Top 10 Monetary and Non-Monetary Benefits to Offer Employees

  • postauthorOnsurity Editorial
  • postdateOctober 30, 2024
  • postreadtime9 min read
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Employee Benefits

At the cost of sounding dramatic – if you aren’t taking good care of your employees, someone else will.

Offering attractive compensation can be a differentiating factor for attracting and retaining talent. As such, employers must provide a comprehensive set of monetary and non-monetary benefits for a rich and holistic employee experience.

While monetary benefits contribute to your employees’ financial well-being, non-monetary benefits enhance job satisfaction and employee engagement. Each plays a crucial role in earning your employees’ favour.

On that note, let’s dive into how you can craft a well-rounded employee package.

Also read: Employer Employee Insurance

What are Monetary Benefits?

Monetary benefits are direct financial rewards employees receive as part of their compensation package. These include salary, cash rewards, bonuses, commissions, and other cash-based incentives that promote employees’ financial growth and link their performance to organisational goals.

Offering monetary benefits is pretty straightforward. You’re compensating your employees for their efforts. Since money is one of the leading motivators, your employees will feel rewarded and appreciated.

What are Non-Monetary Benefits?

As the name indicates, non-monetary benefits are perks and incentives that enhance the employees’ experience without directly increasing the company’s cost. Examples include professional development opportunities, flexible work arrangements, recognition programs, etc.

Non-monetary benefits are tied to the goal of increasing job satisfaction, creating a positive work culture, building trust, and promoting employee well-being.

top monetary benefits for employees

Top 10 Types of Monetary Benefits for Employees

We’re looking beyond base salary when considering monetary benefits. Here’s our list of top 10 monetary incentives:

1. Performance-based Pay

Performance-based pay is additional compensation given to employees based on their work performance. It is typically linked to their OKRs, deliverables, or other performance metrics. Performance-based pay couples the employee’s achievements with company goals to drive productivity and motivate employees to bring their A-game.

2. Employee Group Health Insurance

Employee group health insurance is an understated monetary benefit. It lends a sense of security and offers financial protection to employees and their dependents in case of sickness or medical emergencies.

Options like Onsurity’s flexible group health insurance plans allow businesses to offer cost-effective coverage while allowing employees to receive healthcare support minus the out-of-pocket expenses.

3. Sales Commission

A sales commission is a form of monetary reward given to employees, typically sales agents and representatives, based on their performance.

It ties earnings to performance, which encourages employees not just to achieve their sales quotas but surpass these targets and maximise revenue. Such monetary rewards are common in industries like retail, real estate, and insurance and serve as an ongoing incentive to close more deals.

4. Employee Stock Options

Employee Stock Options (ESO) permit employees to purchase company shares at a discounted price. By offering employees a stake in the business, you effectively align the employees’ financial interests with organisational growth.

The sense of ownership, no matter how minuscule, motivates them to work towards company goals, which in turn sets the foundation for the company’s long-term growth.

5. Overtime Pay

Overtime pay is compensation offered to employees for working beyond their standard hours. Prevailing labour laws typically mandate these monetary rewards. In India, employees working beyond 48 hours a week are entitled to overtime pay under the Factories Act 1948.

The corresponding overtime pay is twice their regular wages. This ensures legal compliance and fairly compensates the employees for the additional time and effort they’ve dedicated to your company.

Also read: 4 Reasons To Provide Part Time Employee Benefits

6. Retirement Plan

Employers often contribute to retirement plans such as EPFO (Employees’ Provident Fund Organisation), NPS (National Pension System), etc. These contributions carry tax advantages and accrue over the years, cementing the employees’ financial security once they retire.

This long-term saving and financial security monetary benefit is rather attractive to employees as it safeguards their future.

7. Allowances

Allowances are supplementary financial perks and benefits to cover specific expenses. You have allowances for housing, transportation, meals, etc., to reduce the employees’ overall cost of living. Some employers may also offer allowances for children’s education, higher education, vacations, etc., to enhance job satisfaction.

8. Gift Cards or Vouchers

Gift cards and vouchers are monetary rewards given to employees. These can be tied to routine events like birthdays, festivals, work anniversaries, etc., or linked to sporadic events like goal attainment, project completion, organisational milestones, and more.

Even though they aren’t an active component of monetary incentives, they go a long way in making employees feel appreciated and rewarding them with an occasional financial treat.

