Material and non-material incentives for personnel

Currently, the business sector is developing at a fairly rapid pace. But, alas, competition can become an obstacle here. Motivation and stimulation of staff, as well as, as a result, the cohesive activity of the entire team is a direct path to overcoming all difficulties and to taking the business to a higher level, where new opportunities will open up.

Any employee in every company must understand the fact that he is one cog in the large mechanism of the organization. And the manager, in turn, must create the most comfortable conditions for the staff, working in which the employee will realize the importance of the quality of his work both for the company and for his development. After all, the faster and more confidently the organization develops, the higher the income of employees will be. Therefore, the main task of management is to ensure conditions for personnel, social protection of workers and motivation of employees.

What is staff motivation and incentives?

Incentives for company employees are certain levers of interaction with employees that are aimed at activating their activities. They should encourage work and arouse interest.

The efficiency of an organization, its profit, the number of sales and clients highly depend on the quality of work of each employee individually and the entire team together. Carrying out measures to stimulate and motivate enterprise employees and creating good working conditions for employees will naturally increase the efficiency of the business as a whole.

As we all understand, the most effective incentive is wages. But, to reassure company employees, the Labor Code of the Russian Federation prohibits disciplinary punishment in the form of salary cuts. That is why many employers now make salaries at their enterprises not fixed, but piecework or motivational, including bonuses. With this method of remuneration, employees do their work more diligently and try to do it better.

An increase in salary through a bonus not only increases work efficiency, but also stimulates the employee to improve in his profession. The bonus system at each individual enterprise is unique and has its own characteristics.

What is motivation? This concept means that a person experiences the internal formation of personal moments that encourage him to improve his work efficiency. Each person can be motivated by different factors depending on their needs. One person may have several such factors at once.

Motivation factors have a classification dividing them into external and internal.

External ones include:

1. finance;
2. career growth;
3. social status;
4. recognition from management, team or relatives and friends.

And the internal ones are:

1. creative direction;
2. curiosity;
3. personal beliefs;
4. outside persuasion;
5. needs for collectivization and communication, extroversion;
6. the desire for self-realization and self-affirmation.

The internal type of factors, as a rule, is determined by the desire of an employee of an organization to satisfy his needs for the safety of something or getting rid of something. External factors are aimed at obtaining the desired or avoiding the undesirable.

In another way, factors can be classified into positive and negative. Positive motives are receiving praise, bonuses, promotions. And the negative ones are avoidance of punishment, fear of dismissal.

How to prevent staff from losing motivation - 3 practical tips

Even if the implemented motivation system produces tangible results, it is worth considering how to maintain what has been achieved.

What do you need to do for this?

Tip 1: Prioritize motivation over stimulation.

Stimulation of personnel can be positive and negative. Often it borders on the imposition of sanctions.

Therefore, so as not to have to correct the consequences of the negative side of stimulation (and it will certainly appear), pay more attention to motivation. It's more positive and reliable.

Read a separate article on our resource about methods of motivating staff.

Tip 2. Create favorable working conditions

The quality of life and working conditions certainly affect the quality of work performed. In order for performance to be high, a person must also rest well.

How you can improve working conditions:

• equip the premises with additional heaters if it is cold there in winter, and air conditioners to create coolness in the summer;
• install drinking water coolers;
• allocate a separate room for the rest room;
• at a large enterprise - open a canteen for employees, etc.

Naturally, such events must be carried out in accordance with the specifics of the departments and the activities of the company as a whole.

Tip 3. Take an interest in the lives of the staff

This will allow you to make the right moves and adjust the motivation system in time. This approach brings management closer to the team and creates a trusting atmosphere.

After all, the basis of any relationship in a team is the human factor, no matter how tempting the prospects for career growth.

On a similar topic, read the publication “Staff Motivation in an Organization.”

We suggest watching a video about the positive and negative aspects of motivation and incentives, about different models of the motivation system and much more.

Theories of work motivation

Theory of motivation according to A. Maslow

An analysis of A. Maslow’s theory shows that all motivation comes down to one large pyramid of human needs. The theory of stimulation through needs shows that their satisfaction occurs in a person in a special hierarchical order. The individual solves problems from lower to higher. If you look visually at the pyramid, then needs are satisfied from its base towards the top. In addition, a person constantly evaluates his needs, thereby identifying the most significant and strongest at the moment. It is to solve these problems that the individual will strive first of all, directing his work.

