beyond salary – an introduction to cost-effective incentives and non-monetary rewards.

Every action to enhance employee morale makes a difference in the ongoing pursuit of attracting and retaining top talent. One key strategy is offering a robust employee incentive program packed with non-monetary rewards, especially when financial incentives may not always be an option or the most effective approach.

This article explains the concept of non-monetary compensation. It provides an overview of specific incentives, benefits, and perks to help you build a robust and cost-effective employee appreciation program.

non-monetary rewards defined

Non-monetary rewards are perks offered to employees without involving cash compensation. They are designed to motivate, recognize, and improve job satisfaction without relying on cash bonuses or pay raises. Monetary rewards, on the other hand, include incentives such as pay raises, cash bonuses, profit sharing, and gift cards.

Our Workmonitor survey reveals that younger workers prioritize more than just salary when considering job opportunities. Factors like work-life balance, flexibility, and skill development are increasingly important, allowing employers to strengthen their employee offerings without straining the budget.

examples of non-monetary benefits

As the demand for non-monetary incentives continues to rise, it's clear that these rewards are becoming increasingly diverse. For example, the standard offering of a yearly gym membership, once the staple of health and wellness benefits, has been expanded to include yoga classes, stretch breaks, meditation sessions, and more. While some non-monetary rewards are common and easily recognizable, others are less well-known. 

To simplify, we have grouped these rewards into seven main categories:

Common non-monetary rewards within these categories include remote and hybrid work, mentorship programs, opportunities for career advancement, office yoga, mental health days, free computer glasses, sabbatical leave, monthly team lunches, employee-of-the-month recognition, and birthday celebrations. These incentives motivate without direct financial compensation, offering companies budget-friendly ways to enhance employee morale.

In fact, work-life balance, which falls into the "flexible work arrangements" category, now ranks as highly as pay on workers' lists of priorities.

advantages of non-monetary incentive programs

The most apparent advantage of offering non-monetary incentives is the low or even zero cost for employers. As the name implies, these benefits involve little financial investment. With employees increasingly valuing wellbeing, mindfulness, professional development, and flexible hours, non-monetary incentives are both cost-efficient and effective in driving motivation and productivity.

Key advantages include:

a more attractive workplace 

As mentioned above, work-life balance has become a top priority for modern employees, often surpassing financial compensation in importance. This is a good thing since it provides an excellent opportunity for employers looking to create an appealing workplace that attracts and retains top talent. By promoting work-life balance through flexible options such as remote and hybrid work arrangements, companies can help employees better manage their schedules, reduce stress, and prevent burnout—ultimately benefiting both the organization and its workforce.

reduced employee turnover rates

Another distinct advantage of a robust employee benefits program is increased employee satisfaction. Undoubtedly, a more content workforce leads to stronger loyalty and reduced turnover rates, which, in turn, can significantly lower recruitment costs and contribute to long-term organizational success.

healthier and more motivated employees

According to our latest Workmonitor report, 83% of respondents consider mental health support and annual leave days key factors in their job decisions, offering employers a great opportunity to enhance their benefits package. Incorporating mental health initiatives into the employee incentive program can contribute to a healthier, more motivated, and more productive workforce.

enhanced productivity

A Gallup study highlights that employee recognition may be one of the most underutilized strategies for improving workplace morale. Despite being cost-effective and relatively easy to implement, individual recognition can yield significant benefits, including enhanced loyalty, productivity, and retention. Unsurprisingly, a positive work environment cultivates a healthier, more innovative, and more productive team.

key takeaways

• non-monetary rewards offer a budget-friendly way to boost employee morale and engagement
• work-life balance is a top priority
• diverse incentives meet evolving employee priorities
• a robust employee benefits program can help reduce turnover and enhance productivity

If you want to revamp your non-monetary incentives to attract and keep top talent, download our guide for additional insights.