An analysis of the utilization and effectiveness of non‐financial incentives in small business

This research was conducted in order to determine what variables would give small businesses (defined as any firm with less than 100 employees) an advantage versus larger businesses in attracting and maintaining employees while optimizing their performance. Job enrichment, employee recognition, pay equity and managerial skill do affect employee job satisfaction in small business. However, there was sufficient evidence to indicate that income was, at the very least, a moderating factor with regard to the success of non‐monetary incentives. Therefore, the variables studied are most effective when supplemented with an income that allows employees to meet physiological and security needs for themselves and their families. What this article demonstrates is that by increasing job satisfaction via job enrichment, employee recognition, internal pay equity and the use of skilled managers, smaller firms can increase productivity and attractiveness to existing and potential employees.