Employee Retention Highly Depends on Non-monetary Rewards

Today, most organizations are constantly in search of new methods to improve the performance of their employees with the aim of achieving better financial results (Saraswat and Aora, 2016). The use of different incentives is among the ways to increase the commitment of individuals and teams. The contemporary theories like the Motivation-Hygiene theory by Herzberg postulate that no-monetary reward may be as sufficient for this purpose as monetary methods.  This essay aims to explore how non-monetary rewards can influence employee retention. 

Non-monetary rewards are incentives which involve indirect compensation to the employees without using money. These rewards of non-monetary compensation  include a positive working environment, training and development opportunities, empowerment and autonomy, recognition of individual achievements, flexible working arrangements, and team rewards. The above instruments have been put in use by many global companies such as Coca-Cola and Nestle. This idea of non-monetary rewards increasing motivation and job performance was first realized in work by Fredrick Herzberg, who innovated the Motivation-Hygiene theory (Herzberg, 2017). Based on the theory, it is postulated that monetary compensation and other tangible motivators have a limited impact as ‘hygiene” factors or the incentives expected from all organizations and are standard across similar job positions. 

Concurrently, it was discovered in a study by Gabriel and Nwaeke (2016) that there is no positive correlation between job autonomy, job enrichment, and employee satisfaction. This indicates that non-monetary rewards vary in their efficiency and should be selected on a case-by-case basis according to specific team composition and needs. A few members may be motivated explicitly by self-development programmes that allow them to increase their professional abilities, which is also significant for team performance (Emerole, 2015). 

In conclusion, non-monetary rewards are an important prerequisite of employee retention in the organization of all size. Therefore, these instruments can be highly relevant for maintaining long-term commitment and increasing the overall effectiveness of company operations that in return, the organization will realize improvement in teamwork quality and a positive working environment that will positively impact the firm. 

References 

Emerole, O. (2015) “Effect of Non-Monetary Rewards on Productivity of Employees among Selected Government Parastatals in Abia State, Nigeria”, IOSR Journal of Business and Management, 17 (4), pp. 6-11. 

Gabriel, J. and Nwaeke, L. (2015) “Non-financial incentives and job satisfaction among hotel workers in Port Harcourt”, Journal of Scientific Research and Reports, 6 (3), pp. 228-236. 

Hewison, R. and Holden, J. (2016) The cultural leadership handbook: how to run a creative organization, London: CRC Press. 

Saraswat, Y. and Arora, K. (2016) “Non-monetary rewards in manufacturing industry”, International Journal of Research in IT and Management, 6 (5), pp. 157-172.