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Nonmonetary Benefits in the Workplace

By: Janice Bandick

Published On: January 13, 2015

Nonmonetary employee benefits are a form of rewards offered by employers that provide employees with a personal benefit other than financial gain. These benefits, also termed as ‘fringe benefits’ or ‘employee perks,’ fall under a broad category of rewards referred to as work/life programs.

At the root of nonmonetary benefits is the movement for both employers and employees towards work-life balance. Lambert (2000) suggests that the introduction of nonmonetary benefits began as a “practical response to women in the work force”. However, upon introduction of this type of benefits, companies saw increased levels of employee commitment to the organization. As a result, benefits that strive to create work-life balance for employees were seen as beneficial to the organization and its productivity.

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Even during the recent economic downturn, the trend towards achieving work-life balance and the subsequent introduction of nonmonetary benefits has continued. Companies have found that introducing these benefits contributes to enhanced employee retention, and has a significant impact on morale and stress levels in the organization, particularly relative to the cost incurred by the company. Additionally, the Globe and Mail recognizes the importance of nonmonetary benefits in distinguishing organizations from one another, using companies’ “perks for employees” as a measure for ranking the top 100 employers in Canada (Globe and Mail, 2013).

The effectiveness of nonmonetary benefit programs has been demonstrated in numerous studies, all of which suggest that nonmonetary benefits are more effective than cash in building long-term employee engagement. Financial rewards mainly generate short-term boosts of energy, which can have damaging long-term consequences. Research shows that nonmonetary benefits are appropriate for use in organizations of all sizes. Ideally, nonmonetary benefits should be used in conjunction with one another and with regard to the organization’s demographics.

There is a wide-range of nonmonetary benefits that companies can use as a part of their total rewards package for employees. Some examples include:

  • Subsidized on-site daycare
  • Reduced hours on Fridays
  • Dry cleaning valet service
  • Tuition subsidies
  • Mentoring programs
  • Career-planning services
  • Travel bonuses
  • Flexible work schedules

Employees nearing retirement age tend to value the opportunity to continue to work part time on a flexible schedule after retirement. Younger employees are more likely to prefer feedback from management, as well as career development opportunities. An option for employees in between these ages is to provide retirement planning assistance and the ability to take a sabbatical. Flexible scheduling options tend to be popular with both older and younger workers.

Things to Consider before Implementing a Nonmonetary Benefits Program

With the introduction of nonmonetary benefits comes the risk that these programs will be incorrectly implemented, resulting in dollars spent with no discernible results. Nonmonetary factors can be used to achieve a higher level of employee satisfaction without any changes to the monetary factors, however, this does not mean that nonmonetary benefits should be considered a substitute for paying a fair wage. It is once the basic needs (competitive salary, health benefits, and a safe work environment) are met that other intrinsic variables begin to take on greater importance.

Organizations who do not offer popular nonmonetary benefits such as onsite daycare facilities may find their applicant pool shrinking and their rates of turnover increasing. Organizations must also continually monitor the effectiveness of their benefit programs by introducing the proper metrics to ensure they are achieving the intended goals. Such measures could include anonymous employee surveys, and the monitoring of productivity and voluntary turnover rates.


Globe and Mail. (2013, October 8). A Special Information Feature: Canada's Top 100 Employers 2014. The Globe and Mail. Retrieved January 12, 2015 from: http://www.theglobeandmail.com/partners/advtop100employers1013/canadas-top-100-employers-2014/article14930216/

Lambert, S. J. (2000). Added benefits: the link between workÔÇÉlife benefits and organizational citizenship behavior. Academy of Management Journal, 43, 801ÔÇÉ815.


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