Types of non-financial rewards

Empowerment Usually takes the form of managers giving their employees more responsibility and involving them in (or giving them) decision-making (powers).

Advantages

Employees see empowerment as motivating.
Giving them more responsibility and involving them in the decision-making process usually makes them feel motivated, as they are glad to see that their contribution is valuable to the business. They also see the opportunity for promotion in the future as a result of empowerment.

Disadvantages

There is a danger of the employee making decisions that can put the business in a disadvantageous position.

Teamwork Involves putting employees in groups where employees are encouraged to work collaboratively with each other in order to fulfil a task.

Advantages

Workers might feel stimulated by others in the group, which increases their productivity.
Working in a group also initiates feeling of belonging and common effort which can also be motivating (refer to Maslow’s theory).

Disadvantages

When teams fails, the whole organization suffers.
Disputes between employees in a team can reflect on the whole of the organization. Not every organization can use this non-financial reward (consider different corporate structures).

Job enrichment (type of job enlargement) This is an attempt to give employees greater responsibility and recognition by expanding their role in the production process; involves giving an employee more work to do of a similar nature.

Advantages

Having more recognition for their work motivates the workers (check different motivation theories).

Disadvantages

This non-financial reward cannot be used in all contexts.
Not all employees feel motivated by this. In some organizations, low-skilled workers that do repetitive jobs would not usually be interested in this type of reward.

Job rotation (type of job enlargement) This involves an employee changing jobs and tasks they do from time to time, in order to give them a greater sense of the whole production process.

Advantages

This can be very motivating for the workforce, as they are able to see how the tasks they work on everyday are important for the whole of the business.

Disadvantages