There has always been a raging debate on the efficacy of monetary versus non- monetary rewards for an employee referral program as key enablers for employees. While some people prefer to be rewarded with hard cash for a job well done, non-monetary rewards can take several forms such as:
The primary advantage of Monetary rewards center around the fact that they are:
A)Easy to understand and B)Their Universality ensures that they appeal to employees across designation levels
On the other hand, ofcourse there is adefinite flip side associated with monetary rewards:
A)Over a sustained period of time, they start to lose value as employee interest dithers. They are sometimes taken for granted while at others there is the constant need of increasing the monetary value to keep employees engaged.
B)If they come as a part of the employee salary, they often go towards regular expenses, diminishing their importance.
As opposed to monetary rewards, non-monetary rewards have the advantages of keeping employees engaged & motivated through public recognition. They also have the advantage of immediacy, where employees can be rewarded immediately following their achievements.
Just while one begins to think that non-monetary rewards are a panacea for all ills, a study conducted by at Wichita State University revealed that when given a choice between cash or Non Monetary Rewards 63% of the people would pick cash. However, when asked what would satisfy them, cash or a non-monetary reward, a majority said they would prefer non-monetary rewards. When faced with a real life situation, the utility of the cash, therefore, leads many to make a more practical though less satisfying decision.
Non Monetary rewards have their own sets of disadvantages, primary among them being:
A)Offering non monetary rewards that do not interest employees can instead of motivating employees, convey an impression that the organization does not know their employee interests & worse still, does not care about them.
B)Problems may also occur if the perceived value of the non-monetary incentive falls below the employee expectations.
There is, therefore,no one-size-fits-all solution when it comes to motivating employees. The choice of monetary versus non-monetary solutions depends upon a range of factors, including but not limited to industry practices & business goals. Very often, one cannot work in the absence of the other. A judicious mix is perhaps the only answer.
Author Bio :
Savio Vadakkan is the Marketing Professional at ZALP, a unique employee referrals booster. ZALP helps organizations tap the full potential of their employee referral program using advanced social media integration and interesting features like gamification.