Pay rises, bonuses, and commission are known to be effective motivators for employees, but businesses shouldn’t disregard non-financial incentives as well. Non-financial rewards for employees can take many different forms, and they’re often the factors that keep people feeling engaged, motivated and productive over the long term.
In this guide, we explore why non-financial methods of motivation are so important, their benefits, and the best types of non-financial rewards to introduce to keep your staff feeling valued.
Non-financial incentives are a type of employee reward that doesn’t carry any monetary value. Instead, these perks help to make staff feel recognised and listened to, supporting motivation, morale, and retention.
Non-financial rewards for employees can take many different forms, from additional time off to team bonding opportunities, or support with career progression. They complement pay and bonuses to help people feel valued, and when implemented successfully, the effects of non-financial incentives can be felt every day, contributing to overall workplace culture.
Non-financial incentives are important for showing employees that they’re valued, and that you recognise their contribution. They’re a cost-effective way to reward people, and can deliver benefits for both employees and employers. Non-financial rewards help to keep staff feeling motivated and engaged, benefiting productivity and workplace morale as a result.
Bruno Pinheiro, Business Development Manager at Talos360, explains: “While an initial salary offer or pay rise motivates employees in the short term, it’s often the non-financial incentives that keep people feeling engaged in their role day-to-day over the long term.”
Rewards that don’t carry monetary value can help to support people’s wellbeing, reduce the risk of staff burnout, provide professional development opportunities, and create loyal employees, to cite just a few of the benefits.
From extra time off to career progression opportunities, discover some of the most popular non-financial ways to motivate employees:
Offering extra days of annual leave is one of the most popular non-financial methods of motivation for employees. For example, many businesses allow staff to take their birthday off on top of their annual holiday allowance, while some offer the option to book additional days off for Christmas shopping or for a house move.
If your business can’t justify giving people extra time off, another option is to let people finish a few hours early on a Friday afternoon. This is a non-financial incentive that’s straightforward for employers to implement and manage, and it can keep people feeling motivated during busier periods, while directly benefiting their work-life balance.
Salary sacrifice schemes are another effective reward for employees; while they require staff to sacrifice part of their pre-tax salary in return for a specific benefit, they can be cost-effective for businesses to implement.
A salary sacrifice scheme could be used to provide people with access to:
With this type of workplace benefit, employees get access to a perk without directly increasing your company’s overall salary costs.
Next on our list of non-financial ways to motivate employees are one-to-one conversations. These provide HR and management with an opportunity to deliver tailored coaching, provide wellbeing support, and identify where further support or motivation may be required.
During these sessions, managers can spot opportunities to offer career development support and help people reach their potential. This type of mentoring and coaching is invaluable, but costs organisations very little to implement.
Providing people with the opportunity to work flexibly and remotely is another of the most popular non-financial rewards for employees. Trusting staff to work on a remote or hybrid basis can support them to be more productive in an environment that suits them, and fit their work around other commitments.
Allowing people to adjust their start times, compress their hours, or work from home several days a week eliminates commuting or childcare stress, and gives them more control over how, when and where they work. This helps staff to feel valued and trusted, subsequently boosting their motivation and morale.
Managers shouldn’t underestimate the impact of giving people autonomy, independence and trust in their roles. This can increase confidence and overall job satisfaction, keeping people engaged and motivated.
This is one of the few non-financial incentives that costs companies absolutely nothing to implement; instead, businesses need to foster a culture of trust and personal accountability. Through open communication, organisations can encourage everyone to work towards a common goal, without micro-management, creating a more positive, empowering culture.
Openly sharing praise across teams, the wider company, and on social media is an effective, non-financial way to show employees that their contribution is valued. Sharing feedback publicly can boost individuals’ professional profiles and position them as thought leaders. Meanwhile, internal, non-financial incentives, such as employee of the month/quarter awards, promote a culture of feedback and recognition.
Gather this feedback continuously via a performance management platform like Talos Perform or through 360 feedback gathering to get an objective, rounded view of people’s contribution to your company.
Provide employees with opportunities to further their careers by allowing them to access training, take part in workshops, or attend industry conferences. While there may be a financial cost to your business, the returns can benefit your business in the long run, as employees upskill and help your organisation prepare for the future.
