By the
Mind Tools
Editorial Team

Motivating Without Bonuses

Keeping Your Team Happy Without a Check

© iStockphoto

Cash is often no longer available as an incentive.

The recession has brought many new or previously little-used terms into our common language – from "subprime mortgages," "toxic assets," and "quantitative easing" to "cash for clunkers" and, of course, "zero bonuses."

It's a clever phrase, because technically, a zero bonus isn't a bonus at all. But the words give the impression that companies aren't breaking past promises to pay bonuses (albeit bonuses dependent on company performance), while at the same time give hope to workers that their bonuses will actually have some value again in the future.

The practice of paying bonuses is not dead. In the financial sector, many banks have continued to pay bonusesthey use the somewhat circular argument that they need bonuses to retain good people because their competitors are paying bonuses. But in some industries, bonuses have disappeared for now.

So, if you're a manager in one of these areas, what are your options for motivating people without cash bonuses?

In this article, we'll look at some creative strategies for motivating and rewarding members of your team in a down economy.


Some jobs attract large bonuses. Others don't. Significant bonuses are usually awarded when an individual's actions have a direct impact on the organization's revenue, which is why top salespeople will typically receive large bonuses.

By contrast, even senior managers in machine organizations may receive little in the way of bonuses – the success of the organization comes from the smooth functioning of its bureaucracy, which is not necessarily attributable to individuals' actions, or lack of them.

Non-Cash Financial Incentives

One of the most common non-bonus ways to reward and retain star employees is with stock or stock options. What's the difference between them?...

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