Non-Monetary Rewards In The Workplace

Non-Monetary Rewards in the Workplace

As we enter into the 21st Century, we see many changes in different facets of

our life. One of the many changes is the ever evolving area of the workplace.

Employers are encouraged to change the way a business is run to fit the changing

needs of the employee. As the employee needs change, so does the compensation and

reward system used to increase employee retention and productivity. This different

type of compensation is seen in many ways. Therefore, it is important to explore the

different types of compensation to define them, reveal how they are executed, and

how effective they are as opposed to traditional monetary rewards.

Traditional rewards such as money or cash bonuses need little explanation. This type of reward and compensation system is still the most commonly used in the work force today. As a result, employees have come to expect this type of compensation. Therefore, it is usually the starting point of negotiations when a person is considering several opportunities. Employers understand how to execute this system but many do not understand when to execute this system to maximize effectiveness. A study conducted by Accountemps suggests that financial executives (CFOs) prefer cash bonuses to non-monetary rewards. "Forty-three per cent of (CFOs) cited bonuses as the most effective way to acknowledge a job well done." (Cash Still King: Bonuses Best Reward After Major Projects, CFOs Surveyed Say) Non-monetary rewards came in 2nd and 3rd when used for rewards after major projects. The results of this survey should not come as a surprise. Employees expect to be compensated for completing a daunting task. However, the survey does not show how an employer can retain good employees when the budget does not allow for a cash bonus or the employer wants to say thank you for completing a routine task. Non-monetary rewards are excellent for many different reward and recognition programs.

Over the last decade, there has been several research studies conducted regarding reward and recognition programs employers can use to increase employee retention and productivity. As a result of these surveys, many types of rewards have been introduced to the work force. While there are many reward systems now available for employers to utilize, an employer must first understand why it is important to have such a program in place. "Intrinsically most employees have a desire to feel needed, valued and appreciated in their role. Research shows this type of reinforcement not only results in happier employees, but also a more productive workforce. Maslow's well-known theory of motivation...suggest that our ego needs are met on the job when recognition is given for a job well done." (Non-Monetary Rewards As part of the remuneration equation) Therefore, it is imperative for any organization that desires to achieve a greater level of success to implement a rewards and recognition program. Some examples of non-monetary rewards would be to offer extra time off from work, say thanks, give public recognition, allow casual dress, allow flexible hours, give tickets or gift certificates, use trophies and plaques, write a letter of praise, put the employee name in a newsletter, give extra responsibilities, purchase inexpensive items and give as a prize, or ask them for input on a major project. Whatever an employer decides to implement, great consideration should be taken to ensure that the program is designed with the employee in mind.

As employers begin to realize the benefits of rewards and recognition program, more effort will be given to expansion of the program for greater results. Employers must be careful to ensure that the program that is implemented has a successful execution for maximum results. There are several ways an employer can ensure program success. An employer must first determine the purpose of the reward program. Also, an employer must decide what behavior is being targeted or what is the desired goal to be achieved. Once this has been determined, the reward system must be fair and without partiality. An employer must be sure to communicate the purpose of the reward to the employee so that the desired results can be achieved. The reward must be personalized whenever possible. It should also provide variety and be given frequently. However, the reward should not be given so frequently that it would create expectancy from the employee. The reward should be designed to fit the size of the effort or the event. The reward system should be used in addition to monetary compensation and not in lieu of monetary compensation. Non-monetary rewards should not be viewed as a replacement for monetary compensation for a job well done. Employers should keep in mind that monetary and non-monetary rewards can both be motivators.

Since employees consider monetary rewards standard compensation and non-monetary rewards are viewed as employment perks, many employers compare the effectiveness of monetary and non-monetary rewards to determine which one