Invest in your future leaders, and they’ll naturally pass on knowledge to more team members and feel they can grow and develop with your firm, benefiting retention in the long term.
Team building activities, such as socials or opportunities to volunteer and give back, are always popular non-financial rewards for employees. Team building events create stronger bonds between colleagues and provide them with problem-solving and communication skills they can bring back to the workplace.
What’s more, these activities help to drive a more collaborative culture built on strong interpersonal relationships, creating a more welcoming, positive work environment.
It costs nothing to give people a voice. Ask your people for their opinions and feedback on what’s working and what they’d like to see from their place of work, and show them that their voices are being listened to. Act on feedback, seek further detail, or communicate why a particular suggestion can’t be implemented to create a culture of transparency.
Showing people that their contributions are respected and valued is one of the most effective non-financial ways to motivate employees and foster loyalty as an employer.
Non-financial rewards can deliver many benefits for employees, including:
Non-financial rewards can also deliver tangible benefits for employers, from lower churn to enhanced engagement.
Here’s how to successfully implement non-financial rewards for employees to ensure they remain cost-effective:
The first step to introducing non-financial incentives is to carry out an employee survey to find out what type of rewards your people would value most. Use anonymous surveys to gather feedback, or ask people directly during 121s to find out what they’d like to see from your company.
Recognition and praise cost nothing, making this one of the most cost-effective non-financial ways to motivate employees. Building a continuous feedback loop enables real-time feedback gathering, and positive comments should be shared publicly to show people they’re valued.
Where possible, align non-financial rewards with employees’ personal development plans to support them to progress in their careers. For example, allow people to attend industry conferences or access training they’ve expressed an interest in to help them feel valued, and gain new knowledge and skills they can bring to their role. This will benefit your business, as well as their individual professional development.
Positioning HR and line managers as coaches and mentors means they’re trained to recognise when people need extra support to feel fulfilled and valued in their roles, and to identify opportunities to offer non-financial incentives. This can help people to feel better supported in their work, with non-financial rewards tailored to their individual needs.
Clear, open communication is essential to make sure employees are aware of the types of non-financial rewards on offer at your company, and whether there are any prerequisites to receiving these. This ensures fairness and transparency, and can help to drive people to achieve criteria-based rewards.
After non-financial rewards have been rolled out to employees, it’s important to monitor their impact, gather feedback, and implement changes to make sure the incentives you offer are actually wanted and relevant to your people.
Financial incentives are workplace benefits that have a monetary value, such as bonuses, commission, or pension contributions, which carry a cost for employers. In contrast, non-financial incentives are rewards that aren’t finance-based, but instead benefit people’s morale and motivation at work. These typically have a low financial cost for employers, making them a cost-effective strategy for supporting employee engagement.
Non-financial incentives can be a type of employee benefit, but they shouldn’t be the only reward staff receive. Traditional workplace benefits tend to be contractual, whereas non-financial rewards are more performance-driven. Employee benefits may be what attract people to work at your company in the first place, but it’s the non-financial rewards that keep employees engaged and motivated over the long term.
Every member of staff will value different types of non-financial incentives, so it can be useful to survey your employees to find out what kind of rewards they’d value most. Typically, employees value rewards that make their lives easier ,– such as flexible or remote working ,– or that benefit their future careers, such as clear progression pathways.
The right type of non-financial incentives for your business will depend on what your employees value most. It’s important to gather feedback and listen to what your people would like in order to provide the rewards they want to see. Once incentives are rolled out, continue to evaluate their success and seek feedback to make sure they continue to serve your workforce.
Talos Perform performance management software enables HR and management to gather continuous feedback, track one-to-one conversations, and share praise on both an individual and public basis to show people that they’re valued. Managers can also work with employees to build custom PDPs within the platform to support tailored, long-term career progression.
Measure and track the impact of non-financial rewards for employees with Talos Perform. Book a demo today.
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“With nearly a decade of experience in the people software space, Tim is the resident host of Talos360’s thought leadership webinars, workshops, and roundtables. Helping organisations improve and streamline their internal recruitment processes through ATS technology and best practice techniques, Tim is the go-to voice on all things HR.”
