Non-Financial Reward System

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Non-Financial Reward System

The modern-day employee is no longer simply motivated by their salary and, for this reason, organisations regularly attempt to incentivise workers with non-financial methods. This rapidly evolving trend was described by the Hay Group as ‘the primary vehicle in attracting and retaining talent” and a “key motivator and driver for employee engagement” and hence any organisation neglecting this motivation technique is failing to maximise their employee’s potential. 

The global financial crisis left organisations with an unpleasant dilemma; they had to cut costs, i.e. reduce salaries/lay off workers, but also demand more work from their employees, in order to survive in a challenging environment. This led managers to pursue non-financial rewards to motivate their employees in a cost-effective manner.

There are generally two types of non-financial reward used to motivate employees; incentives and recognition. Incentives are future performance targets that, when met, allow employees to receive rewards. These targets must be relevant and achievable and rewards include vouchers, time off work and activities. Recognition, on the other hand, is a retrospective task, whereby improved performance is rewarded by acknowledgement i.e. employee of the month. Both can be used effectively and the characteristics of your employees, budget and working environment will determine which is more important.

As a manager, you are responsible for effectively implementing these initiatives and communicating them through the organisation. These systems are now crucial in attracting, engaging and retaining your employees and any organisation not utilising these initiatives is putting themselves at a serious disadvantage. 

 

Hay Group. (2013) Reward Next Practices. Available at: http://www.haygroup.com/downloads/us/Reward%20next%20practices.pdf (29 April 2013).