Rewarding employees is an integral part of HR practice because it motivates them to work hard and stay loyal to the organization. Knowing that their efforts are being appreciated, individuals are motivated to perform better. And, there are many types of compensation that an organization can adopt to motivate their employees.
Recent research shows that employees who receive frequent recognition and praise are more productive. They are engaged with co-workers, stay longer in the organization, and receive higher customer satisfaction. Although money in the form of a bonus or raise is the primary way to reward employees, it is not the only way.
According to studies, motivation from money is temporary and instead depends on factors outside of finance. Research shows that non-monetary modes of compensation can have a stronger and positive influence on performance. Below are ten non-monetary types of compensation for your employees.
1) SAY IT IN WORDS
Be generous with compliments; as a result, people will likely work towards getting more of such compliments. Always be ready to praise your employees on their work and show gratitude towards their efforts.
A simple 'good job' or 'we are lucky to have you,' for instance, can, at times, be the gold star for your employees. Especially when done in public. Speak highly of your employees in front of their colleagues. In other words, praise them whenever you can. When you let your employees know that you are proud of their work, they tend to feel motivated.
Knowing that their hard work is being noted and singled out by their superiors, drives them to work better. This is the easiest but one of the most effective types of compensation for your employees.
2) FORMAL RECOGNITION
Schemes and events which formally recognize an employee's achievements are a great way to boost employee morale. And, why is this recognition important?
Individuals value rewards that can advance their career goals. Send high achievers a letter or an official document formally recognizing their contribution to the organization and the value that their work has added to the company.
The most common among types of compensation is an 'Employee of the Month' program, which is often used in retail and sales to encourage workers. It rewards one leading staff member who has delivered the highest performance of the month. The member is rewarded with the 'Employee of the Month' title to commemorate their excellent work.
It is essential to understand that the employees are important assets in the organization.
3) GIVE THEM A BREAK AS TYPES OF COMPENSATION
Employees who perform the highest are usually the ones who put in the most hours and energy into their job. If they have achieved well above the quota, then reward them with a bonus day (or days) off or shorter work hours.
It can be demotivating to work hard on a project and be back on the desk right after completing it as if nothing has happened. It is indeed necessary to let them breathe, so they come back with new energy.
This also shows that you are giving a very supportive environment for your employees to work. A place where the personal life of an employee is also of higher value. Let them take some time off to reflect on their excellent work, and they will be back to work with new zeal.
4) TAKE THEM ON A TRIP
Money once put into your wallet can disappear without you realizing it. Your employees will be happy when they get the money, but it won't create any lasting memories past 'I got a bonus for the most sales this year'.
Take your employee(s) on a journey as a trip creates endless memories for them. It will create lasting memories and positive energy at the office. Research shows that people are more satisfied with experiences than material things in the long run. They would want to stick to a company that they share a special bond with.
Offer air tickets to the nearest city, or concert tickets to a music festival. Your employees will be motivated, loyal, and eternally grateful for the experience, making this one of the most durable types of compensation.
5) HOST A DINNER
Arrange for an annual or quarterly dinner for the leading performers in the office. A night out at a fancy restaurant will let them taste the fruit of their labor.
The employees will appreciate a chance to get to know their superiors outside of the office and allow them to get more comfortable in each other's company.
You can also use dinner as an excuse to gather feedback from your employees. The same, one could use for discussing future ideas for the company. Ambitious people like to be challenged and exposed to new ideas. Give them a chance to voice and address their concerns and opinions.
6) OFFER SMALL BENEFITS AS TYPES OF COMPENSATION
Sometimes it's not the grand gestures that motivate employees but the small benefits which could make their job easier.
Offer them an exclusive parking spot, flexible hours, longer lunch breaks, or a LinkedIn recommendation. These little things can push an employee into working harder at their job and advancing the company's goals; at the same time, they develop their own.
Among many types of compensation, this one is gaining ascendancy over the last few years owing to the boom in online hiring.
7) ALLOW THEM TO LEAD
Although experts and business owners might shiver at this fearful suggestion, every once in a while, you need to stop being a boss and let a leader emerge from among your employees.
If you let them have a chance to feel valued when they need it the most, they will work harder to advance the company's goals. If they know they are an essential part of your organization or that their work is indeed being looked upon, they will feel the constant need to maintain the status quo.
Let them know that you trust their leadership and are willing to work alongside them for a change. At first, it might seem like a gamble, but this inspired mutual respect between you and your employees. And, this way your employees are sure to work harder to lead well whenever you give them a chance.
8) NEW CHALLENGES IMPLIES TRUST AND REWARD
As an employer, the one thing that you do want your employees to know is that you trust them. The best way to show trust in somebody is to be confident enough to give them challenges that aren't regular everyday tasks.
Either in the way of leadership opportunities or new projects that are a bit tricky, if you are willing enough to trust your excellent employees, they'll, more often than not, try their very best.
The risk you'll take with such types of compensation will surely have rewards with the effort of your employees.
9) TANGIBLE REWARDS AS TYPES OF COMPENSATION
There is little doubt about the fact that your words of praise matter but they feel a little less impactful if you compare it to Coffee Mugs or badges.
Yes, giving away real prizes for the excellent work of your employees not only reminds them and their colleagues of their prowess, but it makes them want to win it again. You don't always have to have the regular "employee of the month" award. You can make it exciting and even more inspiring.
Reward your best employees whenever they deserve it to boost their interest and give them the much-needed rejuvenation. These rewards not only promote good work, but it also helps you connect with your employees at the human level.
10) SUPPORT TO THEIR CAREER
It is tempting for employers to think of their employees as investments. Yet, the key to getting the best out of your employees is to be supportive of their careers.
Your employees would want to work with someone ready to give them the scope of improvement and learning.
By holding workshops or training and development drives that focus on the skill sets of your employees, you will make them feel like you put your trust in them. This, in turn, would mean that they'll pour their heart out at work till the time they'll work for you. After all, that's the purpose of all the different types of compensation.