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Types of staff motivation

The first type of motivation is direct. This is when an employee has a strong belief that they will receive a reward for their hard work. This type of motivation, in turn, is divided into:

1. material incentives for employees (bonuses, vouchers, cash awards, salary increases);
2. non-material motivation (certificates, recognition, gifts, memorabilia, improved working conditions).

The second type is indirect. The enterprise takes measures aimed at improving the qualifications of employees and their motivation. Thanks to this method, the zeal for work is renewed, the employee begins to receive satisfaction from completed tasks. The sense of responsibility for one’s work becomes higher and the need for control by management decreases. The program of events varies depending on the field and direction of the enterprise.

The third type is social. A person must understand that he is part of a large team, necessary for the successful functioning of the entire corporation, part of the team. Afraid of disappointing colleagues, partners and management, he will try to fulfill his duties as efficiently as possible.

The fourth type is psychological. The atmosphere within the team, in the workroom, as well as interaction with all elements of the position and work should be at a level of calm and relaxation. A person must want to work, he must like his employment, he must have an interest in work in this particular area. All this will give psychological satisfaction.

The fifth type is labor. Self-realization plays a key role here.

The sixth type is career. For the sake of promotion, a person will try to work harder.

The seventh type is gender. The desire to surpass someone in success, boasting to friends and family, as well as colleagues, can force an employee to do a better job.

The eighth type is educational. The desire to gain new knowledge and skills plays a key role here.

Methods can be negative and encouraging.

Negative:

1. deprivation of bonus;
2. reduction in wages.

Incentives:

1. privileges;
2. bonuses in the absence of sick leave or other absences from work;
3. bonus payments;
4. additional vacation days or days off;
5. gifts or certificates for services and goods.

Stimulating personnel as a method of increasing the labor potential of an organization

Bibliographic description:

Zulkarneeva, V.V. Personnel incentives as a method of increasing the labor potential of an organization / V.V. Zulkarneeva. — Text: direct // Current issues of economics and management: materials of the V International. scientific conf. (Moscow, June 2020). - Moscow: Buki-Vedi, 2020. - pp. 93-96. — URL: https://moluch.ru/conf/econ/archive/222/12528/ (access date: 10/09/2020).


For any company, it is very important to work not only with clients, but also with its own staff, because the success of completing assigned tasks directly depends on them. A well-structured motivation system allows you to increase the level of loyalty and motivation of staff, and therefore the efficiency of their activities. As practice shows, it is not enough to simply delegate authority and achieve the fulfillment of assigned tasks through strict control. It is much more important to inspire employees, to unite them, and also to take into account the individual characteristics of each employee - his intentions and goals in a given organization, his desires regarding the content of work and the performance of this or that work.

A close-knit team of highly professional specialists must be constantly directed towards achieving a common goal and personal self-realization, achieving status in the organization. Even in cases where a strong team has been formed according to various criteria and the most suitable working conditions have been created, at some point employees may lose interest in performing certain duties or even leave the company. Many factors can cause such an outcome, but the essence of all these factors comes down to an insufficiently developed motivation system. It is motivation that is the tool that can increase the interest of employees in fulfilling their professional duties, while motivation does not have to be material in nature; sometimes it is appropriate to reconsider the non-material side of the motivation system to retain employees and preserve the team [3].

Let's consider the features of material and non-material motivation. First of all, it is worth noting that the material basis of motivation includes wages, additional payments, bonuses, bonuses and other monetary payments, and the intangible basis of motivation comes down to socio-psychological changes and organizational changes that can increase the employee’s interest in performing their job duties .

As you can see, the use of material motivation has an advantage over the use of intangible motivation, since money is the universal equivalent. Sometimes even employees prefer to replace the non-material motivating factors offered to them with material ones. Instruments of non-material motivation can strictly be used for their intended purpose, while its monetary equivalent can be used for any other purpose, limited only by the amount of payment.

Material motivation can be direct and indirect. Direct material motivation, first of all, consists of a base salary, which is a constant part of workers’ wages, and bonuses, which are a variable part of wages [3].

Quite common at the present stage are such methods of material motivation as: monthly bonuses, bonuses for overfulfillment of work, bonuses for holidays and birthdays, bonuses for long service. At the same time, when setting the size of the bonus for length of service, it is worth increasing it to the greatest extent precisely at the beginning of a working career, when the employee effectively fulfills his obligations, works for the benefit of the company and strives to achieve self-realization to the greatest extent.

