Difference between Monetary and Non-Monetary rewards

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Before talking about rewards and benefits given to the employees of the organization, we have to know about the importance of motivation at the workplace. Motivation of employees is the major issue which helps the organization to grow, every manager in the organization mainly focuses on employee motivation with the help of various rewarding techniques including monetary and non- monetary rewards at various levels of the organization.


Monetary rewards are the incentives given to the employees of the organization in the form of money. Some employees are motivated only if there is money element involved. The monetary incentives
are mostly given based on the performance of an employee. The monetary incentives given to the employee are direct benefits to the employee and is considered as an exposure to the employer.

Some of the monetary benefits, which are given by the organization are
⦿ Profit sharing,
⦿ Stock options,
⦿ Bonuses,
⦿ Commissions,
⦿ Merit pay, etc.


Non-Monetary rewards are the benefits given to the employees of the organization to increase the employee job performance, employee loyalty towards the organization, employee morale, etc. The Non-Monetary rewards as the name suggests does not involve direct money. i.e., the employee doesn’t get any money but he gets various benefits like,

⦿ Promotions,
⦿ Food coupons,
⦿ Company uniforms,
⦿ Flexible timings,
⦿ Healthcare Benefits,
⦿ Life insurance policy, etc.

Many studies have been conducted and found out that, the benefits which are in non-monetary form derives more benefits to the organization because it involves some form of emotional bondage with the employees which increase employee loyalty, which automatically increases job performance.


Monetary rewards are the incentives which involve direct money to the employees. Non-Monetary rewards are the incentives which do not involve direct money to the employees.
Monetary rewards are given to the employees who are extremely performing or extremely talented. Non-Monetary rewards are usually given to all the employees of a certain level to offer them convenience and security.
Monetary rewards can work as a negative force to the organization because the people of the organization who are getting monetary rewards only concentrates on money by leaving the morality. Non-Monetary rewards always act as a positive force because the people who are getting non-monetary rewards usually don't get attracted to money and focus on the emotional and psychological benefits.
Monetary rewards are considered as an expense to the organization because it is an additional payment to the employees. Non-Monetary rewards are also considered as an expense to the organization but there is no direct money given to the employee.
Sometimes monetary rewards given to one employee may arise conflict in the other employee and there would be a problem of disturbed relationships among the employees in the organization. Non-Monetary rewards do not arise any kind of conflicts within the employees besides they encourage healthy relationships among them.


Anyway, there prevails dual opinion among the managers of the organization in matters of monetary rewards and non-monetary rewards. Every reward have their own advantages and disadvantages and not every monetary reward makes the employees motivated and there are many problems associated with every type of reward because the perceptions of humans differ from one other.