In an increasingly dynamic business climate, many companies rely on financial incentives as the main driver of employee motivation and loyalty. However, based on the results of an employee satisfaction survey conducted by The Jakarta Consulting Group on a transportation company, it was revealed that salary and benefits are not everything.
Although employee satisfaction and loyalty levels are very encouraging, there is an implicit message that warrants attention. The aspect of non-monetary rewards still needs serious attention in order to maintain this positive momentum. The lowest satisfaction levels were found in the areas of career and development, rewards and appreciation, and work-life balance.
These findings are in line with motivation theory: people work not only to meet their financial needs, but also to be recognized, to grow, and to feel meaningful.
Why Are Non-Monetary Rewards So Special?
Non-monetary rewards include all forms of recognition that are not in the form of money, but are psychologically and emotionally meaningful. These range from praise, trust, work flexibility, career development opportunities, communication, and many more. There are things that seem trivial but have a big impact on employee satisfaction and loyalty. Rewards and praise, for example. Although it sounds simple, personal appreciation from leaders is very effective in making employees feel valued.
Career development opportunities are also very important, especially for the younger generation. In a culture where family relationships are highly valued and prioritized, flexibility and time for family are highly desirable. Meanwhile, open dialogue and positive feedback can be “nourishment” for the soul. In the case of the transportation company above, these things still need improvement.
Frederick Herzberg, through his Two-Factor Theory, divides the factors that influence employee job satisfaction and loyalty into two: hygiene factors (e.g., salary, working conditions) and motivators (e.g., recognition and challenges).
Salary is included in hygiene factors. If it is insufficient, employees will protest.
However, even if it is adequate, it does not necessarily mean that they will be satisfied and that employee loyalty will increase. It is actually non-monetary factors, such as recognition and opportunities for growth, that truly trigger satisfaction.
The lowest level of satisfaction is felt by millennials or Generation Y. The younger the employees, the more demands they have. In fact, the role of the younger generation, consisting of millennials and Generation Z, is becoming increasingly dominant. Companies that neglect to meet these needs risk losing their best talent.
According to Gallup research (2022), sincere non-monetary rewards can increase employee engagement by up to 40 percent—more effectively than one-time bonuses.
Strategies for Building Employee Engagement and Loyalty Through Non-Monetary Appreciation
What can be done to increase engagement and achieve employee satisfaction and loyalty.
1. Sincere recognition
Everyone wants to be appreciated. It doesn’t have to be anything grand, something as simple as “thank you” or an Employee of the Month award can be motivating. Recognition is vitamin for the soul—it makes employees feel appreciated.
In addition, programs such as spot recognition—spontaneous appreciation for specific achievements—can spark a wave of enthusiasm throughout the organization.
2. Open up more opportunities for career development
Today’s employees are not only pursuing material gains, but also valuable experiences. Offering career experiences such as job rotations, mentoring programs, or special project challenges can be priceless rewards.
With a fair promotion system, companies not only reward performance but also build employee trust and loyalty.
3. Balance life and work (work-life balance) with humane leadership
Life balance is not just a matter of working hours but also how companies view employees as whole human beings.
Steps to Build a Meaningful Culture of Appreciation
Leaders at all levels need to be encouraged to be empathetic figures—leaders who not only pursue targets but also care about the well-being of their subordinates. Humanistic leadership not only increases employee satisfaction and loyalty but also strengthens emotional bonds.
A good reward system not only assesses results but also processes and behaviour. Companies need to align this system with the core values of the organization. The concrete steps that organizations can take are:
- developing recognition and reward guidelines that include criteria for non-monetary appreciation,
- Holding regular cross-unit, department, or division (whatever the name) appreciation forums to showcase individual and team successes,
- Strengthening two-way communication channels, and
- Linking rewards to career development, so that each appreciation has a long-term impact.
The employees of the transportation company mentioned at the beginning of this article are highly loyal thanks to the company’s reputation and stability. However, according to Kahn (1990), employee loyalty alone is not enough. Employees need to feel that their work is meaningful, psychologically safe, and emotionally supported.
This is where non-monetary rewards come in: they create meaning in work. When someone feels valued not because of money, but because of who they are and what they contribute, their attachment will endure—even in the midst of change.
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