Driving Team Motivation Using Cash Rewards: Good or Bad?

It’s easy to motivate employees with cash rewards. But when done wrong, it could also be the lazy way to go about it. In this article, we discuss the challenges of motivating employees, the role of rewards in boosting motivation, and non-monetary alternatives you can include in your rewards program. 

The Challenge of Motivation

Even if you’ve never been placed in a position of leadership, you understand the benefits motivation has on overall productivity. But despite being an established element for success, one study by Gallup – a global analytics and advice firm – found that traditional approaches to motivation have consistently fallen short.  

Here are some of its key findings:

  • Just 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. 
  • Only 14% of employees strongly agree that the performance reviews they receive inspire them to improve. 
  • Only 30% of employees strongly agree that their manager involves them in goal setting. This, despite finding that employees whose managers involve them in goal setting are 3.6x more likely than those that aren’t to be engaged. 

With its findings, Gallup estimates that the cost of poor management and lost productivity from employees in the US who aren’t engaged or actively disengaged to be between $960 billion and $1.2 trillion a year. And if those massive estimates aren’t enough to convince you about the value of motivation, then you’d be hard pressed to believe in the concept at all. 

One reason why traditional approaches are failing is that there appears to be neglecting the fact that the workplace is continually evolving and shifting. Just look at the difference between two closely-related generations below:

Millennials vs Generation Z (Forbes)

Image: Forbes

Because of these types of differences, managers can’t expect to inspire optimal performance by scoring them and offering standardized feedback based on their scores. Instead, as pointed out by Forbes, there needs to be a process that creates intrinsic motivation and benefits both the team member and the company. 

Employee engagement and wellness

Apart from mainly looking at the issue at a purely performance level, you also need to factor in employees’ wellbeing. Increasingly, the wellness of employees is being viewed as not just the responsibility of HR, but an integral part of the business strategy. 

Going back to Gallup’s findings, have a look at some of the correlations found between engagement and wellness. 

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  • 89% of employees working for companies that support wellness initiatives are more likely to recommend their company as a good place to work. Conversely, among those working for management that’s not viewed as committed to employee wellbeing, only 17% would recommend their company as a good place to work. 
  • 70% of employers have improved their physical environments to encourage healthy behaviors. This is because more and more companies are finally understanding that wellness must permeate every aspect of an organisation, as standalone wellness programs produce limited results. And when it comes to reshaping the physical working environments, some beneficial changes include adding healthy foods to break rooms and restaurant delivery menus, ergonomic workstations, and improved lighting. 
  • 61% of employees agree that they have made healthier lifestyle choices because of their company’s wellness program. And a study by Aflac found that as employees make better lifestyle choices, it resulted in higher productivity and job satisfaction
  • Wellness also needs to go beyond traditional health measures, as 87% of employees expect their employers to support them in balancing work and personal commitments. And employers can address this need by being willing to offer flexible work schedules and by encouraging employees to utilize vacation time.

The role of rewards in employee motivation

Of course, while supporting work-life balance can be virtually achieved by everyone, only organisations with resources to spare can fully commit to using wellness to nurture motivation. As such, offering rewards, particularly of the financial ilk, remain a popular approach.

But it’s important to note that money, while being a truly motivational force, is not the only thing that can drive people to work hard and do well. 

As noted by Chron, employee rewards and recognition programs designed to acknowledge employee contributions to the company’s goals and show appreciation for their efforts are also key ingredients of high-performing workplaces.

One survey also found the adage “people always work harder when they know they are appreciated” to be spot on, with 79% of employees saying that recognition makes them work harder. 

And as more millennials and Gen Z workers make a larger part of the workforce, crafting a reward system to further motivation becomes even more important. These younger workers not only want just compensation and benefits, they also place great importance in having meaningful and fulfilling work. 

Pros and cons of monetary rewards

Before we get into what kinds of rewards you can incorporate into your program, let’s take a look at both sides of what a monetary incentive scheme can bring. 


