Cash, non-cash, or mix? Gender matters! The impact of monetary, non-monetary, and mixed incentives on performance

Abstract

Standard economic theory asserts that cash incentives are always better than non-cash ones, or at least not worse. This study employs a real effort experiment to analyze the impact of monetary, non-monetary, and a combination of monetary and non-monetary incentives on performance, where non-monetary incentives are defined as tangible incentives with market value. Our overall results suggest that there exists no significant difference in performance in response to monetary, non-monetary, and mixed incentives. However, gender-based differentiation reveals a different picture: the performances of men and women depend upon the type of incentive used. Whereas men’s performance is significantly higher in response to monetary incentives compared to non-monetary ones, women’s performance is significantly higher in response to non-monetary incentives. The gender differences in the effectiveness of monetary and non-monetary incentives do not seem to be triggered by the perceived attractiveness of the non-monetary incentives but rather by the differences between men and women in the feelings of appreciation and perceived performance pressure in a tournament setting. Therefore, our results indicate that gender differences must be considered when implementing incentives.

Beyond monetary motivation: the moderation of Hofstede's cultural dimensions

“…The current study has confirmed the significance of nonmonetary motives on performance among employees with different cultural values. Nonetheless, previous studies (Hammermann and Mohnen, 2014;Sittenthaler and Mohnen, 2020) have also demonstrated the significance of both monetary and mix incentives method on employees. Accordingly, the study believes that human resource managers should not focus on solely using monetary or nonmonetary motives in their quest to motivate the employees.…”

“…Nonmonetary motives have motivational properties inherent in them, highly visible and can be evaluated independently of other income (Sittenthaler and Mohnen, 2020). Previous studies (Brunetto et al , 2017; Jeffrey, 2009; Sittenthaler and Mohnen, 2020) demonstrated the effectiveness of nonmonetary motives on performance. According to Redmond and Sharafizad, nonmonetary factors increase discretionary effort and performance.…”

Employee Retention in the Service Industry in Malaysia

“…Many businesses and organizations use a variety of incentives or rewards to motivate staff to improve their performance (Sittenthaler and Mohnen, 2020 ). Reward can also be defined as a variety of one-of-a-kind advantages delivered to employees as a substitute for effort or non-trivial monetary value (Choi and Presslee, 2020 ).…”

The Effects of Monetary Incentives on Physicians’ Effort and Patient Satisfaction: Understanding the Links between Monetary Incentives and Physicians’ Effort

“…Since improving patient satisfaction is also beneficial to the hospital itself, hospitals also encourage medical staff to improve patient satisfaction through their own human resource policies. However, whether he monetary incentives would enhance physicians’ job performance in terms of patient satisfaction is still unknown [ 8 , 9 ]. One of the core dilemmas is whether monetary incentives are a good choice.…”