Monetary incentives refer to the rewards or benefits that are given to employees in the form of money. These incentives are usually given to employees to motivate them to perform better and achieve their targets. Some of the common monetary incentives are:

• Bonuses


• Salary raises


• Commission


• Stock options


• Profit sharing


• Gift vouchers

Non-monetary incentives refer to the rewards or benefits that are given to employees in the form of non-money related items. These incentives are usually given to employees to motivate them to perform better and achieve their targets. Some of the common non-monetary incentives are:

• Flexible working hours


• Extra days off


• Recognition and praise


• Promotions


• Training and development opportunities


• Job enrichment

There are several differences between monetary and non-monetary incentives, which are:

• Form of Reward: Monetary incentives are given in the form of money, while non-monetary incentives are given in the form of non-money related items.


• Cost: Monetary incentives are usually more expensive than non-monetary incentives.


• Impact: Monetary incentives have a short-term impact on employee motivation, while non-monetary incentives have a long-term impact on employee motivation.


• Employee Perception: Employees may perceive monetary incentives as being driven purely by money, while non-monetary incentives may be seen as a more genuine form of recognition from the employer.


• Flexibility: Non-monetary incentives are usually more flexible and can be tailored to suit individual employee needs, while monetary incentives are usually fixed and cannot be changed.

Both monetary and non-monetary incentives are important to motivate employees to perform better and achieve their targets. While monetary incentives may be more expensive, non-monetary incentives can have a longer-lasting impact on employee motivation. Employers should consider both types of incentives when designing their employee reward and recognition programs.