Emotional pay is made up of motivational incentives that a company offers to attract and retain talent, as well as drive them to their peak performance. It is a supplement to the monetary salary. Emotional Salary
What do you know about emotional pay? We are not talking about something that replaces fair pay, but that can work as a complementary and motivating factor for employees.
It has been a while since the market began to understand that remuneration is not the only or the main factor for a professional to choose a company and pursue a career within it.
Therefore, HRs have been mobilized to add value, even if not monetary, to the employees’ experience. Something that leads us to talk about what emotional salary is, what reflections are needed and how to implement it.
What is Emotional Salary?
Emotional salary is the set of motivational incentives that the company offers to employees that goes beyond monetary salary .
We talk about things that range from creating a favorable environment to the feeling of belonging to development courses, for example.
Each company, based on HR assessments, will define what will make up this emotional salary.
The definition must take into account, among other factors, the profile and expectations of employees.
In any case, three crucial points need to be made clear right now:
- the emotional salary is a resource to attract and retain the company’s talents ;
- emotional salary does not replace monetary salary and cannot be understood as a justification for inadequate remuneration;
- Emotional pay should not be confused with benefits that employers are required by law to provide to employees.
Emotional salary and GNH
Our conversation about what emotional salary is can get even more interesting if you learn about the GNH or Gross National Happiness Index.
The GNH emerged as a performance indicator in Bhutan. The precursors of this idea understood that there are other factors, in addition to the financial linked to GDP, that influence a society.
To measure not only quantitative, but qualitative aspects, the GNH is based on nine variables:
- psychological well-being ;
- use of time;
- community vitality;
- education ;
- life standard.
Although Brazil has not yet adopted the GNH, companies have already begun to realize the importance of other factors for the happiness of their employees.
The idea behind the emotional salary is linked to the GNH and the understanding that it is necessary to offer more than a good monetary salary to workers.
The importance of emotional pay
Before you even started reading this post, chances are you already knew that money salary is no longer the most important factor for workers .
Understanding why will help you understand the importance of emotional salary in companies, something that goes through the need to value human capital.
Ever wondered why employees quit? Research shows that 8 out of 10 workers quit because of their boss. Here are the top three reasons:
- feeling that the boss does not lead by example and, therefore, is not an inspiration for everyday life;
- lack of professional growth;
- lack of feedback for professional development.
Notice how money doesn’t appear among the main justifications for a contract termination request?
This shows that emotional pay contributes to retaining talent and reducing employee turnover. Every company knows how decisive this can be for success.
There is no doubt that the financial side is important. However, sometimes, money does not compensate for situations that disfavor the nine variables linked to GNH.
If employees constantly have to work overtime, don’t have good leadership, and are always overworked, they don’t experience psychological well-being.
Community vitality, which concerns interaction, can be affected with this bad climate and not conducive to friendly relationships.
Consequently, the mental and physical health of employees can suffer setbacks, and so on.
All the factors for happiness, which have other ramifications, can be undermined in such a situation.
In short, emotional pay is important because it creates better working conditions, favoring both employees and the company.
The benefits of emotional salary for your company
At this point, we’ve already shared with you some of the benefits of emotional salary for companies, but there are more topics to be noted. Check out!
Improvement of the organizational climate
Among the motivational incentives that make up the emotional salary are those that help to improve the organizational climate .
The way each employee interacts with the environment and with colleagues is considered by companies that adopt this concept.
Talent attraction and retention
Taking care of human capital in addition to a good remuneration is to make the company a place where people want to work.
This favors the employer brand and influences not only the attraction, but the retention of talent.
A more positive work environment conducive to professional development helps reduce turnover.
When the company has the right environment, builds a strong team and chooses the right motivational incentives, it improves the well-being and satisfaction of its employees.
This combination of results also promotes increased motivation and improved productivity.
These factors are directly linked to success in meeting the goals of any business.
A company that deals with lower turnover and higher productivity is able to make better use of its resources.
By resources, we consider from human capital to financial capital.
The main examples of emotional salary
So that the benefits are clearer to you, we have separated some examples of emotional salary that your company can adopt.
Before, we remind you that there is no cake recipe here. As we mentioned, it is necessary to consider the profile of the employees and the values of the organization itself to define the composition of the emotional salary.
So take our examples as a starting point, but critically analyze them and, if necessary, seek or develop other options for your company.
Remember that lack of professional growth appears among the main reasons for resignation?
Well then. There are different factors behind this problem, and the lack of perspectives within the organization is one of them.
The career plan serves precisely to create perspectives and show that the company has plans to continue with the employee and see him or her grow .
This plan is an instrument for the organization of goals and paths that project the evolution of a professional in a company or in his career.
Therefore, creating a career plan is a way to offer employees an emotional salary.
To grow within the company or professionally, the employee needs to develop.
HR can articulate this development in different ways and it is with this fact that the conversation about internal training begins.
We are talking about a reality in which the company provides the tools and all the necessary knowledge for professionals to constantly develop .
Among the advantages of adopting this emotional salary strategy, we highlight:
- rely on increasingly qualified professionals, which leads to better results;
- to help employees achieve their professional development goals;
- reduce the need to seek new talent in the market.
Flexibility at work
Flexibility at work boils down to alternatives that allow employees to establish their own schedules and routine of activities .
Creating an alternative to the standard 8 am to 6 pm schedule can make a big difference in a professional’s life.
Some would like to have that flexibility to take their children to and from school, and others simply feel that they work well at other times.
Giving more freedom to negotiate the working day is a way of offering an emotional salary consistent with new management models and the profile of new professionals.