9. Annual Increment

Annual increment is the yearly salary hike given to employees after their work appraisal. It acknowledges their continued contribution to the company and acts as a magnet for retaining talent.

The steady financial progression, based on performance or tenure, is also an assurance of continued financial security designed to incentivise long-term commitment to the organisation.

10. Gain/Profit Sharing

Gain or profit-sharing programs distribute a portion of the company’s profits among its employees. This is often in the form of a bonus or retirement contribution. Since these monetary incentives link employees’ interests to organisational success, they’ll be more driven to contribute to its success.

Also read: Why are Employee Welfare Programs Important Especially in India?

top non monetary benefits for employees

Top 10 Types of Non-Monetary Benefits for Employees

Now that you understand the different types of monetary benefits, let’s move on to non-monetary incentives that you can offer to your employees:

1. Flexible Work

Flexible work arrangements allow employees to work on their own terms. For example, they may choose their working hours outside of the traditional 9-to-5 schedule. Similarly, some may select specific days of the week when they can work remotely.

The impact of non-monetary rewards on employee performance is significant. They accommodate personal obligations and allow employees to manage their work-life balance. They also reduce stress, promote autonomous working, and increase job satisfaction. After all, employees get the flexibility and freedom to work when they’re most effective.

2. Employee Wellness Programs

Caring for your employee’s health and well-being is an essential non-monetary benefit that impacts engagement and loyalty.

Rolling out something like Onsurity’s Wellness Program allows companies to extend a bouquet of benefits, such as fitness tracking, teleconsultations, and preventive health measures, to support and reward employees who take care of their overall health and well-being.

The resulting healthier work environment also drives productivity and morale while reducing absenteeism. A win-win situation for all!

3. Extra Paid Leave

Extra paid leaves are additional days off beyond the standard vacation, holiday, or sick leave. They may include parental leave, pink leave, mental health days, or even sabbaticals.

Offering a generous and employee-centric leave policy enables employees to rest and recharge, combating burnout and fueling productivity. It also displays the organisation’s commitment to supporting the personal lives of its workforce.

4. Choice of Assignment

Allowing employees to choose their assignments or projects helps them play to their strengths. It also keeps things fresh and interesting for them, as they can choose to work according to their availability, skillset, and appetite for challenge.

Further, working on something that they’re passionate about increases engagement, creativity, and productivity. Such non-monetary benefits push them to align their individualistic skills and interests with company goals.

5. Resources to Work on Personal Projects

Offering employees access to tools, technologies, time, and resources to pursue personal projects is an understated non-monetary benefit. This policy is called the “20% time” rule, where employees are free to explore and experiment with projects that align with the organisation’s mission and values.

Google popularised it, resulting in a culture of innovation that has led to several breakthroughs in various products, such as Gmail, Maps, News, etc.

Quick read: How to Reduce Employee Healthcare Costs?

6. Public Recognition

Public recognition involves acknowledging the employee based on their hard work, achievements, length of service, etc. It is done in front of the employees’ peers and could include award ceremonies, shout-outs during meetings, employee of the month programs, brag boards, and more.

Such public celebrations of achievements boost morale, develop confidence, and strengthen employee engagement by validating their efforts in meaningful ways.

7. Growth Opportunities

Growth and career development opportunities are some of the most valuable non-monetary rewards. Whether you offer them promotions, lateral career moves, upskilling opportunities, or sponsored training, investing in employee growth contributes significantly to their personal and professional development.

It also contributes to asset creation, talent retention, and succession planning, where employees are more open to new roles and responsibilities.

8. Experiential Rewards

Experiential rewards deliver memorable experiences, such as paid vacations, event tickets, reservations at wellness retreats, or team-building activities. Such non-monetary rewards may prove to be extremely meaningful for the employees as they create lasting memories and add to personal enrichment.

It does bear mentioning here, however, that employers must be in tune with the employees for a truly meaningful and rich experiential reward.

9. One-on-one Mentorship

One-on-one mentorship acts as an effective non-monetary incentive in the workplace by providing personalised attention and support, often from a senior or experienced staff member.

Acknowledging and valuing an employee’s efforts during these discussions enhances morale while delivering constructive feedback and coaching. It also grants them clarity on how to use their skills best and helps them feel supported, valued, and connected.

