As we enter into the 21st Century, we see many changes in different facets of
our life. One of the many changes is the ever evolving area of the workplace.
Employers are encouraged to change the way a business is run to fit the changing
needs of the employee. As the employee needs change, so does the compensation and
reward system used to increase employee retention and productivity. This different
type of compensation is seen in many ways. Therefore, it is important to explore the
different types of compensation to define them, reveal how they are executed, and
how effective they are as opposed to traditional monetary rewards.
Traditional rewards such as money or cash bonuses need little explanation. This type of reward and compensation system is still the most commonly used in the work force today. As a result, employees have come to expect this type of compensation. Therefore, it is usually the starting point of negotiations when a person is considering several opportunities. Employers understand how to execute this system but many do not understand when to execute this system to maximize effectiveness. A study conducted by Accountemps suggests that financial executives (CFOs) prefer cash bonuses to non-monetary rewards. "Forty-three per cent of (CFOs) cited bonuses as the most effective way to acknowledge a job well done." (Cash Still King: Bonuses Best Reward After Major Projects, CFOs Surveyed Say) Non-monetary rewards came in 2nd and 3rd when used for rewards after major projects. The results of this survey should not come as a surprise. Employees expect to be compensated for completing a daunting task. However, the survey does not show how an employer can retain good employees when the budget does not allow for a cash bonus or the employer wants to say thank you for completing a routine task. Non-monetary rewards are excellent for many different reward and recognition programs....