Most organizations have traditionally thought that monetary or cash rewards guarantee the best results in driving employee engagement. However, the growing popularity of non-monetary awards in recent years is challenging that perception.
Non-monetary awards can be as simple as saying ‘Thank you’, felicitation in a team meeting, a sponsored training program, or even a special assignment.
One study by ResearchGate has also stated that non-monetary rewards ensure better motivation and long-term employee engagement as compared to monetary rewards.
As the name suggests, Non-Monetary Awards are those that do not offer a direct financial benefit to the employees.
They help enhance the sense of pride and satisfaction of employees for their performance and contribution to the organization.
These awards are symbolic and personal. Hence they have a deeper impact on the motivation of the employees and help strengthen their bond with their organization.
As these are not constrained by the budget, they can be more creative and frequent than financial awards.
Studies have shown that non-monetary rewards can be more motivating for employees. They help in improving productivity and employee engagement significantly.
Hence, many organizations are preferring these awards as a means of appreciating and rewarding their employees for their good work.
Let’s take a look at the possible reasons as to why Non-Monetary Awards work so well:
1. Perceived to be More Authentic
2. Helps Establish Personal Connection
3. Creates a Deeper Sense of Belonging
4. Less Likely to Create Discord between Co-Workers
5. Ensures Great Employee Experience
A non-monetary award such as a hand-written ‘Thank You’ note shows that the presenter has invested time and effort to reward the employee.
This in itself adds much more value and meaning to the award in the eyes of the recipients.
They feel that their organization truly cares about them as individuals. This contributes greatly to boosting their motivation and performance.
Unlike monetary awards, non-monetary such as ‘Coffee with the CEO’ create a personal connection between the organization and the employees.
This is because the organization considers employees’ needs and preferences while deciding on the award.
It is quite the opposite of giving away cash rewards, which tend to be more transactional and impersonal.
Non-monetary rewards such as special projects or assignments can create a deeper sense of belonging to the organization.
Employees generally view these rewards in light of the efforts made by the organization to ensure their happiness and satisfaction.
These non-monetary rewards tend to symbolize that they are integral to the organization and that their contribution is much valued.
Monetary rewards can often create unnecessary comparisons and unhealthy competition among employees.
However, non-monetary awards such as a training program or simply a day off/time off minimize such negative feelings among employees.
Non-monetary awards tend to be more inspiring for those who haven’t received the award.
Non-monetary awards create good memories of how they were presented, the social recognition received, or even the sense of pride of the recipient.
These positive feelings can keep the employees happy and motivated for long.
A big, well-organized award ceremony with the senior management, complete with selfies and video shoots can make the entire experience much more exciting and memorable for employees.
A virtual award ceremony can work as well if planned and managed properly.
There are several reasons why non-monetary rewards are becoming popular with organizations. They are perceived as more effective than traditional monetary awards or so-called cash awards.
Non-monetary rewards are likely to offer better results in terms of greater engagement, higher retention, and increased productivity.
Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn
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