We all are very familiar with the importance of motivation at work-place for employees. For motivating the employees, almost all the organizations grapple with the kind of rewards to be offered. The rewards are basically categorized into two types: Monetary and Non-Monitory. Various studies have been done to figure out which type of rewards are more motivating but none of them was able to conclude whether monetary rewards are better or non-monetary.
With this article, let us explain the difference between the two:
- Monetary Rewards: These are the incentives that involve direct money to the employees like gift cards, bonus, profit sharing etc.
- Non-Monetary Rewards: These are the incentives that do not involve direct money for the employees like appreciation, insurance, recognition, a free trip, job security etc.
Now, let’s understand all the importance of both types of rewards:
- Purpose of Monetary reward is to increase employee motivation, engagement, satisfaction & output.
- Purpose of Non-monetary rewards too is the same as monetary rewards. It too wants employee satisfaction & engagement.
- Main recipients of monetary rewards are the employees who excel in their field or who perform extremely well.
- Non-Monetary rewards are given to the stellar employees to whom the companies want to retain forever hence, offer them convenience and security.
- Monetary incentives are considered as an expense for the company as it involves money to be rewarded to the employee
- Non-Monetary incentives too are an expense to a company as they involve a well-thought gift to the employee and sometimes a choice to be made the employee itself among various options. But this is beneficial for a company for retaining the stellar employees for a longer period.
- Employees get highly motivated by any kind of rewards & recognition but many studies have proved that this type of reward works well for the employees who only want cash or any kind of bonus. On the other hand, this type of reward can sometimes have a negative impact too as the employee getting rewarded may start focusing on how to get the work done timely & excel leaving the morality far behind.
- Non-monetary incentives always have a positive impact on the employee receiving it as well as on the team. This type of reward makes the employee feel valued and emotionally attached to the company. The employees don’t get attracted to money and hence work with full motivation never leaving morality behind.
We hope you have got a fair amount of idea what kinds of rewards are beneficial for your company for having a ratio of employee satisfaction among the employees. And if you still are confused on how to incorporate an effective reward culture in your company, feel free to contact us. We provide best solutions to the companies on incentivizing their employees.