How effective are incentives in driving green behavior? Analyzing monetary and non-monetary incentives in the hospitality industry

Abstract

This study employs a cross-sectional survey of 383 Sri Lankan hospitality employees to examine the impact of monetary and non-monetary incentives on Green Employee Behavior (GEB). Using Structural Equation Modeling (SEM), the study tested relationships between incentives and workplace sustainability actions, distinguishing between in-role and extra-role behaviors. Findings show both incentive types significantly enhance GEB. Monetary rewards, explaining 36.3% variance, primarily drive compliance with green policies, whereas non-monetary rewards exert a stronger influence on voluntary, value-driven behaviors that build long-term green culture. These results highlight the complementary role of incentives: monetary rewards secure short-term adherence, while non-monetary rewards foster sustained commitment to environmental practices. The study provides practical guidance for managers and policymakers in designing dual-incentive strategies that balance immediate compliance with enduring green engagement. By integrating such schemes, hospitality firms can reduce their environmental footprint and align with broader sustainability goals. Beyond managerial implications, the study adds to the growing literature on workplace sustainability by empirically demonstrating how incentive structures distinctly shape in-role and extra-role green behaviors. This evidence emphasizes the importance of tailoring incentive programs to nurture both compliance and proactive contributions to organizational sustainability.