From the abstract notion of a business idea, to the inception of an organization, and down to its daily operations, Human Resources serves a fundamental, imperative function. The term Human Resources encompasses the entrepreneurs who actively engage in seeking unique ventures, the managers who cultivate culture within an organization, and the workers who, ultimately, accomplish various tasks. Ergo, it can be correctly interpreted that if all these facets were to perform in an efficient manner, businesses would flourish. This assertion begs a simple question: What would drive people to implement organizational goals in the most efficient fashion?
Businesses have been concerned with decoding this mystery, using various tactics and techniques, since the 19th century. To understand some of the best techniques proven to work in the contemporary world, we need to re-visit the last few decades. The conventional theories of workplace motivation provide us with insight (regarding the applicable motivational tools), along with caution (regarding certain practices to evade). This will, certainly, lay down the platform to formulate employee-motivational plans on.
Amid the myriad of (conventional) motivational theories, one that stands out is Abraham Maslow’s hierarchy of needs. Maslow, an American psychologist, proposed that people possess a set of hierarchical needs: physiological, safety, social, esteem, and self-actualization — in that order. He claimed that people are motivated by the desire to ascend the hierarchy, fulfilling their needs along the way.
According to this theory, businesses should strive to fulfill the succedent “level of needs” for their employees in order to motivate them. Compare two situations: one where an employee realizes no personal benefit for their effort, and another where an employee, in aiming towards achieving an organizational goal, is able to accomplish a personal goal as well. Sensibly, the latter situation is where most benefits can be reaped as employees will be greatly incentivized to commit to the organization and perform their best.
Despite the popularity of this model, there are limitations. One particular drawback lies in interpreting the “level of need” an employee is currently at (and, therefore, the “levels of needs” they have already accomplished); people tend to move up and down the hierarchical ladder, depending on their personal circumstances. Only once the current level has been identified can the management of a business actually hope to fulfill the succedent “level of needs” of their employees. Businesses, thereupon, find it challenging to practically implement this model.
Another conventional theory is proposed by Frederick Herzberg, who asserts that employees are concerned about two things: benefits intrinsic to the work (such as personal growth), and those extrinsic to it (such as salary). He ran various experiments and concluded that the opposite of job satisfaction was not dissatisfaction (as popularly believed), but, quite simply, the absence of satisfaction. The same was also said of job dissatisfaction. This distinction is necessary, claims Herzberg, for extrinsic benefits, such as a good salary, do not provide employees any motivation to work whatsoever—that is, they do not make them actually want beyond what they are currently doing—but, rather, they simply ensure that employees aren’t dissatisfied with their work and, thus, do not want to do any less of it. Their level of work is at a constant, not growing, not falling—a simple, straight line. The usefulness of Herzberg’s model comes into play here, for he then also says that, in order to get employees working more, we must improve intrinsic factors: we must make them feel recognition, responsibility, achievement, for it is when the employees feel empowered through their efforts that they wish to do more work, not merely through a better work space or a higher salary.
Observing the aforementioned theories, an obvious conclusion is made: Monetary incentives — like pay — do not affect employee motivation directly. However, there are various other factors that do. Non-monetary incentives can greatly enhance the level of employee motivation. It is in the nature of a person to aspire to concepts such as productivity, dedication to work, ambition, etc., and if the right mix of incentives is presented, it can compel people to boost performance and efficiency. Since the use of monetary incentives to motivate employees is an outdated concept, the next best alternative is non-monetary (fringe) benefits. The rest of this article will evaluate this hypothesis.
Commonly, businesses use a mixture of non-monetary and monetary benefits for their employees. Even the businesses that resort to creating an employee-focused environment usually target their white-collar workers, but shut the door on their lower-level ones. Since these lower-level workers, who have limited skills and are found at the bottom of an organization’s hierarchical structure, work for lower wages and contribute by a smaller extent, it is often argued that they will be better motivated by money, since they have to fulfill their basic needs.
Nevertheless, a recent study published in the African Journal of Business Management elucidated that even in low-income groups non-monetary benefits motivate employees to a greater extent, as opposed to monetary benefits. In addition to this, the research also claims that non-monetary benefits motivate employees four times more than monetary benefits, on average.
Psychological studies further elaborate upon this (employees, in general, are motivated to a greater extent by non-monetary benefits than monetary ones): They assert that this concept holds due to the way non-monetary benefits are perceived as compared to monetary benefits. Consider the fact that the actual value derived from non-monetary benefits is ambiguous, whereas, in the case of monetary benefits, the exact value of the reward is generally known. This distinction in the perception of non-monetary versus monetary benefits leads to the belief that the reward earned from non-monetary benefits will be of greater worth.
Furthermore, flexible working hours — a kind of non-monetary incentive — are known to have a significant positive effect on worker happiness, which can be explained by an economic theory, which states that people will work longer hours for money only to a certain extent, after which they will prefer to decrease work hours for subsequent increases in their income. The concept of flexible working hours has been tested in the business environment, and has been proven to amplify overall employee happiness, leading to higher employee motivation. An instance of when flexible working hours has provided immense benefit comes from Sweden. Sweden has reduced the legal working hours to only 6 hours per day which has led to happier employees, a lower worker turnover rate, and an upsurge in profits for businesses. It can, therefore, be concluded that the non-monetary benefit of implementing flexible working hours leads to happier and more productive employees.
Take another example from the contemporary world: Google Inc. is amongst the top ten corporate giants with the highest rate of employee satisfaction, globally. This high rate of satisfaction is due to various factors experienced by Google employees, such as the freedom to work under no supervision, and the autonomy to execute projects in diverse ways. This level of freedom and autonomy not only emboldens employees to tackle various new challenges, but also allows them to feel connected to the work they do. As Karl Marx also pointed out in his book, The Communist Manifesto, earlier in the 1800s, the problem with the modern business world (or as modern as it was a few decades ago) is that people often feel alienated from their work. “Man is alienated from the object he produces, from the process of production, from himself, and from the community of his fellows,” he said. Alienation stems from lack of ownership of the product and less involvement in the process of production. For Google employees, however, the high level of freedom and autonomy eliminates the problem of alienation and, consequently, reinforces the sense of ownership with each and every project, leading to highly motivated employees.
The importance of non-monetary benefits in business is clear-cut apparent, and although its importance has often been undermined, the cost of it has been insurmountable in losses unseen. In Pakistan, most local managers still believe headstrongly that the way forward is through bills and coins, but as the behavioral sciences conduct more research and unearth new truths, one only hopes that the people of the country pull themselves away from the managerial dogma and realize the worth of health and satisfaction and well-being — and that they do it sooner than later.
Writer: Nawal Abdullah
Editor: Uzair Shahed Islam
