Not just for the money, but what for?

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One of the significant challenges in personnel economics is aligning employees' interests with those of employers. While incentive theory has primarily focused on monetary incentives, recent empirical findings indicate that these can sometimes backfire. The notion that everything has a price is not applicable in contexts where prices are not accepted. When considering relationships and the importance of intentions, nonmonetary incentives—such as attention and respect—may prove more effective. This work examines the effectiveness of nonmonetary incentives through four empirical studies that explore why and how these incentives influence behavior, as well as the differing impacts of monetary versus nonmonetary incentives. Psychological approaches to work motivation provide a framework for understanding variations in performance. The research investigates whether purely symbolic rewards can enhance performance by appealing to competitive preferences and feelings of pride and shame. It also delves into group affiliation's effects on team dynamics, including in-group favoritism and its implications for output. Lastly, the study addresses the reasons for using tangible incentives alongside monetary ones and how these elicit different reactions from recipients. The findings underscore the critical and distinct role of nonmonetary incentives in the workplace.