In organizations engaged in trade or service provision, material motivation is to establish a bonus in the form of a percentage of revenue, showing that an employee’s earnings do not have a clearly defined upper limit and directly depend on the employee’s professional development and his ability to stimulate the sale of goods and services.

As practice shows, a fixed amount of an award or bonus does not stimulate work better, more, more efficiently, since the monetary reward will still remain unchanged [2].

An effective remuneration system is extremely important in personnel management - in attracting, motivating, and retaining employees with the required competencies in the organization; it helps to increase labor productivity, more efficient use of human resources, and reduce the costs of searching, selecting personnel, training them, and social and labor adaptation.

If the remuneration system is ineffective, this will cause the employee to be dissatisfied with the amount of compensation for the work invested and may affect a decrease in labor productivity, the quality of work performed, and a deterioration in labor discipline.

An effective remuneration system must be strictly regulated by the company’s internal documents - regulations on bonuses, staffing schedules.

Indirect material motivation is a compensation package, or social package, that the organization provides to the employee. The content of the compensation package (benefits) depends on the level of the position held and authority in the organization [2].

Indirect material motivation - there is a set of additional non-monetary compensation. Table 1 shows two blocks of employee compensation - mandatory benefits, which are established by the legislation of the country, and voluntary benefits, which have a voluntary basis and are regulated within the company.

Table 1

Types of indirect material incentives for personnel

It is always necessary to take into account the fact that, no matter how complex the system of material incentives for employees, it will not bring the desired result from their output if non-material motivation is not developed, as moral compensation and a balancing factor [5].

Non-material motivation is a set of external non-monetary incentives that help increase labor productivity. In order to inspire an employee to do his job well, the employer must know the basics of communication psychology, have management experience, and also have qualities such as sensitivity, wisdom, intuition, emotional intelligence, and politeness.

There are many methods of non-material incentives that can motivate employees to do their work efficiently and efficiently [5]. Table 2 shows the main methods of non-material incentives.

table 2

Basic methods of non-material incentives

Of course, not all types of non-material incentive methods are shown in Table 2. In each company, the non-material incentive system has its own distinctive features and is an addition to the main system of remuneration and compensation package.

When introducing non-material incentives in a company, it is important to determine how each employee positions himself with the organization. This will make it possible to most clearly select methods of influencing the performance of a particular employee [5].

It should be noted that no matter how effective and universal the system of monetary incentives may be, the presence of only material motivation will not make the organization effective. Each employee in the team has his own life guidelines and positions, and if you simply pay additional bonuses and premiums, this is unlikely to result in a cohesive team united by one common goal. Of course, financial incentives should be linked to the performance of each individual employee, even if two employees occupy the same position or are at the same level of the career ladder. However, you should not adhere to only this principle, as this can cause a negative reaction among employees and disrupt the healthy climate in the team. Therefore, it is so important to additionally apply methods of non-material incentives. Characterizing the modern motivation system used in practice, it can be noted that they are still effective, but the main drawback is the average approach to employees without taking into account individual needs. Most employers do not understand the importance of non-material motivation, and perhaps are not able to organize their business in such a way that monetary income is enough to create a system of non-material incentives for employees. But sooner or later, employers still come to understand the importance of developing a motivation system that would take into account the individual characteristics of the employee and would have not only a material nature, but also other non-material incentives.

There is a relationship between material and non-material incentives. Salary directly affects the employee’s self-esteem, ensuring the respect of others, forming self-esteem, status in society, i.e., a material incentive provides not just monetary reward that can satisfy basic human needs, but also gives a positive social, moral and psychological effect.

Thus, the basis of effective work activity in an organization is a rationally constructed system of motivation and stimulation of work. Motivation and stimulation of work are not equivalent concepts. If motivation explains the internal motivations for action (personal needs, interests, expectations of an employee from fulfilling his job responsibilities in a particular organization), then stimulation is aimed at creating conditions in the organization under which the employee will want to give his experience, knowledge, skills and abilities to do just that. organizations. Motivation and incentives complement each other, which is why it is so important that the organization takes into account both of these tools for motivating action. Depending on certain preferences and expectations of employees in a particular organization, several types of employees are distinguished: earnings-oriented employee, professional employee, authoritative employee, ideological employee, owner-type employee, creative type and collectivist type.

