Every company has cash. If that's what a company wants to use as the differentiating factor, someone else will come along (usually sooner rather than later) with a fatter wallet and entice away the best people.

Let's face it, the best people in a company have the most options. If they want money they'll go get it. I agree what most people are looking for is a competitive compensation package in a place that allows them to contribute, participate, feel safe, and just belong!

The best performers are smart enough to know that the intangibles of a company and how well a company "walks the talk" of the company's personality are the key factors in determining a long term relationship! Just like any other long term relationship!

While I am a proponent of the non-monetary and effective recognition items outlined, the idea that "money is the last thing one should be thinking about" in terms of motivation can actually reinforce a company's rationale of stinginess. Companies may often have a skewed prioritization of their budgets. True examples: A $100 bottle of wine with a pricey dinner or a business-class flight from London for a one hour meeting in San Francisco receive no scrutiny whereas a $10 Starbucks gift card to recognize a staff member for going above and beyond on a special project warrants further evaluation. The examples of corporate malfeasance are endless.

If a company is going to ask an employee to do more or be doled out more responsibility such as "presenting to executives or handling negotiations," it better well be part of their job description or career path. If it falls outside of an employee's regular scope of duties, then it needs to be recognized as such and be held in account for the employee's next performance appraisal as a consideration for promotion.

"Contributing to something big" without the monetary compensation can lead an employee to feel taken advantage of now matter what lip service of praise is given. The rationale that can be reinforced is that if an employee is willing to do more work or take on more responsibility for the same amount of money, then why would the company pay more salary? Money is part and parcel a significant factor of respect and sign of recognition in the corporate world. Why else is CEO pay the highest it's ever been? Lavish signing bonuses, retention bonuses, and corporate perks? The money that is wasted, or rather expensed by senior executives is often the amount that would keep an employee more motivated-- or keep an employee, period.

It's time we venture out of the ivory towers, conference rooms and corner offices into the matrix of cubicles, factory or retail floors and get an emic perspective of the people who make it all happen. Valuing employees (or not) lies at the heart of a company's culture.

Although all of the ideas given for recognition and retention are good, they may not be a replacement for monetary reward. Feeling like a recognized contributor for a worthy cause is a powerful motivator, but not in the absence of financial reward that shows an employee in a tangible way, how much the company thinks one is worth.

Retaining star performers has become more difficult than ever today. Retaining Gen-x performers is even more difficult.

Working on the situation from the comapny or manager's angle the points highlighted may suffice.

looking at it from the Gen-X employees' angle. These employees are more well informed and set their personal goals faster and more aggressive compared to older counterparts. They feel more secure and comfortable when they hop to different companies. This can clearly witnessed by watching the increasing attrition rates for past two years.

A manager should have a magic wand to retain them. What spell to cast to retain them has to be identified within 2 to 3 months of joining, else this employee is bound to quit within 1 to 2 years.

Non-monetary rewards can never be a replacement for an appropriate level of cash compensation. It may be that budget cuts necessitate trimming but it shouldn't be at the compensation level. These expenses shouldn't be considered discretionary and as the saying goes, "you get what you pay for".

As a matter of good human resource practice, a corporation should have development opportunities built into their employee career plans. And if an employee excels under these circumstances, s/he should expect to be recognized with a "thank you" as well as being paid a bonus or receiving a promotion.

One inspiring book on this topic is: 1001 Ways to Reward Employees: 100's of New Ways to Praise! Revised and Updated 2nd Edition. I used it in a prior management position when the company I worked for merged and cuts were made.
Money or not, employees do have a need for recognition. I kept the "non-cost" rewards working even when funds became available for bonuses and such. The department I took charge of during the merger had a history of fairly high turnover and for the 5 years between mergers, the team virtually remained the same. A first!
What worked best and will work with the x-generation is a chance at the spotlight (e.g. presenting a project at hight level Boards), chances to develop and learn, priviledged flexible hours / vacation day. Also, for team dynamic, "celebrating" sucesses and quick wins together keeps the focus on achievements instead of on what still needs to be done. One of the way we achieved this as a team was to have a sprakling apple-juice cocktail to start the day together when a specific milestone was reached. (7$)

With my company, I have found that having a good work/life balance and aggressively following it is a great method for retaining talent. Yes, employees know they are expected to work hard, but little things do matter. Money might be a great motivator but it’s not the end all for every situation.

Our company is incredibly family friendly and we offer benefits not available at other places. We attract top-notch employees by playing them up. Many employees will choose a company where they feel appreciated or know they can still make their kid’s baseball game over a company offering a slightly larger salary but less sway on personal time.

For some people, virtual commuting, extra days off, and employer paid education far outweigh occasional bonuses. I run my business like a family, and like families, we are flexible. We know there are times when you are going to be late or need to leave early and we have no problems with that. We also find our employees like the fact they can work from home or offsite. This allows them to break from the normal workweek if needed. Building practices like these into your business operations, presenting them to potential employees, and making sure they are used can be a powerful way to make sure you attract and retain the best talent.

Nancy Lyons
CEO
Clockwork Active Media Systems
http://www.clockwork.net/

One of the most common challenges faced in Human Resource Management is that there is no general answer to the question posed above. It is easy to loose sight of the fact that even large organizations are made up of unique individuals with unique expectations of themselves and of the organization, with varying attitudes and ambitions in life. It is important to realise that different things motivate different people, and in trying to find a common answer, we will always end up with one that is ever destined to be only partially successful.
Today, we have tools that enable us to keep records and meaningful data about individuals and the performance. We have the 'processing power' to work out what stimulates each individual. So even in a large organization, we can still know what motivates and stimulates each individual. This is valuable information as it not only helps reward above average performance, but also identifies and rectifies below average performance of individual employees. For some, it is money that motivates them, for others it is something else. Giving them confidence that their performance will be noticed and recognised by the organization and recognising good performance with rewards tailored to individual employee needs is the way forward.

Yes, it is true that people work for money. Otherwise what is the purpose of doing a job? So "Money" is the most crucial thing that influences the people to change there jobs. But when it’s come to retain people, though we discuss facts about how to motivate individuals by rewarding them, I personally think all of these facts are parts of "making a good working environment". Because if your working environment is not pleasant one and frustration is all over the place, you definitely feel uncomfortable with your job and you will be pushed into a situation like job shifting. So making a good working environment is cannot only fulfill by improving employer and employee relationship (though it is very much essential in the process). We need to build strong interpersonal relationships between workers in a company to work as a family (single unit). Respect each and everyone, care everyone, do effective communication between individuals and improve team work while identifying champions will be the essential parts of establishing this kind of a process. So if you feel your working environment is just like your home and all the people around you as your family members, people think twice about job shifting