Five Ways to Reward Employees – It’s Not About the Money.

by | Jul 5, 2015

It was a perfect July 4th evening in Annapolis, Maryland. A soft breeze blew in from the water as the crowds gathered on the bridges, piers, and in boats moored within the harbor. Poof, poof, poof and the sky glitters with globes of red and blue twinkles. Poof, boom and white lights slither and sparkle in the night. Ahh, oohh and the honk of boat horns (an Annapolis tradition) celebrate each new burst. Yachts shout their approval with a deep, throaty blaaaam; sail boats toot their high-pitched eeep. For twenty minutes, the crowd cooperates, sharing space so that everyone sees, even with kids on shoulders. After the grand finale, cheers go up, horns blare and we walk away smiling having enjoyed the experience together.

What does the 4th of July fireworks have to do with leadership? Research shows that employees feel rewarded when they work together, cooperate and end up smiling and happy – just as we all did crowded together watching fireworks. The feeling of reward results in more motivation and productivity. Good news: you don’t need fireworks (or money) to make it happen. Thanks to neuroscience, now there are other proven options that activate reward responses in the brain. Here’s a brief overview of how the brain’s reward system works, for extra information you can also view these employee recognition statistics, these could help you improve on areas that may be a downfall.

There is strong research that supports the notion that we have a “common neural currency” for rewards. This means social and monetary “rewards” are processed in the same way and by the same parts of the brain. (The ventral striatum is most commonly associated with rewards and together with the amygdala, orbital and medial prefrontal cortex provide a reward network.)

Rewards elicit intrinsic or extrinsic motivation. Monetary rewards provide extrinsic motivation. While extrinsic motivation is good, research across cultures indicates that we humans are wired to respond strongly to intrinsic motivation such as fairness and cooperation. Of course, money is essential in any job. Many report dissatisfaction due to low wages, or receiving the wrong income due to a badly recorded payroll (this is easily solved by outsourcing payroll with services like cloudpay). However, using additional pay to reward your employees might not be the best option; intrinsic motivational rewards predict better job performance and satisfaction.

Here are five ways you can harness the reward network in the brain for good feelings and even better performance.

Status. Whether measured by skill, position, money or professional standing, achieving higher status motivates. Moreover, the opportunity to improve one’s social status elicits significant brain responses more so than activities without the opportunity for improved standing. To provide a sense of increased status, consider what is desired by the staff but is scarce. For individuals it may be time off, a flexible schedule, attendance at conferences, access to training and education. Anything that is special conveys status. For teams, team awards, even team tee-shirts can convey that these are the “cool kids.” For everyone, recognition from and access to the boss carries status.

Cooperation. There is ample evidence to argue that cooperating is more socially rewarding than competing and cooperation leads to more activity in the brain’s reward center. Reward feelings are not only associated with cooperation but also with working with people who are cooperative and trustworthy. The brain is wired to reward cooperation so you can help it along by specifically recognizing individual and group cooperative behavior. Use metrics that assess progress toward a shared goal. If there are people on the team from other offices or organizations, let their bosses know that their cooperative behavior has benefited the team.

Fairness. Perceived inequity in exerted effort can dampen employee morale and performance. In fact, people are willing to incur a personal cost solely to punish others whom they consider to have behaved unfairly. Perhaps you have seen a team that is willing to remove a non-performer even though it means additional work for other team members. Studies using economic games indicate that fair “offers” led to higher happiness ratings and increased activity in reward regions of the brain. To activate the powerful response to fairness, stand up for those who consistently do their fair share. Praise them and give them opportunities for more status. Similarly, don’t let the free-riders slide. Address the inequity in performance. This, too, will activate the reward network for the high performers.

Reputation. People activate the reward network when they perceive themselves as having a good reputation and social approval. In addition, how a person is viewed by others (reputation) is an important factor influencing cooperation rates. You can help top performers grow their reputation by giving them public credit for their ideas, having them speak at conferences, mentoring them for more responsible assignments, asking their opinion, and encouraging them to write about and publish their work. Reputation is important in every circle and if you’re trying to improve the reputation of your business as a whole, you should signup for a free trial of repcheckup.

Fun. Find ways to celebrate achievement and cooperation. If your team is working toward a big, shared goal, identify mini-milestones for mini-celebrations. For example, bringing in donuts, cookies, or a cake with “congratulations on the milestone” means a lot. Make time for a big recognition for a big accomplishment. Lastly, several neuroimaging studies show reward activation in the brain comes from humor, emotionally positive words, beautiful paintings and pleasant music. Fun, laughter and pleasantness go a long way for the brain’s reward network.

Of course, money is good, but you also have non-monetary ways to create feelings of reward for your staff and teams through the skilled use of status, cooperation, fairness, reputation and fun. It might not be the same as fireworks, but, then again, from the brain’s perspective, it might not be that far off.

To learn more about ideas regarding non-monetary employee incentives and rewards, head over to Blueboard.

Now, isn’t that an idea worth celebrating?


Izuma, Keise, Saito, Daisuke, Sadato, Norihiro, Processing of Social and Monetary Rewards in the Human Striatum, Cell Press. April 24, 2008.
Tabibnia, Golanz, Lieberman, Matthew, Fairness and Cooperation are Rewarding: Evidence from Social Cognitive Neuroscience. The Semel Institute for Neuroscience and Human Behavior, University of California.
Zink, Caroline, Tong, Yunxia, Chen, Qiang, Bassett, Danielle, Stein, Jason, Meyer-Lindenberg, Andreas. Know Your Place: Neural Processing of Social Hierarchy in Humans. Cell Press, Neuron 58. April 24, 2008.
Decety, Jean, Jackson, Philip, Sommerville, Jessica, Chaminade, Thierry, Meltzoff, Andrew. The Neural Bases of Cooperation and Competition: an fMRI Investigation. Elsevier Inc. 2004.
Seymour, Ben, Singer, Tania, Dolan, Ray. The Neurobiology of Punishment. April 2007, Volume 8.


Author Byline: Founder and CEO of Blue Fjord Leaders, Shelley Row P.E. CSP, was named by Inc. Magazine as one of the top 100 leadership speakers. Professional engineer and former senior executive, she was recognized as one of the best minds in advanced traffic management systems.

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