MGT351

FACT SHEET

Date: 18th April 2019

Submitted to:

Rifat Iqbal (Rfq)

Lecturer
North South University

Group Members: Group D (Against)

MD Kamrujjaman Rafi : 1620258030

MD. Barkat Ullah Khan : 1410732030
MD. Rifat Mahmud : 1410910630
Topic- Financial incentives are most effective than the non-financial incentives in boosting
employee performance.

Non-financial incentives are better motivators than financial incentives.

In a 2009 survey conducted by McKinsey & Company, non-financial incentives were rated
as more powerful motivators than financial incentives.

Link: https://www.plum.io/blog/non-financial-incentives-for-employees

Apart from the monetary and future security needs, an individual also has psychological,
social and emotional needs. Non-financial incentives focus mainly on the fulfilment of these
needs and thus cannot be measured in terms of money.
Reference: https://www.plum.io/blog/non-financial-incentives-for-employees

Negatives of Motivating Employees with Financial Rewards:

 Teamwork: Financial incentives like bonuses can inhibit teamwork because they
often reward individual achievement rather than group achievement, which can cause
competition and divisiveness.
 Burn Out: Overwork can lead to problems like low morale and lower productivity per hour
spent at work.

Reference: https://smallbusiness.chron.com/negatives-motivating-employees-financial-rewards-
37782.html

Non- financial incentives reach out and touch the emotions to make the employee feel
welcomed, appreciated and valued. But these incentives do not come off as cheap or
thoughtless. This will results in negative impact on employees mind, always tried to make an
employee feel special. Some non- financial incentives are: Award presentation in front of
peers, Dinner with CEO, Upgraded workspace, Chance to lead the project, Promotion,
Flexible scheduling etc.

Reference: https://www.plum.io/blog/non-financial-incentives-for-employee