Speaking of flexibility, the home office comes into play when it comes to an example of emotional salary.
In 2020, working from home has become a reality for many professionals, but this idea had already been gaining momentum years before.
The trend that was allied to an urgent need for change ended up opening more space for the hybrid work model .
In it, part of the journey is carried out at the company’s headquarters and another part in the home office, and it is the company itself, in agreement with the employees, that defines this dynamic.
In addition to what the labor law determines, companies can offer benefits to their employees.
The point is that, in order to have the expected motivating effect, these benefits need to be aligned with the profile of each employee in the organization and evolve along with them.
Managing benefits is nothing more than strategically managing what the company offers to workers in order to really generate value for them.
A single employee may prefer a gym voucher while an employee who is a family man may prefer a more robust health plan.
Attention to the interests of each one, within the possibilities of the company, counts as a valuable emotional salary.
A company, through its HR, must promote integration actions among the members of a team. This is critical for organizational climate and productivity.
In addition, however, it needs to invest in the development of individualized relationships. People with different profiles need different approaches .
Perhaps this was made clear by what we explained about benefits management, but it is important to look ahead.
The form of communication and motivation can change from one professional to another. Leaders need to be prepared to meet this demand, always relying on the guidance of HR.
The value of emotional salary
Wondering how much implementing this concept might cost your organization? Or how much is emotional pay worth to employees?
There are those who say that the emotional salary “is worth more than money” . Perhaps this speech has to do with the fact that people, sooner or later, give up a job that pays well if the working conditions are not positive.
It turns out that this value is difficult to calculate, although it is possible to perceive it when analyzing the company’s results.
Initially, to implement motivational initiatives, your company may need to invest money. The cost will vary based on the strategies adopted.
Over time, however, a return on investment can be realized, especially if your company is careful to define metrics and indicators.
As an example, let’s cite high turnover or high turnover . We are talking about a situation that costs an organization dearly.
There are severance pay to be paid and a whole investment in new hires and training.
If your company chooses well to compose the emotional salary, it will reduce turnover and, at the same time, increase productivity. Do you perceive the existence of the possibility of a real financial gain?
So maybe your company can, in fact, calculate the value of the emotional salary. In the end, what should be clearer is that this value goes beyond monetary.
With that in mind, we just need to point out one more time: emotional pay may be worth more than money, but it’s not a substitute for good pay.
How to apply emotional salary in your company
After all that, it’s time to tell you how to implement emotional salary in your company.
The following are some strategies your organization should follow. Follow up!
Opening up to innovative management
Based on the emotional salary examples, you may have already realized that conservative management would not be able to implement the concept .
With this in mind, it may be that the first step of HR is to show top management the reasons to embrace innovation in the management of the company and human capital.
This is important for the organization to really leave behind the idea that the monetary salary should be enough to motivate the employees.
Reshape organizational culture
The implementation of the emotional salary involves placing human capital at the center of the company’s strategies.
The organizational culture must be aligned with this idea so that the choice and adoption of motivational incentives work properly.
A company where distrust or lack of transparency prevails will not be able to embrace a hybrid work model, for example.
Invest in a positive environment
HR can adopt different strategies and guide leaders to improve the work environment.
This has to do with optimizing communication, developing interpersonal relationships and teamwork, and also with the relationship between employees and the company.
Betting on diversity and inclusion strategies , for example, can create a more favorable climate for the well-being of employees.
Analyze profiles and demands
To understand what constitutes a valuable emotional salary for the workforce, the company needs to do a profile and demand analysis.
Understand that changes don’t have to be implemented all at once. A climate assessment can help identify the priorities that the organization needs to work on to add value to the emotional salary gradually.
Bet on constant improvement
Emotional salary may even follow the nine variables of the FIP, but it is always tied to what is valuable to people and money.
This means that, over time, the demands of employees – and the company itself – can change. The market and its practices can evolve .
For this reason, the emotional salary needs to be reviewed and improved so that it has the expected effects and is adequate to the reality of professionals and the organization.
Best practices for emotional salary
To reap the benefits of emotional pay, your company can rely on some other tips on how to implement this concept.
Let’s call these tips best practices. Check it out!
- Do not “sell” the idea of emotional salary as something capable of compensating for monetary salary or the lack of a good compensation policy in the company.
Doing so risks alienating talent in the selection processes and increasing employee turnover.
Currently, some companies highlight the emotional salary in posts on social networks or even in the advertising of vacancies. That’s not the problem.
Emotional pay tends to be welcomed if it is not presented as something that will compensate for a demanding list of requirements accompanied by inconsistent pay.
- Choose rewards that favor the development of professionals and the company as a whole.
In some cases, companies that sell the idea of emotional salary to compensate for compensation have less strategic benefits.
Sometimes, these are issues that attract attention at first, but that do not actually favor the development of professionals.
There is little point in having a video game in the company if, due to bad management or bad governance, employees are unhappy and/or overworked.
Also, keep in mind that the development we are talking about here has to do with the professional side, with internal training, but also with the emotional side.
- Don’t let emotional pay become a “crutch” for employees or the company.
Emotional pay can create a very comfortable situation for the parties. Therefore, attention is needed to align it with the performance and expected achievements.
If the company does not closely monitor the application and effects of this salary, it could end up seeing its employees go from motivated to unmotivated.
In other words, if emotional pay ceases to make sense, it will seem like a simple way of pretending to offer a benefit to workers. Something that can negatively impact them.
Still, all being well, the company cannot rely on the emotional salary to stop reviewing issues that need to be changed in its internal dynamics.
The idea, therefore, is not to use this salary to postpone decisions that meet the demands of employees and that are necessary for the organization.