23 February 2022

What is emotional pay and what are its advantages?

The emotional wage is the set of benefits that workers obtain from their work and that are not linked to monetary retribution, but to the emotional retribution that the performance of their work brings them. In short, the emotional wage is the set of emotional rewards that a worker receives for his or her work. It is a fundamental factor that all companies must take into account, as a high emotional wage translates into more satisfied workers and, consequently, into a more satisfied workforce. lower turnover and higher talent retention, among many other benefits.

The set of emotional rewards encompasses aspects such as a good working environment, social benefits, flexible working hours, a job perspective that allows the employee to grow and develop professionally, etc.

In many cases a worker's emotional wage is more important than money that they can receive for doing their job. An increasing number of workers are attracted to a company because of its strong and healthy corporate culture, flexible working arrangements or the various social benefits it provides to its employees. This form of employee compensation complements traditional salary concepts, adding emotional aspects which often mean more to an employee than money.

However, emotional pay is not a substitute for a salary, as monetary compensation is the main way in which an employee is compensated for his or her work, but the use of emotional pay is associated with significant benefits, for both the company and the employee.

Advantages of emotional pay for the company

The emotional wage is fundamental for any company, as it is one of the main factors determining worker satisfaction in their jobs. This translates into a very positive impact on the company.

The aim of emotional pay is to meet employees' expectations, linking them emotionally to the company, increased well-being and loyalty with the brand. An emotional salary offers the company a number of key benefits:

Increased commitment and loyalty to the company. When a company invests in emotional salary, it immediately translates into reinforcing a bond that will evolve with reciprocal commitment. A happy employee is loyal to their company, acquiring a full vision and commitment in the development of their tasks.
Low cost. There are times when companies cannot increase their employees' salaries but want to reward them for their good work. In these instances, this option is the best, as it addresses the present need, ensures the positive impact of long-lasting results, and simultaneously helps to attract top talent and improve the employer brand.

Talent attraction and retention. Emotional salary is a highly effective motivational method for attracting top talent to a company. Emotional salary offers an attractive image to generate expectations in future candidates, while also contributing to the retention of better-trained workers with higher productivity rates.
Reducing absenteeism. A happy employee works and performs better. Emotional salaries make workers happy and motivated, improving productivity and performance.
Low staff turnover rates. With satisfied employees, they do not seek to change jobs and, consequently, staff turnover rates decline notably.
Reduction in recruitment and training costs. By not having to find and train new employees, the costs of these activities are considerably reduced.
Higher production rates. All the points we have just discussed translate into higher production indices, which has a positive impact on the company's profits.

Advantages of emotional pay for workers

It is clear that money is the primary way to ensure that an employee of a company receives compensation for their work. However, no one doubts that the importance of emotional pay for an employee and of the benefits that it provides:

Increase in motivation and psychological well-being. When an employee perceives that the company takes care of their personal needs and recognises their work, they feel more valued and motivated, reducing stress and increasing their commitment and motivation.

Reconciliation. Offering flexible working hours or employee benefits such as childcare assistance, the company helps reconciling work and family life, which also increases employee productivity.
Opportunities for personal and professional growth. Sometimes, emotional salary takes the form of opportunities for self-development and training. Training, coaching or the mentoring help employees acquire new skills that foster their development.

Types of emotional wage

As we've just seen, to foster good emotional pay for workers it's necessary to look after their working conditions beyond simple financial remuneration. In other words, it's necessary to foster the happiness and work-life balance of employees in their daily activities.

In many cases, a salary increase is not enough to retain an employee in a job if they are not satisfied with it. Therefore, it is crucial to improve the non-monetary conditions for workers. Let's look at some of the The most commonly used types of emotional salary today:

Flexible schedules. Flexibility in working hours is one of the main factors in increasing the emotional wage of workers, as it allows them to better adapt to other activities and daily needs outside of work.
Telework. It increases employees' adaptability and improves their perception of their own job and the company as a whole.

Career plan. It is fundamental for companies to have a career plan for their employees. These plans motivate workers and increase their emotional salary within the company, which allows for talent retention and an increase in their involvement.
Social benefits. The fact that a company offers certain social benefits is a key element that directly impacts employees' emotional salary. Some of the most common proposals include transport vouchers, restaurant vouchers or nursery vouchers, among others.
Flexible remuneration. Si la empresa no puede invertir más recursos en beneficios sociales, una alternativa es un Flexible Remuneration Plan for workers, allowing them to increase their purchasing power without requiring the company to make an additional financial outlay.
Training programmes. To have continuous training options that allow employees to keep improving their skills.
Occupational health initiatives. For example, courses on eating habits, stress management workshops, agreements with gym discounts, or ergonomic equipment for employees, etc.

Working environment. It is essential that the company has measures that foster a sense of belonging to a group and camaraderie. To this end, activities can be promoted such as teambuilding o have recreational spaces in the office.
Mission, vision and shared values. Corporate Social Responsibility (CSR) is increasingly important when a candidate is deciding between one company and another. One in two professionals would not work for a company with a bad reputation, even if offered a higher salary. If an employee shares the company's philosophy, it will help them feel happier in their role.
Acknowledgements. The fact that superiors know how to value an employee's achievements is essential. This can be achieved with simple actions such as public recognition or with measures like bonuses or incentive trips, for example.

As we have just seen, there are multiple types of emotional salary. This does not mean that a company has to offer all of them, or that the same incentives apply to all workers. Rather, it is ideal for them to be personalised according to each worker and each type of company.

The emotional wage has now become a important resource for companies to improve the well-being of their employees, since the profile of new workers demands certain aspects that financial compensation does not cover.

Companies with a good emotional wage strategy are much best rated on the part of the workers, something that customers also perceive. The salary makes employees go to work, but the emotional wage makes it possible for the employee is committed to the company through purpose, appreciation, autonomy, support, and involvement.

Discover all the possibilities Edenred offers to companies to support their emotional salary policies, which will enable them to have fully satisfied and engaged employees in their various roles. Request information with no obligation.