Employees are the backbone of any company — a statement that rings particularly true during a time of uncertainty for the economy amid the COVID-19 pandemic. This very fact has seen an increased reliance on human capital management (HCM), which is basically a practice that places an importance upon facets like employee mental health, values & beliefs, and work ethic within an organisation.
This employee-focused approach to HR also includes incentives that are offered to team members in a company, often as motivation tools for high performance. In fact, incentives can also make employees feel valued, help with engagement, and be the catalyst for positive relationships with employers and the company as a whole. Plus, benefits can also help to retain high-performing employees, and reduce turnover for valuable staff members.
But you probably already know that. The question is: Are monetary incentives better than non-monetary benefits?
“Cash is King”, right? Well, not entirely. In a study conducted by the Incentive Research Federation for the Incentive Marketing Association, 66 percent of respondents said that they would prefer a “personally meaningful non-cash reward”, while 80 percent would opt for travel and experience incentives over monetary rewards.
A big part of that boils down to designing a personalised reward experience for employees, which can have a significant impact on motivation in the workplace. As such, the trend for companies appears to be moving towards non-cash incentives, with employers now exploring non-monetary incentives to motivate employees. This makes quite a lot of sense — a well-designed incentive programme can increase performance by up to 44 percent, according to this report.
But of course, this doesn’t negate the value of a cash reward. When we shared a simple poll on Facebook, the vast majority of Malaysian-based respondents opted for monetary incentives. Let’s take a quick look at some of the pros and cons to consider.
The obvious answer is that monetary incentives will always be required in some form — it’s just the way the world works. Incentives like annual raises and bonuses, along with commissions, are one of the most commonly-discussed topics among employees for good reason, and offering healthy financial rewards certainly help to attract (and retain) the best performing employees.
On the flip side, more money isn’t a guarantee of loyalty. Yes, monetary incentives are necessary to keep employees, but studies suggest that money isn’t the biggest factor when it comes to selecting potential employers — particularly when it comes to millennials. And if you’re facing cultural issues on the ground, monetary benefits are certainly not the answer here.
Oh, and the obvious: Financial reward schemes can have a serious impact on your company’s budget.
Now, consider incentives that don’t take the form of cash per se. Examples such as flexible working hours, recognition programmes, and even more paid time off can help ensure that employees continue to feel valued, while educational benefits such as e-learning courses and upskill training sessions hold plenty of value as well.
Fringe benefits can also be implemented at relatively affordable cost, with examples such as wellness programmes, or even subsidised fitness initiatives proving to be an inexpensive way to reward employees. We’ve also seen how non-monetary rewards can be particularly attractive to younger employees — including fresh graduates — so if you’re looking to scale your workforce, keep this in mind.
Something else to consider is the intangible, emotional value of an invested and engaged employee. Awards, or even peer recognition programmes, can provide emotional value in the form of non-monetary benefits, which can be beneficial in the long term when it comes to building the ideal work culture for your company.
Other examples of non-monetary incentives that you can offer your employees (at relatively low cost to your annual budget) include mentorship opportunities, gamification and rewards, as well as opportunities for travel and experiences. We’ve even seen pet-friendly workplaces in Malaysia, which are hugely popular for paw-rents (although this can be a difficult practice to maintain in larger companies).
The gist of it is this: monetary rewards and non-monetary rewards are both crucial in ensuring that your company’s employees stay motivated, engaged, and fulfilled. Tailor non-monetary benefits in a way that best suit the size and workforce of your company, and couple that with healthy financial perks that will always be an important part of keeping your employees happy.
But in light of the ongoing pandemic, keeping employees engaged and invested can be a challenge, even for the best of us. The key to surviving the unique, mostly remote working environment in 2021? Digitalisation.
Sign up for altHR, the all-in-one digital solution that covers everything from payroll and onboarding, to staff management and providing employees with information kits. You’ve done it the old way long enough.
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