  • Universal and easy to understand. It’s pretty straightforward, if you perform well, or reach a particular goal, you get money. 
  • Additionally, everyone in the organisation understands money’s value – from the intern to the CEO. 
  • Employees can choose to utilize a financial reward however they please – be it to save up for a more long-term goal, or to spend it on things that provide instant gratification. 


  • Often, these financial rewards go straight into an employee’s paycheck, without much fanfare. While this is certainly appreciated, people tend to crave a more outward show of recognition as well. 
  • It can encourage a sort of risk-taking culture, shooting for the financial reward end by any means possible – much like what transpired during the period that led to the 2008 financial crisis. 
  • Employees can get numbed by monetary motivation, which often leads to a drop in engagement over the course of a longer period. 
  • Money is not the end-all, be all for everyone. Some place more value on having more time with their loved ones, or having rich experiences.  
Team Motivation Using Cash Rewards

Image: Unsplash

Non-monetary incentives to help drive team motivation

Lunch outs

It’s simple and affordable. If you’re a smaller organisation, this can be a simple, yet especially good way to boost motivation. As well, it allows for a team to bond beyond the confines of the office walls. When timed perfectly, you’ll notice that employees come back to their workstations more refreshed and energized after team lunches. 

Team parties

Similarly, but to a larger extent, throwing small team or department parties can be a good motivational tool. It’s a great way to not just bond, but to relieve the stresses brought about by the daily grind

Leadership opportunities

Putting people in a position of leadership empowers them to go above and beyond their usual responsibilities. Just make sure that you carefully guide them throughout the process, without undermining them, and you’ll notice the experience to be invaluable to their professional growth. 

Consistent recognition

Even just posting a short Instagram story to highlight the employee’s achievements can be a good boost to an employee’s engagement and wellbeing. It gives them a sense of pride and the feeling of being valued. 

Go beyond business and small talk

At the end of the day, your employees are people with lives outside of the workplace. So, every now and then, take the time to actually get to know them. This not only gives you an idea of who they are as a person, it also gives you an insight into what truly motivates them. 

Handwritten notes

It may seem outdated in this digital age, but that’s exactly what gives it more value. A simple card expressing how much they’re appreciated can bring a great sense of joy and pride. 

Bend roles

This breaks the monotony of their routine and keeps them engaged. For example, in an editorial team, the office admin may have creative ideas if you just hear them out. Asking for input from everyone on things different from what they usually do can sometimes have profound effects. 

Reward with flexibility

If someone reaches a certain goal, you can reward them with options to work from home. Time is invaluable to anyone who has to work 40 hours a week. Being able to spend more time at home is a great motivator. 

Physical rewards

Two tickets to their favorite music artists can be great rewards that will surely make them feel appreciated. But, you’ll only find out things like these if you get to know them first. 

Learning opportunities

Giving employees a chance to improve their skills, or even learn new ones can be great for keeping them engaged and motivated. So whether it’s an interesting conference, or online course, regularly provide your employees with things that can help them progress as professionals. 

In Summary

So is driving team motivation using financial rewards good or bad? It’s certainly a good thing if done the right way. If you have a financial reward scheme that creates a culture of cut-throat competitiveness, then it can bring more harm than good.

But if you structure it in a way that enables employees to focus on the company’s goals rather than their financial dreams, then it can motivate an employee to perform in a way that’s beneficial to the company. 

At the same time, it’s good to mix in non-monetary rewards to your program. It’s a great way to foster team chemistry, and consistently make employees feel that they’re being valued by the company. The important thing is understanding what motivates your employees. Once you get to know their dreams and aspirations, pains and struggles – you’ll know how to motivate them best. 


About the Author

Aaron Chichioco is the chief content officer (CCO) and one of the web designers of Design Doxa. His expertise includes not only limited to Web/mobile design and development, but digital marketing, branding, eCommerce strategy and business management tactics as well. For more information about Aaron.

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