Switching to Non-monetary Rewards and Recognition
Several Reasons Why Non-monetary Rewards Are Better Than Monetary Ones
Most businesses try to take steps to recognize their excellent employees. It shows them they are valued, builds morale, and often results in better performance. However, the default mode of recognition for many companies is usually monetary rewards. This seems to be waning though, as many companies are beginning to realize that non-monetary recognitions are the way to go. In fact, a report has put the percentage of companies that use non-monetary rewards at 80%, but what about the remaining 20%? The major reason for this is that these businesses are unaware of the benefits of non-monetary rewards. Many of these companies also do not know how to implement non-monetary recognition for their employees.
Benefits of Non-monetary Rewards
There are several reasons why non-monetary rewards are better than monetary ones. Some of them are explained below:
Memory Value: Employees are more likely to remember non-monetary recognition when compared to monetary rewards. One reason for this is the separable nature of non-monetary rewards. People often plan their finances by designating money to fixed and variable expenses, and other categories. The odds are employees will take monetary rewards and include them as part of their regular salary when planning. The monetary rewards then lose their value because they are not distinct from any other of the employee’s money and are being used for regular expenses. However, with non-monetary rewards, an experience is created. It could be a gift card to a restaurant, or it could be an all-expenses paid trip. With these, employees are going to separate them from their regular possessions and the memory value will be long-lasting.
Cost: The cost of monetary rewards far outweighs that of non-monetary rewards. The biggest cause of this is that companies do not know how to weigh certain rewards. If an employee was offered $10,000 as a reward, surely a manager has to be offered more, even if he did a less impactful thing than the employee. This inability to properly weigh rewards based on impact and the constant shift in perceived value makes monetary rewards more expensive and difficult to manage.
Flexibility: Non-monetary rewards are more flexible than cash rewards. If employees regularly complain about gas being expensive, a possible non-monetary reward can be a gas station gift card. If people are complaining about muscle stiffness due to sitting all day, you could send them to a spa for any service they desire. Also, non-monetary rewards can be tweaked to be aligned with company culture. The ability to constantly develop and design new non-monetary rewards keeps it fun for the entire organization. The element of surprise is also better when compared to cash rewards, where employees know for sure what they are getting beforehand.
Social Reinforcement: Social validation is important, especially in the workplace. This is one of the actual reasons for giving employees rewards in the first place. With non-monetary rewards, employees are likely to get that peer recognition. You will never hear an employee ask another about the $10,000 dollars the company gave him. However, a sponsored trip will forever be a topic of discussion. Photos will live for years on Facebook, and it will be the topic of lunch room chatter.
Understanding the benefits of non-monetary rewards is one thing, however, implementing them, is another. We can help you manage the creation and deployment of your non-monetary rewards program. Our catalogue of rewards includes multiple items to choose from. If you are looking to implement a non-monetary reward program in your business, then Online rewards is the way to go.