The old-school style of management assumed that money was the universal motivator. Money is a motivator to all people to some degree. That said, virtually all of the research that has been conducted over the last fifty years makes it clear that money does not motivate, it merely satisfies. Indeed, recognition by the boss and by peers almost always ends up as the key reward system. There are numerous other incentives that yield higher satisfaction than the almighty dollar.

I won’t get into the numerous situations and the psychology around the limiting factors of money as a motivator but, suffice it to say that there are various personal reasons why an employee would forgo monetary rewards in favor of a less-traditional approach. Alternatives to cash incentives or discretionary bonuses lead to a feeling that an employees’ individual needs are being heard and answered. By offering some creative ways to reward employees, the feeling is that there is a “personal touch” and employees tend to take greater pride in their work, and work harder for that next reward.

Here are some examples of ways to reward employees, other than using cash:

Offer “comp time” or some paid time off, particularly valuable after a lengthy project, employee travel, or weekends/on-call assignments. Offer corporate perks to rank-and-file, such as executive amenities for one month, that are typically off-limits (such as executive health club membership or use of a company car). Make a regular or monthly award for employees to strive for, such as “employee of the month” that comes with a prime parking spot Increase employees’ personal stake in the company by issuing stock options. Personalize even further by giving gift certificates to local favorite restaurants
A simple “thank you”-in writing. Believe it or not, most employees just want some acknowledgement and appreciation!

The key to all of these ideas is that we as leaders must learn, or at least remember, that the people who work on our organization are simply anxious to achieve results and to be recognized for it. Our associates come to work, and if they have any pride at all in the job that they do, they want to do a good job. I clearly start with firm conviction that virtually nobody goes to work, wanting to do a bad job or to be a failure. That kind of assumption would simply fly in the face of reasonable behavior. Hence, if everybody wants to do a good job; then having the boss, the person who controls your employment, recognize a “job well done,” is perhaps the most important reward.

That said, we must always be aware that every employee has expectations about compensation. In the current economic environment, most employees are simply happy to have a job, but in the long run, every employee wants to think that they have an opportunity to earn enough to have an improving quality of life. Hence, you cannot “buy off” employee expectations with recognition forever. Every boss must recognize that the high quality employee must be given the opportunity to “advance.” And, advance means not only cash compensation, but also advance in positional responsibility. It is only natural that people who consider themselves excellent performers will want to be “promoted.”

This simply means, look for the high performers, and make certain they get the opportunity to advance. You should do this for the good of the organization, not just to make them happy. What is good for the company should also be good for the excellent employee.