Non-financial reward – How can it make a difference?

The role of financial reward in attracting and retaining people at work has been recognised for many decades. While pay and benefits also motivates people, as an extrinsic motivator (i.e. what the organisation does to or for people) the impact is generally short lived. According to the 2008 CIPD Reward Management Survey, while over half of organisations still take a tactical approach to reward, more employers are looking at non-financial rewards.

Why has non-financial reward become more important? Evidence shows that these intrinsic rewards e.g. recognition; personal growth and development etc. which arise from the work itself are more effective motivators and generally result in a longer term effect.

Taking account of fairness, non-financial rewards also fare better since the reward e.g. recognition can be directly related to the achievement. By contrast this may not apply in the case of a pay award. For a more in-depth look at this topic, see the CIPD Reward Podcast  which covers this topic.

Take a look at the Tips section below to see what needs to be included in your Non-financial reward checklist?

Tips: What Needs To Be Included In Your Non-financial Reward Checklist?

Build a Recognition Culture – While it may get overlooked, recognition ranks as one of the most powerful motivators playing a key role in effective reward practices. In its simplest form, it can be praise given for a job well done or a line manager who listens to staff and acts upon their suggestions. In other words, people need to be aware that their achievements have been recognised and appreciated.

The benefits of immediate feedback are evident and recognition can also be aligned to financial rewards, though caution needs to be exercised to manage the perception of winners and losers. Take a look at the Feb 2007 issue of Just Rewards which focuses on recognition.

Establish Career Opportunities and Personal Development – Maslow's well established hierarchy of needs presents self actualization as the ultimate motivator and one applicable at all job levels. In practical terms, offering opportunities for learning and development or enhancing existing skills will act as a powerful motivator.

Make influence central to decision making – Influence and power are also prime motivators and can play an important role in effective decision making. Consider the opportunities for people to get involved and contribute to organisational decision making.

Focus on the Work Environment – This can cover a wide range from flexible working opportunities; autonomy to carry out the job role; the physical work environment to giving staff the tools required to perform their role effectively. For example, giving people responsibility in their job and autonomy to make informed decisions can impact business outcomes as well as employee engagement and retention levels.

Look at the past issue of Just Rewards which focuses on employee engagement.

Website Of The Month

This month we look at PM Online which is the online magazine of People Management the publication produced on behalf of the CIPD.

Why look at the site? – People Management is the UK's biggest Human Resources publication with a fortnightly circulation list of over 120,000 readers and recognised as the official publication of the Chartered Institute of Personnel & Development

What works well? – High quality journalism across a range of people management disciplines.

What could be improved? – As a mainstream publication covering the range of HR issues, some reward issues don't always receive the level of coverage they deserve.

Reward News – Calendar of 2008 events for CIPD Reward Special Interest Group

Take a look at the CIPD Reward SIG events that we're running this year:

Total Reward – How to manage the challenges of implementation – London event on 23 April 2008.

For booking and information click here:

Reward and Mergers & Acquisitions – Making it happen! – London event on 15 July 2008

For booking and information click here:

Global Reward Programmes – How to establish a successful framework – London event on 14 Oct 2008

For booking and information click here:

Please note – these web links will cease once the event date has taken place.

If there are other topics you would like to read about, or if you would like to contribute to Just Rewards, Click Here.

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** Please note that this advice is provided as guidance only. If you need specific advice relating to your requirements, please call Reward First on + 44 (0) 1367 710 618.

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