Literature:

1. Vikhansky O. S., Naumov A. I., Management. 3rd ed. - M.: Economist, 2008. - 644 p.
2. Genkin B. M., Konovalova G. A. Fundamentals of personnel management. - M.: Higher School, 2013. - 228 p.
3. Gryadovoy D.I., Kikot V.Ya. Social management. Theory, methodology, practice. - M.: Unity-Dana, 2012. - 312 p.
4. Deineka A. V., Bespalko V. A. Human resource management: a textbook for bachelors. - M.: Dashkov and K, 2013. - 389 p.
5. Zhuravlev P.V., Kulapov M.N., Sukharev S.A. World experience in personnel management. Review of foreign sources: Monograph. - M.: Business Book, 2011. - 158 p.

Key terms
(automatically generated)
: non-material incentives, material motivation, employee, non-material motivation, wages, company, compensation package, employee, monetary reward, voluntary basis.

Tools for motivation and stimulation

Many books in this area divide incentives into tangible and intangible. Non-material motivation is less effective than material motivation, but it still exists and also stimulates employees. It is better to combine both types of motivation for greater effectiveness.

Non-material encouragement

This includes:

1. career growth and improvement of working conditions;
2. praise;
3. presentation of certificates, medals, orders, diplomas;
4. corporate events.

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About the advantages and disadvantages of non-material motivation

The opinion that non-material incentives are a way to save money on material ones is wrong. It would be more correct to treat this as an important addition, especially since with a systematic approach this type of motivation is not free for the company. But if the funds spent on non-material motivation are simply divided among employees and given as bonuses, the effect will be less than if they are spent on organizing incentive events. Nevertheless, the cost of motivation can be attributed to the disadvantages of the technique. But the positive thing is that these costs are highly profitable.

Existing methods of non-material incentives for employees can be free, shareware and requiring investment. Verbal encouragement alone costs nothing. And this type of motivating activities has the most advantages. A manager or supervisor spends a minimum of time on this and nothing more. For an employee, the boss’s attention and praise always creates a positive emotional background. He begins to feel important for the company, involved in its success. The feeling of being exploited depresses the employee, and sooner or later ends in active or passive sabotage. The moral side of verbal encouragement should not raise questions. This is not a deception, because as soon as management begins to care about the emotional background of the staff, it applies all types of incentives, incl. material, it thereby shares the company’s achievements with the team.

The main advantage of non-material motivations is that they fill the emotional needs of employees. People don't work just for money. It is also important for them to feel needed, useful, authoritative, and in demand. This is a secondary necessity after solving material problems. This is why corporate events where management publicly expresses gratitude to employees are so important. Without them, the team becomes disunited and disoriented.

The psychological reason for the need of company employees for verbal encouragement is considered to be the inherent paternalism of a person. The feeling of being part of something whole, powerful and successful creates a favorable emotional background and inspires confidence in the future. Therefore, any praise contributes to the employee’s involvement in the company’s success, thereby filling a niche of social significance.

Another advantage of non-financial incentives is pulling up those lagging behind. There should be no outcasts in the work collective. Reasonable praise for employees whose authority in the team is not sufficient compensates for criticism from their colleagues. As a result, the employee feels more confident, makes fewer mistakes and increases his authority in the team.

Organization of motivation and incentives at the enterprise

By studying recommendations and literature, using foreign experience, three levels of motivation can be identified.

The first and highest level is individual. Every employee should be paid adequately for their work. Every worker must understand what he is paid for and know what he needs to do to be noticed by his superiors and receive a reward or promotion.

The second level is command. It is necessary to organize employees into groups. Focused on one goal, people will exhibit synergy and work more efficiently. In addition, it is necessary to maintain a friendly atmosphere in groups.

The third level is organizational. The entire company, from ordinary employees to management, must function as a single whole.

Organization of staff motivation should take place in 5 stages:

1. searching for problems in the field of stimulation and motivation;
2. selection of the right motivation methods based on the analysis of the information received;
3. influence on work, behavior, staff efficiency through the use of motivation methods;
4. monitoring the work of the applied methods, the success and diligence of the staff;
5. rewarding hard workers, applying a system of rewards and bonuses to employees who are well influenced by motivation.