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Managers encouraged to use non-monetary rewards in tough financial times

Money is often not the most effective factor in lifting employee engagement.

A new report by the Merit Systems Protection Board (MSPB) is encouraging federal managers to turn to non-monetary rewards to provide motivation for their employees.

A survey of more than 42,000 federal workers found that 71 percent of respondents felt motivated at work, but only 21 percent of those were "highly motivated." This means that managers need to find new ways to engage their staff members to increase performance. The study notes that money is often not the most effective factor in lifting employee engagement, which may alter the way that some companies run their sales incentive programs

Most respondents stated that personal satisfaction and having interesting work were most likely to increase motivation. The MSPB's report suggests that businesses give their employees more control over their work assignments and the methods for completing those tasks. Staff members should be allowed to work on projects from beginning to end to optimize their sense of pride and engagement.

Open and honest dialogue is essential to lifting employee engagement. As workers complete projects, managers can provide feedback and acknowledge performance. Using reward and recognition programs at this stage may create additional motivation for workers. Taking the time to publicly acknowledge top-performers builds a more cooperative and supportive environment that encourages all employees to work harder.

Budget cuts leading to changes in reward structure
Even in the private sector, companies are altering their incentive programs to include fewer bonuses or pay raises. The Associate Press reports that the recession caused a lot of businesses to switch to performance-based reward programs as a result of budget cuts. However, having fewer resources does not mean that incentive programs need to be dropped entirely. Non-monetary rewards can be used to save money while still providing workers with something they want. Allowing staff members to select from a range of merchandise can reduces expenses while increasing motivation. These items often have a larger impact on performance than cash prizes as they are used on a regular basis.

Whether companies continue to use bonuses or switch to offering trophy rewards, they need to be honest with their workers about why incentive programs are being altered, according to the MSPB.

"Candor is key," the report stated. "If agencies are honest with their employees about the actual or potential lack of money for rewards, the effects on motivation will be less severe than if agencies remain silent, making and then breaking an implied (or actual) promise that high performance would result in a financial reward."

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