Awareness of emotional salary improves organizational productivity

By Arantxa Gonzalez, Meta4 Project Manager

The first time I heard of emotional salary, I thought “They don’t know what else to invent for raises. Instead of a salary raise, let’s raise morale!”

As if it were a constraining, negative and an oversimplified thought, I started to research what this emotional salary was all about and I found an interview with Carmen Povedano of a few years ago. Three statements gave me a pretty good idea, “Compensation is important for anybody, but what is also important is that more and more people (including executives when their basic needs covered) prefer to renounce salary raises (and even promotions) for life work balance between their professional and family lives, and there are companies who are losing talent simply because they do not recognize this.”

Our culture is changing. Of course salary is vital. I know very few people who are privileged to work for fun.

Despite the undeniable importance of this “monetary” salary, society is talking of the work environment, compensation measures, equality, flexibility, teleworking, professional career development, recognition and rewards plans—unthinkable things 15 years ago. Given society is changing, it is also necessary to modify our ideas on work compensation, and that is where the latest buzzword emotional salary comes in. With the purpose of coming to grips with this concept, I jotted down on a piece of paper a list of salary compensation items that go beyond the usual ones, and once I identified (over 100!) and classified them, I had a good bird’s eye view of all the ones companies could use to better reward their employees.

In this scheme, I divided the items into four categories that could possibly be applied in organizations.

Standard compensation: all those items that form part of our salary package over and above the gross salary. These are variable benefits, or some specific ones that companies offer under certain circumstances such as birth, marriage, etc., flexible benefits with fiscal perks…

Social benefits organizations offer their employees: these are direct benefits for them and have either an associated direct/indirect cost for the organization. Typical ones are health, insurance, child education or professional training benefits.

Quality of life benefits: these cover issues around work-life balance. These do not appear in our pay check at the end of the month, but the demand for these are undoubtedly on the rise and valued by employees, often this figures as a “salary increase” even though it is “emotional”. This category includes the benefits the organization offers the employee for work-life balance issues with childcare or dependencies. Flexible hours, reduced hours or teleworking are some of the star attractions of this set.

Lastly, I identified another set of items tied to emotional compensation. Here we can find perks organizations offer their employees. Although in many cases these are rather difficult to quantify, these have an enormous impact on the value of emotional salary. Motivation, work atmosphere, management relations are just a few of these. Much emotional compensation has a total or partial direct cost associated for the organization (free transport, gym, day care, parking, etc.). Unfortunately although employees enjoy these perks, these are not considered as part of emotional salary.

Not all of these are applicable to all organizations, neither can all organizations apply these to their workforces, as each one has their own needs, priorities and even means for implementing them. Some organizations, even if they had many possibilities for improving the emotional benefits for their employees, do not have any kind of emotional salary.

But the organizations that do, it would be a huge step forward if their employees were aware of what emotional salary is and what they are enjoying. I noticed many companies made significant investments in employees that have been undeniably wasted because employees didn’t know that they have these benefits, nor did they value them… until they went to another company that didn’t offer them….

To draw focus on this within our organization, measuring the pulse of the “wellbeing” of our employees and their needs will be vital for choosing the steps to take. And also a suitable communications campaign will make a difference either incorporating or increasing emotional salary successfully.

It is well-established that having more employees “emotionally” compensated translates into organizational advantage—helping to retain talent and increase motivation as well as commitment among employees, leads to improved efficiency and productivity.

Many of the measures discussed do not imply great costs for organizations but certainly cause a huge impact in the balance sheet for employees. Being generous in these difficult times, by incorporating these kinds of measures in our organizations may be the key to successfully overcoming the economic difficulties today.