Are Non-Monetary Rewards In The Workplace Beneficial

Are Non-monetary Rewards in the Workplace Beneficial?

Many high performance companies understand the importance of offering awards and incentives that recognize, validate, and value outstanding work. They help keep the employees motivated and productive, and are effective methods of reinforcing company expectations and goals. When the management of a department gets together to put an incentive program into place, they have to decide which awards are worth the effort. They also have to consider the perceived value of earning the award, as well as the effort that is required to earn it. Management and employees may perceive non-monetary incentives to be more valuable than the retail value of the award in cash. Non-monetary rewards in the workplace can be creative, powerful tools used by leaders to create a motivational environment, in which employees may find to be meaningful, which will help them work at their optimal levels to accomplish company objectives.

The Purpose

Rewards are defined as something that increases the frequency of an employee action. This definition points to an obvious desired outcome of rewards and recognition, which is to improve performance. It's important for employees to be reminded that extra efforts are noticed and rewarded. Non-monetary recognition can be very motivating, helping to build feelings of confidence and satisfaction. The purpose of non-monetary incentives is to reward associates for excellent job performance through opportunities (Ballentine, Kepner, McKenzie, & Wysocki, 2003). Retention research identified consistent employee recognition as a key factor in retaining top performing workers (Ryan, n.d.). Recognizing employees provides them with practical feedback, it makes it easier to get the work done and it helps them be more productive. Providing non-monetary rewards also helps management achieve their job goals.

The Value

Non-cash incentives have valuability, which can increase motivation because they are earned rather than purchased. These non-cash incentives capitalize on affective reactions to the award. They increase the utility value of the award and its significance. They also have separability, meaning individuals separate the award from other compensation, which makes the award unique, causing their performance to stand out. Non-cash incentives are also more socially acceptable to acknowledge. Most people are uncomfortable bragging about cash awards, but enjoy talking about the tangible non-cash incentives they have received (Jeffrey, 2003).

The Symbolism and Effectiveness

Non-monetary rewards, such as plaques and certificates, can be effective for both symbolic and emotional reasons. Many people feel these awards have memory value because they continue to have meaning long after a cash award would be spent. They have trophy value as well because the award can be shown off to others. When management considers giving non-monetary awards to employees, they can be creative and use items that are very unique, and reflect a particular organization or team goal. Non-monetary rewards are also less costly than cash awards, but they still provide the same level of performance improvements.

The Most Effective Non-monetary Awards

What types of non-monetary awards are most effective? The type of recognition employees appreciate the most is to be recognized by people they work directly for. According to research performed by Bob Nelson (2004), 78% of employees indicated that it was very or extremely important to be recognized by their managers when they do good work. The number one choice for recognition is sincere praise given in a timely manner, such as thank you notes. According to research performed by Allen and Helms (2002), they confirmed the importance of regular expressions of appreciation by managers and leaders to encourage behavior of employees to reach strategic goals. Developmental opportunities, such as being assigned to special projects, can also be a powerful form of non-monetary recognition. Being chosen to accomplish a company initiative is motivating. It helps employees gain new skills and experiences, demonstrates trust in their abilities, and adds variety to an individuals work.

Successful Recognition

Janet