I regularly get asked, what are the Non Monetary ways to reward employees.
It’s a daunting subject, one that’s often overlooked by many managers and leaders. In fact, in my experience, how to incentivise employees and reward them is the crux of good change management, and leadership.
And it provides the difference between a highly motivated and productive workforce and one that’s not.
Most managers often believe that pay is the only real way to motivate and incentivise employees.
If it’s the only way, then why aren’t companies with the biggest wads of cash always the most successful?
Why isn’t there a correlation between employee wage and business success?
Pay is a factor, but it’s just that: one element that should go into a pot of many different tools and techniques to help incentivise and engage employees.
Most of these factors are non Monetary ways to reward employees.
I once worked with a reasonably large manufacturing company, who’s senior managers believed that pay was the only factor in keeping people happy and engaged.
They simply rewarded people with pay rises to prevent them from leaving, whilst they didn’t bother talking or leading effectively (or they didn’t know how to do it…) They even used pay to try to stem poor performance.
I kid you not, in one instance, one employee breached company rules and in most instances, would have been sacked for it. The senior manager responsible for this employee gave him a pay rise!
A while later I asked him why he did it, and his answer was, “if I can pay him more money, hopefully I can change his performance and attitude.”
This guy should have been disciplined and at the very least been given a verbal warning.
But instead he was given a pay rise and then asked to work differently!
What message does this provide the workforce?
Well in this instance, it was one of outrage.
People were disgusted of how weak leadership was in the business.
“If he can do it and get away with it, then so can I!”
That was an extreme example, but it reflects what a lot of managers do. They make decisions based on providing money as the carrot incentive, hoping that things will improve and attitudes will get better…
Most unhappy employees will cite pay as the number one priority.
But the reality is, the majority of ideas come from non monetary ways to reward employees.
As I’ve said, there are a lot of factors that go into providing an incentive and most of them are non monetary ways to reward employees.
So its more than just pay.
In fact, people want to be paid what they believe they’re worth. This could be paid in line with the local pay rate, or the industry. If they’re not, they become dissatisfied.
Other factors can influence their dissatisfaction or satisfaction levels. And they come from ineffective leadership and also the working environment they’re in.
Here’s a guide on it in greater depth.
In brief, Herzberg created a model that suggests there are two polarities:
As a manager, you need to understand the factors that create dissatisfaction and frustration.
When you do, try to eradicate them.
The problem is, if you get rid of these dis-satisfiers, you only make people ‘neutral’.
And that means they’re no longer unhappy, but they’re not happy either.
This explains why when someone gets a pay-rise, they tend to revert to being critical of things shortly after. They were simply in a neutral state until the many factors that upset them in the first place take their toll again.
Once the dissatisfiers are taken care of, it’s time to implement the satisfiers.
These are the factors that are proven to reward people and drive happiness. Again, most are non monetary rewards.
And when you do this, you to start bring people from the neutral state to the satisfied or happy state.
At this point, this better ‘environment’ can aid in providing non monetary ways to reward employees.
This same question comes up when talking about change. How do we find non monetary ways to reward employees to adopt new ways of working and behaviours?
Yes, it could be a bonus or a pay-rise.
But as you can see, it could be a whole lot more.
This means you must think a bit creatively to try to come up with as many ways to reward your teams and to improve the working environment.
Nearly every single time you ask an employee to do something new or different, they will think, “What’s in it for me?”
Yes, you want to get them to be more engaged and you want the business to benefit, but you must provide a ‘return’ for a job well done! Something that will please them and provide an answer to their WIIFM question.
To make it easier, there are 4 key areas to provide incentives and non monetary ways to reward employees.
Think of it as your very own reward system.
Think of ways you can help each team member learn additional skills. Feeling stagnant is a sure-fire way of opening the door to looking for a new job somewhere else.
A good way to keep people learning and developing in their roles is by using the Situational Leadership Model. In this model, you constantly lead and coach each team member through a learning curve. And when they are proficient at that certain skill, you look to develop them more by adding a new skill, and going through the loop again.
And this happens repeatedly.
This approach is about leading and coaching, and works very well indeed. It can form the cornerstone of providing a bridge between learning skills, providing empowerment and leading effectively through coaching and supporting.
Other methods of learning could be:
Empowerment gives employees the sense of growth and responsibility. This can in turn provide a sense of personal worth and fulfilment.
