8 Benefits of Non-Monetary Recognition in the Workplace

A well-defined recognition strategy can carry out many of the company's goals. The key to creating a supportive culture of appreciation is to tie company values to non-monetary recognition. Read on to find out why and how.

What is non-monetary recognition?

Non-monetary recognition in the workplace acknowledges an employee's value and efforts to contribute to the company's goals. Non-monetary recognition does not use monetary stimulus - it relies on verbal or written appreciation messages to employees.

Companies use non-monetary recognition to motivate and show employees that their contribution is seen and valued. This type of recognition can be verbal or written, public (social) or private, formal or informal, peer-to-peer or top-down.

When companies appreciate their employees, they build a culture of appreciation and a positive work environment oriented towards growth, mutual support, and respect.

What is the difference between recognition and rewards

Recognition shares a common goal with rewards, namely that it is used to motivate employees. However, there are stark differences between these two ways of motivating employees. In the same way as rewards, recognition impacts morale and boosts workplace productivity while encouraging employees to strive to be their best selves.

Non-monetary recognition is intangible and non-transactional. A written or spoken message of appreciation carries substantial weight despite not having concrete monetary value. On the other hand, rewards are tangible, whether they are experiential rewards, gift cards, or swag items.

Further on, recognition plays on employees' intrinsic motivation, which is their need to be seen and valued for their excellent work. On the contrary, rewards play on employees' extrinsic motivation, their desire to attain specific rewards and reach a certain status.

Benefits of non-monetary recognition

Non-monetary recognition influences company culture, bringing a plethora of interconnected benefits to companies that do it right. HR specialists agree; according to Hero and Mercer, 85% of HR Leaders say an employee recognition program positively affects organizational culture. Here's a list of some of the most striking metrics that considerably improve with the introduction of recognition programs.

1. Improved retention

Non-monetary recognition improves employee retention. According to SHRM, 68% of HR professionals say employee recognition programs positively affect employee retention.

The reason this works is because making employees feel valued influences their desire to stay at a company or not. One of the concrete ways to recognize employees is to celebrate their service anniversaries. If companies do that early enough during the employees’ time at the company, they increase the chances of employees staying where they feel appreciated for their efforts.

2. Increased engagement

The way non-monetary recognition impacts engagement at work is by highlighting employees’ behavior that companies wish to see more of. Deloitte finds that employee productivity, performance, and engagement are 14% higher in organizations with recognition programs than those without them.

The key to running a successful non-monetary recognition program is to tie the recognition objectives to company values. For example, if a company wishes to increase customer experience at work, the recognition program should feature a value that targets employees’ behaviors that have good results with customers. Very soon, employees learn what behavior gets them noticed.

The more employees learn that their efforts do not go undetected, the more they feel encouraged to act in the same way. As a result, engagement increases, and employees repeatedly exhibit behavior aligned with company values.

3. Boosted productivity and performance

Similar to how non-recognition programs impact engagement, they also positively influence productivity. While engagement in itself is crucial for positive company culture, it is also vital that employees contribute to company goals and hit targets that their managers set for them.

Engaged employees are more productive. According to the University of South Carolina, the likelihood of helping your peers in groups with an established peer-to-peer recognition system is 49.2%, and in groups without: 35.9%. This means that teams will be able to reach goals faster when they are encouraged to recognize each other’s efforts.

4. Elevated employee experience

When companies make an effort to do more for their employees beyond the standard compensation and Total Rewards, it improves how employees feel working for a particular employer.

Non-monetary recognition programs signal a positive company culture and prove that employers care for and respect their employees. When the recognition programs are reasonable, transparent, and fair, it improves employees' trust in the employer, making their time at a company more meaningful and worthwhile.

5. Improved customer satisfaction

Excellent customer service is all about going above and beyond. We've known for a long while that improving customer experience with a brand contributes to organizational success.

Because businesses depend on their people to achieve company goals, when employees feel content, this also translates to customers. Therefore, customer satisfaction is closely related to how employees feel in a company, and employee experience is the new customer experience. Satisfied and engaged employees will do all they can to ensure pleasant customer interactions and be more resilient to withstand challenges.

6. Better profitability

Better profitability is an outcome of several combined benefits: improved productivity makes reaching company goals faster, reduced retention saves time and money on onboarding new candidates, elevated employee experience attracts new talent to the company, and finally, customer satisfaction makes existing customers stay loyal to the brand. These benefits save companies money and allow them to be more agile when challenges arise.

Companies can choose to give out bonuses and incentives, which often does the trick in serving the companies' bottom line. However, non-monetary recognition hits that sweet spot of making employees want the company to perform better simply because they enjoy benefiting the company instead of just doing the job for compensation.

7. Better workplace relationships

People thrive in supportive environments. Most people would rather work where colleagues help each other instead of competing with them. That’s why non-monetary recognition has a powerful effect on relationships within the company.

