Monetary vs. Non-Monetary Rewards: What Are They Actually Worth?

Two high-performing employees in similar roles are due for a reward. One gets a $1,000 cash bonus. The other gets an additional day of remote work per week.

Both are grateful for their rewards, and they should be–their employer tailored them to their preferences. But there’s more happening beneath the surface.

The cash winner is motivated to perform and would like to keep earning extra cash in the future. The hybrid employee is thrilled they’ve found a company that honors their desire for flexibility.

Each of these rewards went a long way in engaging employees. Does it matter if one is motivated by money and the other is motivated by flexibility? Why is the reward that costs the company nothing more valuable in some eyes?

We’ll explore these questions and more as we break down monetary rewards and non-monetary rewards with examples, pros, and cons.

What’s the difference between monetary and non-monetary rewards?

Monetary and non-monetary are two types of employee rewards. A monetary reward’s purpose is its financial value. The benefits are immediate and tangible. Non-monetary rewards are more about emotional fulfillment. They can have a longer-term impact.

With personalization, both monetary and non-monetary rewards can serve their highest purpose. Someone who loves investing can feel prolonged gratitude and enhanced loyalty when offered company stock options (monetary reward).

They enjoy some of the same benefits as the ambitious, growth-oriented employee who gets mentorship from a company leader (non-monetary reward).

Choosing between the two often comes down to:

• Company values
• Company culture
• Employee preferences
• The reason for the reward
• Industry
• Budget

Striking a balance is necessary to continue making monetary rewards sustainable and non-monetary rewards meaningful.

Monetary rewards: Examples, advantages, and drawbacks

Monetary rewards boost extrinsic motivation. The reward is an external entity driving our desire to excel.

The monetary reward we’re most familiar with is a raise. We’re rewarded for our loyalty and/or performance with more money. As we’ll find, rewards with inherent monetary value are a relatively broad category.

Monetary rewards examples

These financial rewards include, but aren’t limited to:

• Bonuses
• Raises
• Profit sharing
• Stock options
• Insurance benefits
• Discounts
• Commissions
• Educational reimbursements
• Gifts cards*

You’ll notice a few of these, like insurance benefits and, in certain positions, commission, are expected. Full-time employees aren’t highly motivated by them because they’re considered standard for their roles. They’ve likely confirmed they’ll receive these “rewards” before accepting an offer.

*Gift cards have a cash value and are technically monetary. However, they are more easily integrated into a meaningful, mostly non-monetary rewards program.

The pros and cons of monetary rewards

Can you be extrinsically motivated to be a better collaborator? Is money all we want or need from our jobs? The answer to both is “probably not,” but these rewards still have a place at work.

Non-monetary rewards: Examples, advantages, and drawbacks

On the other hand, we have non-monetary rewards leveraging intrinsic motivation. When we’re intrinsically motivated to achieve something, we’re after the good feelings we get from aligned values, positivity, and growth.

When we think of non-monetary rewards, we might think of winning a title like Employee of the Month. On the contrary, the most popular picks center around fostering professional growth and supporting our total well-being. They are what take a basic benefits package to a holistic total rewards strategy.

They can cost the company some money, but aren’t financially focused.

Non-monetary rewards examples

Thanks to personalization, there are few limits on what constitutes a non-monetary reward. Here’s a list of some more common rewards:

• Flexible work arrangements
• Role autonomy
• Extra time off
• Mentorship
• Training
• Lateral movement
• Wellness programs or resources
• Office perks
• Personalized experiences
• Events or celebrations
• Meals, coffee, or snacks
• Formal recognition, like plaques or certificates

Many non-monetary rewards pay back commitment to the company’s goals by acknowledging the recipient’s personal goals and interests. It’s this factor that truly separates non-monetary from most monetary rewards.

The pros and cons of non-monetary rewards

If an employee goes above and beyond, is lunch enough? Do some of these rewards make the company look cheap or ungrateful? This is avoidable with intention and personalization.

Monetary and non-monetary rewards: A side-by-side comparison

Let’s recap some key points about these two types of employee rewards.

BOTTOM LINE: There’s a time and a place for monetary rewards. Especially for employees who stick with the company and are consistent performers.

Non-monetary rewards remain the best way to positively acknowledge employees on a regular basis. We can maintain higher engagement and morale long-term.

Non-monetary rewards ideas for teams and individuals

In case you wandered in unaware, HeyTaco is a peer recognition platform that simplifies reward-giving. It’s easy to track participation with HeyTaco, so you know:

1. WHEN to reward an individual or a team

2. WHY you’re rewarding them

Good thing, too. Timeliness and specificity are two of the most important factors in effective recognition programs that culminate in rewards.

Thousands of companies worldwide use HeyTaco as part of a rewards program. Here are some non-monetary rewards ideas we’ve seen implemented to great success:

• Volunteer Days. Employees get an afternoon to unite for a common cause and spend time together in the service of others.
• Game night. Asynchronous teams are rewarded with virtual gaming tournaments.
• Learning. Reward recipients get special one-on-one classes, workshops, or tutorials from a department head or experts in their field.
• Entertainment. Get rewarded with a subscription to Spotify or Netflix, or receive tickets to the local theater.
• Fitness and wellness gifts. Rewards such as gym memberships or spa treatments have both intrinsic and extrinsic value when put in the right hands.

Get dozens more non-monetary rewards ideas from HeyTaco users and implement them today with your free 30-day trial.

Monetary rewards vs. non-monetary rewards FAQ

When should I use monetary rewards?

Monetary rewards can be an incentive or a result of exceptional performance. They may also be appropriate for professional milestones, like 10+ years of service. More flexible monetary rewards, like gift cards, may be given more frequently as part of a recognition program.

Does Gen Z prefer non-monetary rewards?

Research suggests that Gen Z prefers competitive pay combined with non-monetary and experiential rewards as part of a total rewards strategy. Finding meaning in their work, feeling appreciated, and having access to growth opportunities are all key.

How often should employees be rewarded?

Repeat after us: Recognition daily, rewards on occasion. In any program that includes rewards, make 80% of appreciation recognition, and about 20% rewards.

Are non-monetary rewards as motivating as money?

In some cases, non-monetary rewards are more motivating than simple cash. Intrinsic motivation has more staying power. If someone is paid fairly, perks like scheduling flexibility can sustain their motivation long-term.