The problem is to ensure that you provide a platform for your employees to try something and learn from their mistakes, instead of jumping in and trying to get things done for them (which is the common issue many managers make…).
The secret is to avoid micromanagement when it’s not needed and slowly open up and release more autonomy as they grow in their skills.
How do you do this?
It’s back to our Situational Leadership model, again. Use it by assigning new tasks to each team member and managing them through the learning curve.
And focus on providing coaching most of the time. Someone once said, that there are a few things you can manage:
But you can’t manage people.
You should lead them.
Leading brings a whole new dynamic to the relationships between you and your employees and provides a positive environment, which can empower, develop and generally increase happiness within your teams.
Coach your employees so they can understand the right behaviours that’s expected. Allow them to learn and develop their skills under your guidance.
This should be a common thing that managers should do without too much thought.
But, unfortunately, it often gets forgotten amongst the rigours of day-to-day managing.
I hear so many employees cite, “if I just got a thankyou from time to time, it’d go a long way…”
The flipside is this: If a thankyou is not given with heart, then it’s worse than not doing it at all!
You must be meaningful in your feedback and sincere.
And if this comes as a new skill to you, try to work on providing positive feedback in a ratio of 5:1. This means for every criticism, try to engage in 5 positive feedbacks that you really mean.
When providing recognition, I would argue that there are 6 levels in a typical hierarchy. Each one is in a level can be built on from the previous.
Start to think about how you can provide each level of recognition.
What behaviours should you recognise at each level?
Having fun is also essential.
Who wants to come to work in a dull and boring environment?
Those that do, won’t last long. And if there’s another opportunity for them, you can confidently predict they’ll probably be off in heartbeat.
Injecting a light-hearted feel around the place is not easy. But it pays in the long term, if you can stop and give it some thought.
No one wants to constantly hear the same rhetoric; the same daily questions every day. The same daily grind. They want the ability to loosen up at times and have a laugh without the feeling of being recriminated.
That doesn’t mean slacking, whilst you turn a blind eye. It means providing strategic moments to encourage a team ethic, open up to each other have a non-work chat, and some general open communications around the place.
Being flexible in your leadership is essential, too. You must be able to know when to lead and when to manage: when to manage and when to back off.
Perhaps offering flexible time as a reward for a great job done?
Try to promote a work-life balance and not request too much of your teams’ time?
These are just a couple examples that could be used to help lighten the load.
Another great idea is to use a points system to reward the right behaviours in the business.
Car 2 Go Insights adopted a great scheme that encouraged people to give points out to their colleagues and also receive them for jobs well done: https://blog.car2go.com/2016/09/15/how-we-keep-workplace-engagement-fun/
The results were very positive indeed. They noted an improvement in productivity and a general good feeling around the place. The system is still in positive effect today.
For each of these 4 areas, that we’ve just highlighted, think of ideas that will help provide positive reinforcement and broaden your rewards and recognition?
Not all people will be roused by the same things, so it pays to think of this as more of a strategic campaign.
What I mean by this is that it’s a long project that needs to have many different tactics and initiatives running in tandem.
Your rewards plan should be thought of as a strategic part of your business and HR plan.
It should be treated like a campaign.
And it should be thought of as a long-term framework that everyone works within.
Not just a five minute ‘back of the cigarette packet idea.’
What do I mean by the ‘right behaviours’?
Start with the end in mind. If you want to provide non monetary ways to reward employees, then you have to know what behaviours you’re asking them to perform.
These behaviours could reflect your company values or just things you want to recognise, like:
You may have many more ideas, but the answer to this question is this:
“What behaviours do you want your employees to adopt and embed?”
With a company that I worked with recently, they highlight the following behaviours that they wanted to employ every day and as part of their culture:
The point here is to first diagnose what is important and what you want to instill every day as part of the business’ behaviours.
Once you have this, then you need to create your own non monetary ways to reward employees (as well as monetary, too – as it has its part to play) and start recognising these behaviours, positively and leading people everyday.
Take the rewards-plan-template and write down the behaviours / outcomes you want your employees to adopt. These could be:
But these values and behaviours are specific to each company, so write those that you and your business are built around and believe in.
Once you have this section completed, take each of the four sections, one by one, and brainstorm ideas that you could implement in view of promoting and rewarding this good behaviour.
Try to keep it simple and don’t take on too much too soon.
This is only your first draft; you can add to it later.
Here’s an example of another company’s non monetary ways to reward employees:
Now download the template and create your own version to start rewarding and energising your teams.