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09. Balancing financial/ non financial rewards

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The debate between financial and non-financial rewards for recognizing and rewarding contributions in the workplace is indeed a longstanding one. Both forms of recognition have their merits, and a balanced approach often proves to be the most effective. Here are some insights into both financial and non-financial rewards.



8.1 Financial Rewards

Financial rewards refer to the monetary benefits or compensation that individuals receive in exchange for their work, services, or achievements. These rewards can take various forms, depending on the context and the nature of the contribution.

8.1.1 Tangible appreciation

Direct financial rewards such as Bonuses and salary increment are tangible and immediately impactful. They demonstrate a clear acknowledgment of an employee's efforts.

Providing specific gifts or vouchers can personalize the reward, making it more meaningful.

8.1.2 Motivation through compensation

Tying financial rewards to performance metrics can motivate employees to excel in their roles.

Incentivizing employees with a share in company profits fosters a sense of ownership and teamwork.

8.1.3 Retention through recruitment

Offering competitive salaries and benefits helps attract and retain top talent and providing employees with a stake in the company's success can align their interests with long-term organizational goals.

 

8.2 Non-Financial Rewards

Non-financial rewards refer to the non-monetary incentives or recognition that individuals receive for their contributions, efforts, or achievements in the workplace. These rewards are essential for employee satisfaction, motivation, and overall well-being

8.2.1 Intrinsic Motivation 

A simple "thank you" or public acknowledgment can go a long way in boosting morale and job satisfaction and creating a culture where colleagues appreciate each other fosters a positive work environment.

8.2.2 Professional Development

Offering learning and development opportunities signals that the organization is invested in its employees' growth. and providing a clear path for career progression can motivate employees to invest in their roles.

8.2.3 Work Life Balance

Non-financial benefits like flexible schedules or remote work options can enhance work-life balance and promoting employee well-being through wellness initiatives contributes to a healthier and more engaged workforce.

8.2.4 Social Recognition

Recognizing outstanding contributions publicly encourages a positive competitive spirit and acknowledging achievements on company social media platforms can boost employee morale and brand image.

 


 

Types of Rewards categorized as


 

 

Financial Rewards

 

 

Non-Financial Rewards

 

Basic Salary

Recognition and Praise

 

Commissions

Employee of the Month/Quarter Awards

 

Bonuses

Flexible Work Arrangements

 

Allowances

Professional Development Opportunities

 

Profit-Sharing

Career Advancement

 

Employee share Ownership

Employee Wellness Programs

 

Flexible Benefits Packages

Workplace Flexibility

 

 

Team Building Activities

 

 

Meaningful Work Assignments




(Source- workproud.com)









A Balanced Approach to achieve  Total Rewards

Consists

 

Individual Preferences

Different individuals may be motivated by different things. A personalized approach to recognition, combining financial and non-financial elements, can be most effective.

 

 

Timing and Frequency

Regular, timely recognition ensures that employees feel valued consistently, whether through financial incentives or non-monetary gestures.

 

 

Communication

Clearly communicating the criteria for recognition, whether financial or non-financial, helps employees understand what is expected and appreciated.

 

In summary, a well-rounded recognition strategy that combines financial rewards with non-financial gestures can create a positive and motivating workplace culture. The key is to be aware of the diverse needs and preferences of the team and tailor recognition efforts accordingly.

 










References


  • Howes, T. Financial & Non-Financial Benefits. Benefits Realisation Management Best Practices. Available at:https://www.linkedin.com/pulse/area-10-financial-non-financial-benefits-realisation-management (Accessed: 17 November 2023).
  • Kumar, N (2009) Reward Management. Available at: https://www.slideshare.net/nileshkumar/reward-RewardManagement|PPT (Accessed: 17 November 2023).
  • What is non financial benefit?. Available at https://angolatransparency.blog/en/what-is-non-financial-benefit/ (angolatransparency.blog 0029(Accessed: 16 November 2023).
  • Why employees need financial and non-financial rewards. Available at: https://reba.global/resource/why-employees-need-financial-and-non-financial-rewards.html(Accessed: 16 November 2023).
  • Doyle, J (2021) 8 Financial and non Financial Rewards for Employees for Leaving Cert Business.  Available at: https://www.youtube.com/watch?v=KhIBEhGjScU  (Accessed: 16 November 2023).
  • (2018) Should You Revise Your Company’s Bonus Strategy. Available at https://workproud.com/should-you-revise-your-companys-bonus-strategy/ (Accessed: 16 November 2023).




Comments

  1. Dammika SudeshNovember 26, 2023 at 8:24 AM

    Balancing financial and non-financial rewards in the workplace creates a dynamic framework where monetary acknowledgment fuels immediate motivation, while non-monetary gestures foster long-term satisfaction, nurturing a harmonious, motivated, and engaged workforce.

    ReplyDelete
  2. Channa MedewelaNovember 30, 2023 at 4:26 PM

    Balanced approach recognizes the importance of financial compensation while acknowledging that a fulfilling work environment, opportunities for professional growth, and a positive organizational culture also significantly contribute to employee satisfaction and performance.

    ReplyDelete

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