Why organizations provide both monetary and non-monetary benefits is to keep employees motivated. According to Maslow’s Theory basic needs are at the bottom of the pyramid. These are the basic things that motivate employees. For example, food, clothes, shelter among other things.
This is because these basic things require money and thus organizations provide monetary benefits like salary and bonuses to their employees to enable them to acquire these basic needs.
But, when these basic motivators are met employees look for other things for motivation. This make organizations to give employees non-monetary benefits like medical covers, retirement plans, flexible working hours, family programs and so forth (Skilbeck, 2019).
It is good to note that monetary benefits are entitlements. For example, salary. Every employee must be paid for the services given. The employer has an obligation to pay.
But, non-monetary benefits, also called discretionary benefits, are benefits that employers give to their employees but are not obliged to do so. At times employees think these benefits are their entitlement but they are not. They are meant to motivate employees.
But it good to note that some are given by the employer to caution future huge costs. For example, health and wellness programs. The employer wants to ensure the employees are heathy so as to reduce absenteeism due to sickness.
