Non-financial Incentives According to Social Exchange Theory

Social Exchange Theory looks at how people in everyday life create and maintain relationships. The theory assumes that individuals are rational beings, and if a relationship causes more negative than positive, they will leave.

In business, good employee relationships is a pivotal key to success. If employees don’t feel appreciated, social exchange theory suggests that they, too, will leave and find a new job.

How can you make sure employees feel valued? In a perfect world, a business would financially compensate each employee with bonuses, promotions, and raises. That’s probably unrealistic!

So, how can appreciation be shown without large monetary obligations?

The key is non-financial incentives. These provide employees needed motivation and show that their hard work doesn’t go unnoticed.

Be creative! Having unique rewards can energize employees and set a positive tone toward the work they put in. Do something as simple as having a “Bring your dog to work” day or sending a handwritten thank-you note or postcard to their home.

Have “traveling trophies” that your people can pass to each other. One can say “thanks,” another can say, “great job” or anything else that you want to recognize! Taking different employees to lunch can demonstrate gratitude. If someone works a lot of overtime, let them work from home! Showing simple appreciations goes a long way.

There are limits to non-financial incentives!

Praise becomes washed out if overdone.

Don’t always pick the same people or show favorites for it can negatively shift employees’ attitudes.

Don’t provide the entire office rewards if only a few people deserve it.

Show appreciation appropriately and they will stay!

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