Monetary recognition involves sending recognition with a tangible reward attached, while non-monetary recognition allows your employees to show appreciation to colleagues without rewards. Here are advantages and disadvantages of each option.
Pros and Cons of Monetary recognition
✅ Rewards give recognition more value- Attaching a reward to recognition makes it more valuable to employees by giving them something tangible to show for their efforts. This can make it a lot more meaningful for them.
✅ More empowering for employees- Giving your people their own recognition budgets can be quite empowering for them. It tells them that you value their opinion and voice, and are prepared to give them the agency to recognize what’s important to them.
✘ You might not be able to give budgets to everybody- While recognition is a relatively low-cost program to implement, large organizations or those with limited funds can find it difficult to give decent budgets to everyone at their organization. You might need to limit your program to just managers and executives, and allocate fairly low budgets to your team.
✘ Limited budget = limited recognition- Even if you give your everyone a budget, they might still not have the funds to recognize everyone they want to recognize! If several of your employees are knocking it out of the park on a regular basis, your managers might find it difficult choosing where to put their budgets.
Pros and Cons of Non-Monetary recognition
✅ Get everyone involved at a low cost- A non-monetary recognition option like Shoutouts makes it possible for you to give everyone at your company the chance to recognize each other for a very low cost.
✅ Unlimited recognition- While monetary recognition programs are limited by budget, there’s no limit to non-monetary recognition. Your team can recognize whoever they want, whenever they want, without having to worry about whether they have enough funds to do so.
✅ Can be supplemented with monetary rewards- Non-monetary recognition can be supplemented with monetary rewards. In Guusto’s Shoutouts feature, for instance, users have the option to recommend a reward amount to their admin when recognizing someone. You can also use the Draw feature to randomly select Shoutouts recipients for spot rewards at team meetings.
✘ Some actions deserve a reward- While non-monetary recognition is fine for celebrating small wins, it’s not necessarily appropriate for recognizing an employee who spent months working on a big project, or a salesperson who just landed a huge client. When an employee does something really special, their recognition should ideally come with some kind of more tangible reward attached.
✘ Harder to maintain participation- In monetary recognition programs, budgets resetting each month or quarter create a natural reminder for people to use the system. With non-monetary recognition, admins often have to do more work to try and maintain consistent participation across their team.
The important thing to remember is that both monetary and non-monetary can have a huge impact on your company culture and help to align, connect, and empower your team. Regardless of the reward involved, having the tools to appreciate their coworkers, and be appreciated in return, will be invaluable for your people.