Monetary benefits meaning
Monetary benefits refer to financial incentives offered by employers to their employees. These rewards, including salary, bonuses, commissions, and allowances, are integral to bolstering an employee's financial well-being. With monetary benefits being a vital part of an employee's overall compensation package, elements like bonuses can contribute to the employee's cost-to-company (CTC), while food vouchers serve as a valued reward.
While non-monetary benefits such as flexible work arrangements, work-life balance, and career growth opportunities are important, monetary benefits play a significant role in employee retention and motivation. A well-structured monetary benefits package can help employers attract and retain top talent, as well as keep employees engaged.
Difference between monetary and non-monetary benefits
Non-monetary benefits refer to the intangible rewards that employers offer to employees, such as flexible work arrangements, career development opportunities, and a positive work environment. These benefits are essential in creating a healthy work-life balance for employees and can contribute to their overall job satisfaction and retention.
On the other hand, monetary benefits refer to the tangible financial rewards that employees receive as part of their compensation package. These benefits are usually in the form of salary, bonuses, and allowances, and play a critical role in employee retention and motivation.
The primary difference between monetary and non-monetary benefits is that the former has a direct impact on an employee's financial well-being, while the latter is more focused on creating a positive work environment and work-life balance for employees.
Top 13 monetary benefits for employees in India
Performance bonus 🌟
A performance bonus is a monetary incentive given to employees for their outstanding performance. These bonuses are usually paid out annually or quarterly and are calculated based on individual or team performance. Performance bonuses are an excellent way to reward and recognize top-performing employees, as well as motivate others to perform better.
Sales commission 💸
Sales commission is a monetary incentive paid to sales professionals for achieving their sales targets. This motivates sales professionals to perform well and helps organizations achieve their sales targets.
Stock options 💹
Stock options are a financial reward given to employees in the form of company stocks/ESOPS. Employees can purchase these stocks at a discounted price, which can provide significant financial returns if the company performs well.
Annual bonus 🤑
An annual bonus is a financial reward given to employees at the end of the financial year. These bonuses are often calculated based on the company's profitability and an employee's contribution to the organization.
Allowances are additional payments made to employees to cover expenses. For example, you can offer a workcation allowance to a team that performs the best.
Gift cards or vouchers 💳
To recognize small wins or show gratitude gift cards and vouchers from Amazon or cool apparel brands can be given.
Home office set up budget 🏠
Remote and hybrid working is common after Covid 19. Companies can offer allowances for employees to set up their home office. This generally includes buying office table, chair, and WiFi. Employees can buy and submit bills to their company to get the money reimbursed.
Tax-saving benefits 💲
You can offer tax-saving employee benefits like food, fuel gadget, telecom, buying car, learning allowance, etc. These help employees who fall in the tax bracket save taxes as structured by the company.
Annual increment 💰
An annual increment is an increase in the employee's basic salary given to them as a reward for their loyalty and contribution to the organization. It is calculated based on their performance and market trends.
Group health insurance 🏥
Group Health insurance (GHI) is a monetary benefit offered to employees to cover their medical expenses. The premium for GHI is paid by the employer. This is generally extended to all employees in an organization.
Travel reimbursement ✈
Travel reimbursement is a monetary benefit given to employees to cover their travel expenses related to work. You can award this to the best-performing employees. You can limit the locations and the amount.
Childcare allowance 👶
Childcare allowance is a payment made to employees to cover the cost of childcare. This can help working parents manage their responsibilities at home and at work. You can also extend your group health insurance to spouse and children of the employees. This way, employees can claim hospitalization expenses of children using the insurance policy.
Read: Maternity benefit act
Leave encashment 💳
Leave encashment allows employees to convert their unused vacation days into cash. This can provide employees with additional income and flexibility. The cap on leave encashment differs state to state and is governed by the company policy.
Monetary benefits keep employees motivated to work and also bring in healthy competition. When you reward employees monetarily, they feel valued and recognized. It is important for HRs to structure monetary benefits that will suit the organization and the employee likings.