Which Works Better for Keeping Employees: Cash Bonuses or Career Growth Opportunities?

Among monetary and non-monetary motivational strategies, which one is more effective in retaining employees?

In considering strategies to retain employees, it is essential to evaluate both monetary and non-monetary approaches. While monetary incentives such as bonuses and salary increases can provide immediate gratification and motivation, non-monetary strategies like recognition, career development opportunities, and work-life balance initiatives can have a more sustainable impact on employee retention.

It is essential for organizations to strike a balance between monetary and non-monetary incentives to create a comprehensive retention strategy that addresses the diverse needs and motivations of employees. By understanding what drives employee engagement and loyalty, companies can develop effective strategies to retain top talent and foster a positive work environment.

Hi Chanchal,

About your question, I should say both have equal importance to retain an employee. You must have heard about Maslow's Hierarchy, which talks about different hierarchies of needs. Each person in the world is at a different level of hierarchy, so you cannot standardize a single factor as motivation for all employees. An employee who is needy and in a struggling phase will prefer a monetary boost, whereas an employee who is well-settled and has all comforts in life will appreciate more recognition for their work.

Therefore, it is crucial for HR and line managers to understand what motivates their employees the most. Is it a financial boost, recognition, or something else entirely?

This is how a system of motivational strategies can be designed based on employees' customized needs.

Regards,
Hitesh

Hi,

Recall that there is intrinsic and extrinsic motivation. From an HR point of view, we need to address ourselves to making employees have intrinsic self-motivation. This will only be realized if staff see that their career path is in tandem with the organizational succession plan.

Watch out for cases where we stifle the progression of staff and lose out by just paying them money! Life is not all about money.

You also need to have employee participation through the new psychological contract that emphasizes emotional connectedness based on the unwritten laws and rules. This will yield and cause staff to exhibit OCB - organizational citizenship behavior. Those characteristics that employees adopt when they feel they belong to the organization. For instance, they will work long hours without necessarily asking for overtime payment.

Regards,
Patrick