation for a long time. The so –called monetary reward includes positive and negative ones, such as pay increase, allowance, welfare, and penalty. There is no doubt that monetary reward can really play a key role in motivating employees.

However, monetary reward is not so effective as the past and should not be adopted as the main way of motivating employees. Just as stated and analyzed by Frederick Herzberg, monetary reward only ranks sixth among many motivating factors. Managers, which I think, should seek to more effective employee-motivation portfolio in the competition with others.


Kovach, K. A. (1987). What motivates employees? Workers and supervisors give different answers. Business Horizons, 30. 58-65.

Maslow, A. H. (1943). A theory of human motivation. Psychological Review, July 1943.

Terpstra, D. E. (1979). Theories of motivation: borrowing the best. Personnel Journal.