As part of a compelling compensation plan, here’s how non-monetary incentives can help attract, motivate, and retain high-performers for company-wide success.
Creating a compelling compensation plan is a top priority for companies committed to attracting and retaining top talent. A position’s salary or hourly wage, commission and bonus opportunities, and other monetary rewards are persuasive forms of compensation. However, non-monetary rewards have value, too.
Many organizations use non-monetary incentives and awards as part of their total compensation strategy, but there’s room for improvement. A recent study found that 45% of employees surveyed believe their company’s recognition program feels stale and disconnected from what’s important.¹
Let’s explore what we mean by non-monetary incentives and review examples, their benefits, and how to use them effectively.
What are non-monetary incentives?
A non-monetary incentive is a non-cash payment, reward, or perk a company offers its employees. These awards and fringe benefits may have cash value or be in another form that’s valuable beyond monetary incentives. When contemplating what types of compensation to include in an employee compensation package, these deserve attention.
Advantages of using non-monetary incentives
Non-monetary incentives and rewards offer lucrative benefits to employers and employees in far-reaching ways. Consider the following examples and advantages.
Make employees feel valuable
In terms of compensation vs. salary, over time, an employee’s pay and benefits may seem average at best. Implementing non-monetary ways of rewarding employees for excellent job performance can reignite their relationship with the company. Recognition illuminates for them how you see them as a vital part of the big picture.
Attract top talent
Non-monetary incentives can be woven into the fabric of the company culture and highlighted during talent acquisition efforts. All things being equal, a top candidate will likely choose the position that offers recognition and various incentive opportunities for a job well done.
Increase employee engagement
It’s not uncommon for employees to value job-related approval and recognition. Non-monetary rewards can light a fire under them that monetary rewards cannot. These incentives can get them excited and willing to go the extra mile to attain accolades and other goal-related rewards.
The concept can also apply to remote employee engagement. Consider encouraging peer-to-peer recognition for remote team mates as well.
Using non-monetary compensation to boost employee morale, strengthen company culture, and increase motivation can result in a bigger-picture goal of reducing employee turnover.
Types of non-monetary incentives
There are countless potential non-monetary incentives, capped only by an organization’s own creativity. These are the most common ones used in today’s workplace.
Private or public recognition is a powerful stimulus for boosting employee motivation and increasing job satisfaction. There are several smart ways to properly recognize a high performer. Consider public announcements, the employee’s name on the bulletin board, thank-you notes, and recognition during company meetings. Public recognition helps lift and sustain employee morale on both personal and organizational levels.
Awards and prizes
Prizes create excitement differently than financial compensation. After all, employees aren’t going to frame that big bonus check and display it on their desks. Trophies, plaques, and other mementos can be displayed and enjoyed for years. Prizes like gift baskets, flowers, paperweights, and other tangible items can make an employee feel appreciated, too. Additional perks might include a specified amount of work flexibility, free meals, or one-on-one time with a favorite personal or business coach.
Trips and experiences
Experiential rewards are powerful ways to incentivize an employee or team. Cruises, golf outings, spa days, escape rooms, and other experience-based rewards show appreciation. And when awarded to a group, they add a team-bonding element.
Employees are increasingly interested in achieving a healthy work-life balance. Many therefore appreciate time off. Whether it’s an extra day of PTO, a Friday afternoon off, or a longer lunch break, extra time off is a popular non-monetary incentive.
A glimpse into the leadership realm
Welcoming employees “behind the curtain” may be one of the most sought-after rewards, especially for employees with lofty career goals. Reward employees with one-on-one meetings, sitting in on a high-level leadership meeting, or lunch with a couple of C-suite members. Face time with top brass is an effective way to motivate, engage, and inspire ambitious team members.
Career development opportunities
Employees interested in career progression opportunities may be highly motivated by the chance to attend classes, conferences, mentoring by an industry expert, and workshops. These types of non-monetary rewards for high performance can simultaneously increase employee engagement and knowledge while shaping future successful managers.
How to use a non-monetary employee incentive effectively
As with any compensation, planning and executing non-monetary incentives well will help you achieve maximum impact.
Find out what employees want
Survey employees on the types of non-cash incentives that motivate them the most. Take their answers into consideration when planning your strategy. Be cognizant that reward preferences often differ among employees. For example, a person who doesn’t enjoy traveling might not feel “rewarded” by a free cruise.
Set clear parameters if needed
Some incentives, like recognition, can be spontaneous. Others must be outlined thoroughly. Create a clear, structured plan that’s easy to understand. Employees need to know what to do to receive the reward, what it will be, and when they’ll receive it.
Review the results
Measure the changes and outcomes that arise from any non-monetary rewards you offer. Key compensation metrics in this case can include employee satisfaction, greater productivity, and less turnover.
Non-monetary incentives are powerful tools to increase employee satisfaction and retention
Companies should never assume employees are only motivated by money. Implementing non-cash rewards as part of your compensation plan can positively influence the workplace in the short and long terms. Understanding your employees and their needs is step 1 toward a strategy that improves morale, increases productivity, and retains talent. If these goals align with your underlying compensation philosophy, give the concept its due.
1 2021 Global Culture Report, O.C. Tanner Institute