What are intangible rewards in the workplace?

Intangible rewards refer to non-material awards provided to an employee that do not have inherent financial value. They are used to recognize and show appreciation for an employee’s efforts and performance. Intangible rewards are usually given in response to a particular achievement by an employee.

Examples of intangible rewards include:

• Public praise from a manager
• Thank you notes
• Praise on social media
• Flexible working hours
• An extra day off
• Letting an employee work a ‘half-day’
• An employee recognition trophy
• A free lunch
• Time for an employee to work on their projects
• Personal development opportunities
• Providing employees with an experience they’d like
• Time-off for volunteering

Benefits of intangible rewards

• Intangible rewards can be given instantly: Intangible rewards are instant and in the moment.
• Creating a significant moment: A company-wide email thanking an employee for their excellent work creates a lasting positive impact on an employee. The employee’s happiness can be more significant than a financial reward.
• Not requiring a lot of money: You don’t need to make a large monetary investment to award intangible rewards.
• Motivating employees: Employees who feel recognized and appreciated by an employer are more likely to feel motivated and work harder.
• Positively impacting employee engagement: Intangible rewards create an environment where employees can engage with each other and build bonds. For example, an employee’s efforts recognized by a company on social media will receive likes and comments on the post from peers. Internal messages and emails may additionally be sent to the employee.
• Improving retention: Employees who feel recognized are likely to remain with the organization longer.

An organization should utilize both intangible and tangible rewards. Providing employees only with intangible rewards can lead to dissatisfaction. Essentially, they are still happy if their efforts are rewarded with tangible incentives.

Intangible rewards constitute a small portion of the overall reward system. Depending on the nature of the work, adaptability, energy, values, and contributions, rewards will be considered to suit each individual's efforts within the organization.