Top 12 Non-monetary Incentives To Motivate And Retain Your Employees
What kind of incentive program do you think of when rewarding employees? Gift cards? Cash incentives? Bonuses?
Yes, when it comes to a reward for a job well done, it’s easy to think monetary rewards are the answer. It's probably the most traditional way to reward employees for their hard work.
But the numbers fail to leave a lasting impression. In fact, studies show that cash bonuses for top employees only really make a difference about half of the time.
Employees, nowadays, look for more personalized, non-monetary incentives from the organizations they work for. Gone are those days when monetary rewards were the only acceptable option to retain and motivate your employees.
According to a study by the Incentive Research Federation for the Incentive Marketing Association.
65% of employees prefer non-monetary incentives instead of monetary rewards.
Financial rewards and motivation can help attract talent to your organization. This type of motivation is also called Extrinsic motivation because money acts as an external motivator. But non-monetary compensation acts as an intrinsic motivator that helps retain employees in the long run.
There are multiple kinds of non-cash rewards that might work for you and your employees.
But, before that, it is essential to know about the benefits of non-monetary incentives.
What are the benefits of non-monetary incentives?
Research shows that employees show greater enthusiasm and appreciation towards non-monetary incentives. A lunch with a manager, a trip to a hill station, or an extra day off is much more impactful than an extra amount of money.
Cash awards tend to easily get lost in the shuffle. It may get spent on bills or routine expenditures with no long-lasting association to the behavior for which employees got the reward.
Non-monetary incentives leave a more emotional impression on employees and they feel more recognized and engaged. Besides, principles of psychology suggest that people perceive non-monetary incentives to be more valuable than the retail value of that award in cash.
Let’s look at some of the benefits of non-monetary incentives in detail.
1. Non-monetary incentives have separability.
Cash awards for exceptional performances do not stand out anymore. You see, psychologically, people tend to categorize sources of income. They’ll combine salary and cash bonuses as part of the same source of income since they are both monetary and they earn both of them at work.
But non-monetary incentives, like paid leaves, social recognition, or vacations, stand out and are easy to separate. These create experiences and add more value for the employees rather than a cash amount, which they won’t even remember what they spent it on.
2. Fringe benefits attract Gen-Z and millennials employees.
Gen-Z and millennials are most likely to value money over non-monetary considerations as they step into entry-level jobs.
However, compensation is not the only criteria young employees look for in jobs. After compensation, the next questions employees ask today are about employee engagement, morale, flexibility, and work culture.
Freshers are especially attracted to the fringe benefits that companies offer. An extra day off, employee perks, and wellness initiatives help in retaining the gen-z and and millennial employees in your company.
In fact, a Gallup poll found that employees rank employee well-being as one of their top expectations from employers.
3. Non-cash rewards are more memorable and have an emotional value.
Recognition at the workplace like a meaningful ‘well-done’, a personalized thank-you note, or a special shout-out on social media can be more memorable than receiving an extra cash amount.
In fact, an invested employee will always find a non-cash reward more emotionally valuable. When employees receive something which they can keep and show or experience, it adds more emotional value to the reward.
4. Non-cash incentives are more acknowledgeable and comfortable to talk about.
Your employees want to talk about the rewards or incentives they receive for their success and hard work.
Experiences help spark conversations. Most of your employees might be more excited and comfortable talking about the lunch they had with their manager, a trip, or the workshop they attended rather than any cash prize.
Now that you know all about the benefits of non-monetary incentives, you need to figure out which incentives work best for your employees and your company.
To make your job easier, here is a list of a few of the top non-monetary incentives. These can help promote your long-term employee engagement goals and retain top talents at your company.
The top 9 non-monetary incentives for employees that actually work.
1. Flexibility at work.
Flexibility at work indicates the ability to decide when and where employees work. It can be a tremendous non-monetary reward. Offer your employees telecommuting options, such as granting them the opportunity to work from home once a week or setting their working hours at work.
Offering flexibility can help employees maintain a good work-life balance. An employee would love to work according to their schedules. It will result further in:
- Employee loyalty and engagement
- Increased organizational commitment
- Higher job satisfaction
2. Rewards and Recognition.
Having an effective rewards and recognition program for your employees can be a great means for an incentive. Recognition of employees who have been working hard can mean a lot to them.
A good rewards and recognition program includes personalized or creative approaches. It can consist of:
- Sending a thank-you email or a handwritten note,
- Rewarding employees with gift cards,
- Praising and mentioning their success at a meeting or in front of colleagues, or
- Recognizing them on social media.
Calling out the successful employees publicly for their achievements makes them cherish such moments for a long time.
3. Provide an extra day off.
Who doesn’t love an extra day off apart from the weekends?
Everybody loves some extra time off from work to maintain an excellent work-life balance. That is why granting a day off outside of annual leave is a perfect employee incentive.
Getting a day-off as a reward will make employees feel recognized for all the hard work and motivated to work harder.
4. Provide time for volunteer work.
Offer employees some time out of work to volunteer for anything that they would want to.
Working at the same place with the same people every day might feel mundane and too self-serving. Allowing going out and serving the community can boost employee morale.
