I agree with you that it is critical to have intangible rewards, such as a good working environment, friendly co-workers and management, and recognition for your achievements. 

My company offers, among other things, a soda fountain in our break room, where you can fill'er up to your hearts content.  And every year or so, we have an election for either Pepsi or Coke products.  It is one of the funniest things I've seen, the friendly-but-politically-charged environment we experience as we approach election day.

I think some companies tend to overshoot the mark, though, and reduce financial incentives in favor of these intangibles.  I've also noticed that when bonuses are unexpectedly slashed or cancelled, there had better be one heck of an intangible benefit replacing it.  Otherwise, morale takes a nose dive.