When weighing a job, it is possible that the first thing we look at is the salary to be received. But is this the only important thing? Let’s take it to a concrete case: one job may give us 15% more money than another, but the second one grants additional benefits such as flexible hours, day care for children, supplemental health insurance and more. In such a scenario, the decision becomes more complex and it is no longer just the amount of salary that comes into play. 

The second case is precisely what is called emotional pay. Are you interested in knowing about the characteristics of emotional pay, how it can be applied and promoted in a company, as well as its benefits and possible disadvantages? Read on and we will tell you all about it.

Emotional compensation, what is it?

The emotional salary, or also known as emotional pay or emotional retribution, responds precisely to the second case that we commented above: they are those non-economic benefits for the worker, whether personal, family and/or professional.

What is the purpose of this? It aims to improve the quality of life of those who make up a company, with the objective of balancing their work and personal life. You should know that this type of benefits or advantages are not reflected in your salary, since they are not a direct economic payment.

Examples of emotional payment

But how is emotional payment made tangible? Here are some concrete examples: 

• Flexible hours. You don’t need to keep a set schedule, but rather that the work is done. 
• Day care. Having a safe place of care and teaching for the little ones, usually in the workplace or very close to it. 
• Telework. During the Covid-19 pandemic, telework or remote work was introduced out of necessity. But it was more than just a passing thing and if before only a few companies adopted it, or did so on an exceptional basis, it has now become a viable way of working and, above all, highly valued by the new generations.
• Training. Companies help their employees financially to improve their professional skills and further develop their careers. 
• Time off. Having days off, beyond vacations and what is stipulated by law, is something that is practiced at the time of emotional payment, for example, for birthdays, birthdays of family members or at times when it is required to accompany close people who need it. 
• Social benefits. This refers to complementary insurances, help for children’s education and more. 
• Spaces of distraction. The company does not only have to be a place where work is performed, but it can also contemplate spaces for employees to relax and disconnect from work, in their rest time. 
• Volunteering. Helping others pays off in many areas, so organizations promote volunteering among their members as part of the emotional payoff. 
• Recognition. This seems to be “obvious”, but it is not. It is necessary that managers and team leaders, above all, take into account to recognize those who work in the organization with a “very good job”, “I thank you” and “excellent effort” are phrases that are in line with the emotional retribution.

The objectives of emotional pay

One of the main objectives of emotional pay is, above all, to fulfill what employees expect from a company and to make them emotionally attached to it.

This increases their overall well-being and increases their commitment and loyalty, projecting them into the company in the future. And by having more engaged employees, the company can, in turn, more easily achieve its goals.

How to promote emotional pay

You might think that emotional pay is a direct benefit or mostly exclusive to employees. But it is more than that, it is also for companies. That is why it is important for organizations to promote it. 

If employees feel happy in the workplace, there is a lot of benefit to be gained, and the figures show it. For example, Gallup’s State of the Global Workplace notes that while employee engagement fell during the pandemic (in 2020), it is on the rise again, reaching a record 23% in 2022. This means that more workers found their work meaningful and felt connected to their team, managers and employers.

The impact of emotional pay on workers’ lives and performance

According to the OCCMundial labor exchange, emotional pay increases personal productivity by 33%, decreases absenteeism by up to 50% and reduces days lost due to inefficiency by 66%. What does this tell us? That emotional pay has an impact on the overall performance of employees. 

It also has a positive impact on employees’ lives, as they perceive that their personal needs are taken into account, beyond the economic aspect. This makes them feel more valued, which improves not only the quality of work but also the quality of life of those who make up the companies, and helps to achieve a balance between work and personal life.

Disadvantages of emotional pay

While emotional pay has quite a few advantages and benefits, there are also aspects that might not be entirely positive. 

For example, there is the possibility that employees may feel paternalism on the part of employers, it may be considered a habit instead of a benefit, increased costs that should be considered especially in companies that do not have sufficient economic support, the relationship between motivation and productivity may be questionable and should always be under surveillance so that it is executed equally among all employees because otherwise it could generate problems among peers, among others. 
But the emotional salary, beyond the possible disadvantages that could be generated, in general is usually a gain for both workers and companies. Not everything is summarized in the economic salary, but in aspects that go beyond and that aim to have more satisfied and happy employees, and companies that have teams that will produce better if they feel comfortable in the workplace. If you would like to learn more and implement it, you can contact one of our expert consultants.