What makes your employees retain: higher income or social rewards?
What should employers prioritize — financial or non-financial rewarding system?
Can they forgo non-monetary motivation and focus primarily on providing employees with the monetary one?
It is undeniable that amidst the current economic downturn and cost of living crisis, it has never been as pivotal as of now to provide people with financial support. Money has always been a basic necessity since its emergence but only in the situations of crisis do people feel the constant lack of it.
Non-financial motivation remains to be a crucial factor in employee retention
So, it is only reasonable for the employer to assume that financial incentive will be the thing that motivates employees to perform their duties as they all are in need for money. However, it is not that simple as it appears to be.
Whilst it is true that people are financially struggling – Monster reported that 96% of respondents of its survey were hunting for a new job because they are seeking higher compensation while the costs are rising and the inflation is mounting – the answer to the second question is no. No, the non-financial motivation remains to be a crucial factor in employee retention.
Gartner survey has shown that the current economic and political volatility had made people rethink what they want from life and how their social capital, time and effort is spent. What they want from their job is to be perceived as people – 82% of respondents say. Regardless, only 45% actually feel seen and appreciated.
Another research has proven that Generation Z specifically is no longer satisfied by monetary incentives solely, this generation is seeking understanding and appreciation. (Tarigan, Josua, et al., 2022) Moreover, the survey conducted by Bonusly in 2022 has demonstrated the following figures: 46% of the respondents left their job because of the lack of recognition and another 65% would work harder if they felt that their work would be noticed – if they would get this non-tangible incentive to perform even better.
What constitutes the notion of a non-financial incentive? It consists of job-related rewards (feeling of satisfaction, increased self-esteem etc. – any positive outcome inherent in the work) and social rewards which refer to recognition within an organization. These rewards ensure that employees feel valued and appreciated and hence improves employee engagement. (Madhani, 2021)
As can be clearly seen from the garnered evidence, employers cannot afford not paying attention to the non-financial incentives.
However, what should be prioritized? And should there be a choice at all if an employer wants to ensure employee retention?
The research tells us that employers can implement the so-called total rewards system to positively impact employees’ job satisfaction, productivity and wellbeing. (Tarigan, Josua, et al., 2022) What does the system imply? Total rewards system, or approach, or strategy, is a system of wages and bonuses as well as recognition, workplace flexibility and career opportunities, as defined by Gartner. In essence, it is a combination of financial and non-financial rewards that motivate employees to actively engage in their work and ensures their retention. It is a win-win deal for both – people who seek monetary compensation and who wants to be recognized as a human being for their work.
How we can connect financial & non-financial rewards?
We offer a new approach – a complex solution for the implementation of this system. It is our software platform AlbiCoins. We operate it with an internal corporate currency called coins that can be earned by any employee for different achievements and then spend in the benefits cafeteria. There they can choose an award for their accomplishments. What can be an award? Any benefit or compensation an HR or benefits manager desires. Moreover, AlbiCoins provides an opportunity for peer-to-peer recognition as well as manager recognition that allows employees to feel valued by the management and the colleagues at the same time.
- Jack Kelly Monster Survey: 96% Of Workers Are On The Job Hunt Forbes
- Jordan Turner Employees Seek Personal Value and Purpose at Work. Be Prepared to Deliver.
- Vanessa Kahn Survey Says: Appreciation Matters More Than You Think
- Tarigan, J., Cahya, J., Valentine, A., Hatane, S., & Jie, F. (2022). Total reward system, job satisfaction and employee productivity on company financial performance: evidence from Indonesian Generation Z workers. Journal of Asia Business Studies, 16(6), 1041-1065.
- Madhani, Dr. Pankaj. (2021). The Rewards Value Chain: Optimal Mix Of Tangible And Intangible Rewards For Enhancing Business Performance
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