Moreover, it adheres well to the company image too. So, it’s a win-win situation for both employees and the company.
5. Provide extensive training plans.
Employees often find ways to take courses and training in their area of work to improve themselves at work or for personal development. But, it often happens that they might not get access to such training or workshops.
Providing training plans or making accredited courses or workshops accessible can be a huge help to your employees. It can improve their skills and make them feel like you care about their personal growth.
6. One-on-one lunch.
Sometimes, you need to go beyond giving public accolades and just sending a thank you email to your employees to appreciate their success and hard work.
What’s better than to bond over food with employees who appreciate one-on-one’s personal gratitude expressions. Spend some quality time with employees during a quality lunch.
It’s a great opportunity to get feedback from your employees and address your employees’ issues. You can also show your gratitude towards their hard work.
7. Experiential Rewards
Experiential rewards are becoming popular among employees as a means of employee recognition.
An experiential reward is an event or experience that an employee earns. Be it a trip to a hill station, a day at the spa, a pass to a match, or anything your employees might like.
Choose experiential rewards based on the personal interests of your employees.
Employees consider these rewards more thoughtful instead of a cash prize for their hard work. These rewards give people the chance to create memories, which influences behavior rather than the actual experience itself.
Also, with the rising cost of living, employees can do something they love without having to worry about what it costs. Whether it's a paid holiday or a simple restaurant gift card, these rewards sit outside of the weekly or monthly budget.
8. Offer to mentor an employee.
One great personal reward would be to offer your guidance and mentorship to your employees.
The best employees would always be willing to learn more from the company’s leaders and get great empowerment and experience for them.
Help your employees by sharing your experience and tips and tricks to use at work and be successful.
9. Let employees have more autonomy at work.
Your employees love their independence.
Giving employees the autonomy to perform a task on their own without someone else or you micromanaging them would be a great opportunity for your employees.
When they get the freedom to work in their own way, they become motivated to work well. They want to show what they’re capable of, and engagement levels naturally rise.
An Effectory study shows that 79% of autonomous employees are more engaged than employees who lack autonomy. In addition, when employees feel trusted, they carry a stronger sense of responsibility for their work and are more likely to stay at a company longer.
10. Give employees leadership opportunities.
It’s true that some employees may be happy with the current level of challenge and responsibility they have. However, some may be looking for ways to apply their new skills or the experience they gained.
Leadership provides the right amount of challenge and responsibility which can serve as a great reward for some employees. It makes them feel trusted and shows that you recognize their abilities.
Offering your employees leadership opportunities can be a huge motivator for them to rise and strive. It’ll show that you value their judgment, which can be a significant boost to their self-esteem.
Offer your employees leadership opportunities also ensures better use of autonomy at work.
11. Ask for new ideas, feedback, and suggestions
Being recognized for skills other than those we are employed for can encourage a high level of motivation.
Allow employees to express their creative side and bring their ideas to projects. Ask for their help in something you're struggling with and use their insights to improve things around the office.
Invite them to contribute ideas for new products, branding or a logo. It’ll build their confidence and show that you understand their worth.
And don’t only ask for the feedback, show you’ve listened and considered their opinions. This will make employees feel they’re an important part of the company.
12. Provide employees with wellness solutions
In her new book Happiness At Work, Jessica Pryce-Jones calculates that the average person will spend 90,000 hours at work over the course of their lifetime.
That’s a substantial amount of time. It's vital that employees remain healthy and stress-free during their work time to be truly productive.
Employers are recognizing the need and benefits of not only encouraging, but advancing work-life balance.
One way to do that is to implement corporate wellness programs that promote physical and mental health and well-being.
Encouraging wellness among employees helps decrease job turnover, increases job satisfaction, manages stress, reduces absenteeism, etc. It also helps in cost saving the extra expenses on preventive employee illness.
Now, we know all about the different kinds of non-monetary incentives that you can offer your employees. So, make sure to give these a go.
Hand Out Non-Monetary Rewards With A Reward And Recognition Platform
R&R technology can help make handing out non-monetary rewards easier and more effective. With a dedicated platform, handing out any kind of reward or recognition can be done in the click of a button.
Our all-in-one employee engagement solution, Vantage Circle, is designed to make rewarding employees quick, easy and effective.
Vantage Rewards facilitates peer-to-peer recognition, which is shown to be 35.7% more likely to have a positive impact on financial results than manager-only recognition.
If you want to thank-you colleague for helping you on a project or for always coming up with new ideas, you can use our Appreciate feature to acknowledge colleagues on the go.
You can wish your peers on special occasions such as work anniversaries, birthdays, festivals, etc.
You can give out reward points to top performers who can use them to redeem gifts, merchandise, and experiences of their choice. From a relaxing spa to a full-course meal in a restaurant, you can reward employees with the perfect experience package.
Our wellness solution Vantage Fit offers fitness challenges, contests, incentives and rewards to employees for participation. Employees can easily adopt and maintain fitness goals using this app.
There’s no limit to incentives for your employees. You can shape and figure out an incentive program of high quality and fit your company's goals and employees best.
Apart from focusing on only the rewards, try to create an environment where hard work and success are recognized and rewarded regularly at the workplace.