by Joe Lopykinski
The Overture Group is an IMA Member
Compensation comes in all shapes and sizes. Two of the most common forms are base salary and annual bonus. These two, of course, come in the form of monetary or cash compensation. There are other forms of compensation, which one could argue are more important than these. I’m referring to non-monetary compensation. This type of payment has taken on a new level of importance, not only from an employee’s perspective, but progressive companies are using this form of pay to attract and retain key employees. Those who do not are at a competitive disadvantage. Let me explain.
Possible Forms of Non-Monetary Compensation
As previously stated, non-monetary compensation can take on many forms. By definition, it is any compensation given to an employee in a non-cash form. Some of the more common (and uncommon or creative) types of this pay include the following:
- Rewards – These can come in many forms and don’t need to cost much, such as a pair of tickets to see a movie or concert, gift certificates to a popular restaurant, or even gym membership discounts.
- Employee Recognition – Some companies have monthly or quarterly recognition celebrations. Other ideas like reserved parking spots, or a picture on the company’s “Hall of Fame,”also go a long way.
- Advancement Opportunity – The ability to work on more meaningful and challenging projects shows that your company believes in their employees’ abilities to reach new heights.
- Flexibility – Flexible working hours or occasional work from home options often accommodate the modern employee’s hectic schedule, mainly when both parents work or have other obligations outside of work.
- Work/Life Benefits – Try offering a day off “on the company,” which doesn’t go against the employee’s vacation bank — especially after completing a significantly labor-intensive project.Some companies offer free haircuts or massages at the office as well.
- Personal Development – Online or local offsite training classes paid by the company and monthly mentoring luncheons with senior management send the message that a company cares about its employees’ professional development.
Non-monetary incentives are increasingly more important than ever before and are a way for companies to show that they care about what’s important to their employees. A recent survey conducted by a well-known national HR consulting group found that when given a choice between a monetary or a non-monetary award, only twenty percent responded that they would choose the monetary award compared to the roughly sixty percent that chose other means of motivation and recognition.
It’s All About Value
Employees want to be valued and to have their companies know what is essential to them in the workplace. Better yet, they appreciate when their companies provide means to address those needs. Many employees have said that they would be willing to work harder if their company recognized their efforts in some manner. Simply put, employees want to be valued, and increasing one’s base pay or annual bonus often are not the ways that matter most to them. Often, even inexpensive non-monetary methods, as mentioned above, will do the trick if appropriately administered and if they have perceived value by those who receive them.
Companies of all sizes have recognized that non-monetary compensation can go a long way, and it doesn’t need to cost a lot to implement the right type of program. Google, for example, is widely recognized as a company that continuously sees its name near the top of the “Best Places to Work” list. Frequently being named on this list isn’t an accident. Google recognizes that culture drives everything, and if they take care of their people, their people will take care of everything else. Many of their recognition programs cost very little, but it’s the recognition and perception of being truly valued that have enabled them to succeed. With a reputation like this, it’s no wonder that this company rarely has an issue attracting and retaining top talent!
In conclusion, companies need to continue to recognize that there are many ways to compensate their employees appropriately. Whether it be through programs that promote professional development and employee challenges, like online courses and company mentorship programs, or fun perks like tickets to a ball game, these forms of compensation need to be relevant and have perceived value by those who receive them. Companies should make everyone aware, including those inside and outside the company, to ultimately create a culture which includes some form of non-compensation incentive program that will be the envy of those around them. What does your company offer?
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