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Non Financial Benefit

Non Financial Benefit

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Published by Nisha_Yadav_6277

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Published by: Nisha_Yadav_6277 on May 27, 2010
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What are non-financial benefits?
The benefits other than money or financial benefits, that indirectly affects the performance of an employee are called as non-financial benefits.

• Motivation influences performance. A feedback loop between motivation and performance exists, with each potentially impacting the other. • Remuneration is a component of both financial and nonfinancial reward; financially, in terms of cash and benefits received; non-financially in terms of recognition, status and esteem

Non-monetary rewards should form one important part of a complete employee recognition program along with monetary rewards.  Each motivates employees differently.  Nonmonetary rewards can be used for either individual or team rewards. Non-monetary recognition can be very motivating, helping to build feelings of confidence and satisfaction. Non-financial rewards can be very costeffective for companies because, in contrast with a pay increase, little or no income tax or national insurance contributions are paid.

Effectiveness of Non monetary benefits
Rewards and recognition can be powerful tools for employee motivation and performance improvement. Non financial forms of rewards and recognition may be less tangible, but still very effective. These "non-monetary" rewards include formal and informal acknowledgement, assignment of more enjoyable job duties, opportunities for training, and an increased role in decision-making. Also it helps in retention of employees.

What types of nonmonetary rewards are the most effective?or extremely 78% of employees indicated that it was very
important to be recognized by their managers when they do good work .  The number one choice for recognition is sincere praise given in a timely manner.  Developmental opportunities, such as assignments to special projects as a powerful form of non-monetary recognition .  People are motivated to higher levels of job performance by positive recognition from their managers and peers Creative use of personalized non-monetary rewards reinforces positive behaviors and improves employee retention and performance. These types of recognition can be inexpensive to give, but priceless to receive.

Forms of Nonfinancial Benefits

• Job enrichment
 It gives workers the chance to test themselves and use
their full range of ability  It is more motivating than job enlargement or job rotation (see below) as it increases the complexity or challenge involved in the task, rather than just simply providing more variety to the work.  Workers should obtain a greater sense of achievement and possibly more praise or recognition of their work when they have successfully completed a tougher task  Workers respond better as managers have shown trust in the fact that they possess the ability to handle the increasing complexity and pressures of the work.

• Job enlargement
 Job enlargement means simply giving workers more tasks to do of a similar nature or complexity.  This will reduce the monotony or repetition involved in a persons work but over time this will not increase a person’s satisfaction or sense of achievement.

• Team working
 Teamworking is where employees work in groups or teams. This can meet a worker’s social needs as a person.  A business can create a number of different types of team; examples include production team, quality circles and management teams.  Teamworking can also lead to greater flexibility of production, as employees are likely to be multi-skilled.

• Empowerment
 Empowerment is like delegation. It is when power or authority is given to employees so they can make their own decisions regarding their working life.  They are encouraged to consider problems they face and come up with some solutions.

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