Peer-2-peer recognition, in particular, plays a prominent role in encouraging healthy, mutually supportive workplace connections. Increasing the practice of seeing the good in one another benefits the team and makes everyone who contributes feel praise-worthy.

Top-down recognition also significantly impacts levels of trust between employees and their managers. According to Forbes, "nearly 90 percent of employees who received recognition or thanks from their boss in the past month indicated higher levels of trust in that boss." When employees trust one another and their leaders, they are truly set up for success.

8. Improved agility

Recognized and content employees are more motivated to perform their job well. Organizations that value teamwork, which non-monetary recognition can also support, will experience better synergy in task completion and alertness to solve problems as they arise. Only a content and collaborative workforce will have the resilience needed to weather challenges when push comes to shove.

One way in which recognition programs could enhance organizational agility is when recognition is tied to company values such as innovation. Employees who focus on consistently delivering innovative solutions can come up with new ways that allow companies to pivot when the market's changing.

How to introduce a non-monetary recognition program in the workplace

In the previous paragraphs, we have demonstrated how non-monetary recognition programs are highly beneficial for companies’ success. However, introducing a recognition program needs to be done step-by-step to maximize the company's benefits. Read on to find out what are some of the crucial steps when it comes to introducing a non-monetary recognition program.

1. Stakeholders’ approval

On an organizational level, stakeholders for recognition programs are spread throughout the company. Firstly, there are the employees who are the beneficiaries and end-users of recognition programs.

Further on, the managers act as carriers of company culture and are hence instrumental in ensuring a good adoption of a non-monetary recognition program.

The HR department is the most critical stakeholder as they are the ones who will detect the need for recognition programs and the most appropriate way to introduce it. The HR will also be the ones to carry out the program introduction and be instrumental in designing it.

Finally, senior leadership should also be on board and understand the benefits of a non-monetary peer-2-peer recognition program. Nowadays, there's a trend for HR officers to step up and take space in the C-suite; and it's become easier to convince the leadership of the importance of having recognition programs in place.

2. Design the recognition programs

When recognition programs are designed from scratch, the first and most important piece of the puzzle is to connect recognition programs with company values to ensure that companies create a thriving culture that is aligned with company mission, vision, and goals.

Most companies choose to use several recognition programs, including non-monetary and monetary programs, with peer-2-peer programs alongside nomination options. Each program should be precisely designed to ensure it delivers a great employee experience and is connected to specific company goals to make sure it inspires the desired positive outcomes.

It's important to mention that each company is unique and has different needs from a recognition program and that these needs may change as companies grow and market requirements shift, too. Therefore, the recognition program’s flexibility is an essential factor to consider.

3. Choose the best recognition software

The HR tech space is full of tools to choose from, but not all tools are built the same way. Some smaller to mid-sized companies have different needs and benefit from other tools than enterprises do.

Some recognition programs for example only provide a recognition platform, with little to no integration possibilities with other HR tools. Ideally, you will be looking for recognition tools tied to your company's core HR system. That way, recognition can be scaled, automated, and highly personalized.

4. Define your metrics and track them

Here is where HR plays a prominent role. The HR knows what the company workforce needs the most based on various surveys, feedback programs, and exit interviews. When the goals are identified, for example, improving employee engagement or customer satisfaction, then HR will also look for which metrics to track.

Some examples of valuable metrics to track are turnover rate, Glassdoor ratings, employee satisfaction and productivity, overall safety on a company level for mostly blue-collar employees, and so on. Within a timeframe, you will be able to see how recognition programs impact these areas, and you will get clues on how to fine-tune the agenda if needed.

5. Make sure your recognition programs are well-communicated, accessible, and fair

Pioneering a non-monetary recognition program includes identifying and defining the procedures, who, what, and when gets nominated. Internal communication about introducing the new programs should be carried out systematically and strategically. Ensure employees know how to access the programs, that everyone has equal access regardless of how or where they work, and that everyone can be appreciated.

Ideally, recognition programs happen within the flow of work of employees. That means they can use the tools they usually use, for example, Microsoft Teams or Facebook's Workzone, and complete the recognition within those tools. The added benefit here is that recognition becomes mobile and more accessible.

6. Make recognition social and interactive

A great practice is an internal company social wall where everyone can see the recognitions currently being given out. Also, it would be beneficial if recognition programs could be shared outside the company; that way, the appeal is even more increased. When someone gets kudos from a peer they respect, they will love to share it on LinkedIn, which will have added benefits to the company's branding as an employer.

Final Words

Non-monetary recognition has many benefits companies could use to elevate their employee experience. Introducing programs for employee recognition helps companies boost employee engagement and profits, enhance workplace productivity, strengthen relationships, and improve organizational agility.

When companies decide that a non-recognition program would serve their corporate goals, there are a couple of essential factors to consider, and we've included those in the last section of this blog post.

About the Writer

Ravijojla Novakovic - As a content marketing specialist for Semos Cloud, I help HR leaders to reimagine employee experience and navigate the world of HR tech. When I'm not researching or writing, I'll be somewhere outdoors exploring the great out there.