By BusinessWorld,Cedtyclea

Copyright bworldonline

PSYCHIC INCOME, as a tool for motivating people, may have already been abandoned. Has it been gradually replaced by the more muscular financial incentives like stock options, signing bonuses, tax shelters, housing allowances, and variable pay based on performance?

Psychic income does not at all involve money that can buy goods and services and a new car in the garage. (More than 40 cars is in another category.) Non-monetary incentives consist of psychological carrots like titles (executive assistant for secretary), ranks (vice-president for manager), or recognition memos for the 201 files (Your immense contribution to the success of our media event is a tribute to your selflessness in dressing up as a cactus, manning the company booth, and not charging overtime).

Psychic income can nourish the soul, even when the body is left with snacks. It can elevate status and encourage a constructive attitude towards work.

Still, when used as a substitute for real money, psychic income can invite cynicism. (You settled for that corny trophy after all you have accomplished?) Controlling compensation costs flat and substituting bonuses and merit increases with pats on the back may no longer work in the long run.

And yet, with all this misconception on the role of psychic income, have we cynically done away with corporate applause, relying solely on money to do all the stroking?

It is said that the Filipino audience is the most difficult to please, loath to give applause and standing ovations even after an outstanding performance on the stage. (Let’s wait for the curtain call.) Is it reticence in the Filipino culture that considers open appreciation too assertive?

Sure, there are exceptions in sports. Recognition after an international medal can come with cash rewards and free condo units. Sometimes, just the effort as an up-and-coming competitor is enough to attract endorsement offers. There’s no need to wait for a podium finish to merit the support of noisy fans.

Is the Filipino boss also miserly with praise? Leaders give the following reasons for restraining their urge to give lavish praise.

Compliments give the subordinate a misplaced sense of importance. This leads to arrogance, and subsequently, a demand for higher pay and a more senior position. It is better not to express approval for a job well done, as it raises expectations to unrealistic levels. Good performance is part of a job after all, why make a fuss?

Drawing attention to one individual for her outstanding effort is bound to displease others who helped her in achieving her goals. It is creating a “teacher’s pet” syndrome which alienates the classmates. Complimenting individuals undermines teamwork and future support from peers. The promotion of teamwork elevates the whole department and does not single out an individual for the group’s success.

A corollary of Murphy’s Law states that when things go right, the wrong person gets the credit. What if the boss praises the one grinning at his side for fine work when his sole contribution may have been flattering the CEO and always being a photo bomber behind the CEO?

It’s best to let achievements speak for themselves without needing any further comment. Anyway, there’s a rating period when these can be brought up (or conveniently forgotten). Still, appreciation of good work can never be too much, if delivered to the right party.

However, doesn’t a pat on the back for a good outcome promote good vibes? What does it cost anyway? Recognition, even from a colleague, should be welcome when given sincerely. It should not be made to do the work of effective compensation but merely complement it.

While psychic income may have fallen into some disfavor in compensation practices in the workplace, it is still something to value as part of simple social graces. A boss both hardworking and gracious with praise must surely invite outstanding work from those he deals with.

Anyway, it shouldn’t really be a choice of one over the other. Psychic and real incomes can be offered together in some combination. If one is to err in the proportion, it’s best to favor cash as it provides its own psychological lift… though often accompanied by a high level of stress.

Tony Samson is chairman and CEO of TOUCH xda