10. Tangible Gifts and Rewards

Tangible gifts and rewards, such as custom merchandise, gadgets, or other products, are great non-monetary benefits to offer to employees.

These are sincere tokens of appreciation. Even though they may not be direct monetary rewards like gift cards, they hold meaning and make employees feel valued and appreciated. These types of non-monetary rewards are tied to specific milestones or achievements to cultivate loyalty and morale.

Also read: How to Build a Competitive Employee Benefits Package?

Importance of Offering Monetary Benefits for Employers

Offering monetary benefits (and even non-monetary benefits, for that matter) attracts the following benefits for companies:

  • Employee Retention: A competitive package bundling monetary and non-monetary benefits reduces turnover by motivating employees to stick with the organisation in the long run
  • Talent Acquisition: A well-balanced compensation package draws top talent, offering your company a hiring advantage
  • Productivity Boost: Productivity-linked incentives such as commissions and bonuses encourage employees to achieve performance targets and even exceed them in some cases!
  • Employee Satisfaction: Rewarding your employees with monetary and non-monetary benefits increases job satisfaction, creates a positive work environment, drives productivity, boosts morale, and reduces absenteeism or turnover

How to Choose the Right Benefits for Your Employees

Choosing the right benefit package may seem daunting, especially when you consider what’s at stake – employee retention, satisfaction, productivity, etc. Here are some key factors to consider while making this decision:

1. Employee Demographics

Consider the age, gender, lifestyle, and financial requirements of your workforce and customise the benefits. For example, Gen-Z may prioritise the non-monetary benefit of work-life balance above monetary compensation.

2. Company Budget

Naturally, the monetary and non-monetary benefits extended to employees must align with the organisation’s financial capacity without compromising quality. Onsurity helps in this regard with its flexible insurance plan that matches your budget.

3. Industry Standards

Offer benefits prevailing in your specific industry to stay competitive and relevant in the job market. For instance, the IT sector offers handsome remunerations and remote working options; anything less, and you’ll fail to attract the right talent.

4. Employee Feedback

Conduct surveys regularly and analyse the feedback received to understand which benefits are most valued and which you can eliminate. This will help you adjust offerings and align with employee needs.

5. Long-Term Viability

Select a blend of benefits that offer immediate rewards and contribute to long-term employee well-being and loyalty. The Onsurity Wellness Program, for example, helps cultivate a workforce that stays around in the long run.

Recommended read: Employee Fringe Benefits

Closing Thoughts

From the above, it is evident that both monetary and non-monetary rewards offer distinct advantages to employees and carry distinct advantages to employers. As such, the secret lies in blending monetary and non-monetary incentives for balanced employee benefits.

Embrace a thoughtful approach to meeting your employees’ diverse needs and balancing these with the company’s budget. Conducting surveys or capturing feedback is a great starting point.

The intentional effort you put into this activity will ultimately influence employee morale, performance, productivity, and loyalty.

Does your employee benefits package hit the sweet spot between use and value? Get in touch with Onsurity for a thorough audit and actionable insights on improving employee benefits.

FAQs

1. What is meant by monetary benefit?

Monetary benefits are a direct form of compensation given to employees as part of their compensation package. They include salaries, bonuses, commissions, retirement plans, stock options, etc.

2. Is salary a monetary benefit?

Yes, salary is the most basic form of compensation that is a part of monetary benefits. It’s a fixed, regular payment for employees instead of their work.

3. What is the difference between monetary and non-monetary benefits?

Monetary benefits are financial compensation, while non-monetary benefits are non-cash rewards. The former contributes to the employees’ financial growth, while the latter helps employers retain and engage talent.

4. Are bonuses considered a part of monetary benefits?

Yes, bonuses are a form of performance-based monetary benefit.

5. Are monetary benefits taxable?

Most monetary benefits are subject to income tax. However, some, such as retirement contributions, may carry tax advantages.

6. Can monetary benefits be negotiated?

Yes, you can negotiate monetary benefits, which is often the case during job offers and performance reviews.

7. What are the most important monetary benefits for employees?

Some of the most important monetary benefits for employees include:

  • Salaries
  • Performance-based pay
  • Paid leave
  • Retirement contributions
8. How can businesses effectively combine both monetary and non-monetary benefits?

It’s a good idea to set clear goals, look at the personal requirements of each employee, and use incentives accordingly to combine both monetary and non-monetary benefits.

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