The ideas and theories behind what motivates and attracts employees appear to be as diverse as the employees themselves. Looking at monetary and non-monetary compensations in regards to these incentives, expectations and rewards we have to first understand intrinsic rewards and extrinsic rewards. Intrinsic are those things that come from inside the employee and are seen as rewards from the perspective of self. While extrinsic are rewards are from outside ones self and often distributed by the organization or its representative.

Different people desire different things when looking at what jobs they want to do and what incentives and rewards are a part of them. McCleeland’s need theory suggests that people look for a need for achievement, a need for affiliation or a need for power. People who look for achievement want jobs that they can do well and quick while people who are looking to affiliation would gravitate toward jobs that allow them to socially interact and feel as a member of a team. The final need for power would “reflect the need for control over a person’s work or the work of others”(Gordon, 1999).

Two other theories that can assist in helping better understand what may be motivating for employees are Maslow’s theory and Alderfer’s theory. Both theories are based on the idea of a hierarchy of needs. Maslow believed that people would gravitate toward the areas that best meet their lowest level of need, which was not being met. Meaning that if a struggling single parent was looking for work they would more then likely want to have work that covered food, water, shelter and healthcare. A person with a savings built up may gravitate more toward a job that gave them belongingness or a feeling of achievement. If you look at Maslow’s theory then you see that “intrinsic rewards correlate well with upper level needs and extrinsic rewards correlate well with lower level needs” (DeCenzo & Robbins, 2010). Although, Alderfer’s theory is similar, he believed that the more a worker satisfied higher level needs the more they would focus on those needs. If they started to fail in them then they would look again to lower levels (Gordon, 1999).

Understanding employee’s motivators assists in establishing incentive programs that help with an organizations retention and is something further explored and developed in the Mandt for Managers program. A common mistake organizations make is assuming that all employees are motivated by the same things. Whenever possible organizations should establish multiple lines of incentive and reward and allow employees in deciding their own individual incentive and rewards. By understanding the differences between monetary and non-monetary compensation in regard to incentive, rewards, and expectations of employees, organizations can better satisfy the individual needs of employees while increasing organizational effectiveness.

Tim Geels – Mandt Director Organizational Sustainability