Emotional salary – it’s not all about money!

“Kudos! Thank you for going above and beyond to reach our important goals!”, “Sure, it is fine that you start and finish work earlier to get your children from kindergarten!” or “We are happy to support you in your new studies!”

These are things we hear more often at work these days. And these are also the things that most employees highly value and which increases their motivation to deliver better results. The times, where money was the only determinative factor when choosing the place to work, are gone. It is still important, but it is not the only motivation anymore (rather its absence creates demotivation).  Employees, especially millennials and Gen Z (which already represent more than 1/3 of workforce), are putting higher value on non-monetary benefits, such as feeling appreciated and valued , having freedom of managing own working schedule and style, and being able to create a fulfilling career while developing own talents and skills.

This brings us to the concept of Emotional Salary.

What exactly is Emotional Salary?

Interestingly, the word “emotions” did not exist in the English language before early 17th century and its studies began only early 19th century initiated by Scottish philosopher Thomas Brown. After numerous researches, what is certain among professors is that there is no one definition of emotion as it is hard to state in words. Nevertheless, our bodies are hardwired to feel emotions – whether we express them or not is our choice. As you now read words “happiness” or “sadness”, most probably you have association with these feelings at the same time.

And when we think in context of work – it is related to one’s emotions and the close connection they feel to the company. Emotional salary complements monetary salary received in the bank account and is more focused on the employee’s loyalty ensuring satisfaction and motivation. It is something, employees’ value more than money. Such as work fulfilment, autonomy, recognition and health insurance.  The aim of emotional salary is making your employees feel happier, as well as more motivated.

Why Emotional Salary is becoming increasingly important

Today’s society is not what it used to be before. Employees’ needs and values change. One of main reasons for the companies to add emotional salary to their remuneration policies is millennial generation appearance in work. Deloitte study found that nearly half of millennials plan to leave a job within two years. While salary is the expected explanation for the frequent company switches, it turns out other factors also play a part in influencing millennial decision-making and the notion that money buys commitment among millennials is false.

At the same time if it has not happened already, then soon millennials are set to make up more than half of your workplace. Equipped with the fresh knowledge and energy, they are the new talent which is needed for the companies to perform at its best. So, having the right motivation for the new employees in place is crucial for the company to remain in the business.

All those companies that have been able to rise to these new demands are today the preferred companies to work for the new generations and an example of what must be done to join them.

Now that we have concluded that raising salary itself will not necessarily increase motivation and sometimes even is not possible, how we can find the right balance between monetary and emotional salary and what to look for?

How to know if the organization is on track with Emotional Salary?

The usual questions are – how do I understand my current situation? How can I improve it? Will it cost me a fortune? When and how can I notice any improvements?

One simple way to start is to take a pen and a piece of paper and write down all the emotional benefits company offers. For example, giving 2 additional days of vacation for parents of young children or proving a health insurance.

Look at your list – is there any way you can get more of the things you have listed? Give a score out of 10 for each item of the list. Look at the 3 lowest scores and think of 3 things you can do to increase the scores. Discuss and compare it with other colleagues to validate your view and decide on next steps. It is important to do review of results and make a reflection once reasonable time has passed. It is a continuous process.

In everyday life just talk and listen more to your employees. You might hear either openly or through the words what are the things they value, and which do not. It should be noted that two people doing the same job in the same organization with the same manager for the same pay will value different things, so their Emotional Salary will not be the same. Accordingly, Emotional Salary varies with time.

We spend most of our time working, it’s important that we feel happy with the work we do. Gaining an awareness of Emotional Salary is an essential part of this. Once we have identified what is important, we can take action to get more of what we value, increase our Emotional Salary and make our workplace a happier place.

Some examples of Emotional Salary

  • Simple words

Human relationships are fundamental in a work environment, the recognition given by the boss for a good job such as “thank you”, “you did a good job” etc. is a positive feedback that makes an employee feel recognized and valued. The current time of remote working era adds a lot of stress to the employees and it is easy to feel distant. A simple recognition will make a huge impact.

  • Flexible schedules

With too many things on the plates, keeping work-life balance is hard. Especially when being squeezed in specific timeframes that add additional stress. Flexible working hours improve productivity because you allow employees to adapt to the best schedule for them, so, they can pick their children at kindergarten, plan their important life events or sometimes sleep a little more to start work with more energy.

  • Professional growth

Ensuring constant learning is important for employees’ personal growth. By providing access to professional training and helping to

get it with low or no extra cost for the employee, will motivate them learn new and develop existing skills. Overall, it positively impacts employees’ personal life, career growth and their abilities. And it translates into positive impact on your company’s results.

  • Custom compensation

As different employees have different needs, a custom compensation allows employees to choose from the services offered by the company, based on their needs. For example, having annual bonus points they can spend on getting discounts for buying company’s products, getting specific outside services for free or even donating to charity.

  • Social Benefits

Health care is one of the best ways to ensure feeling secure, so employees can have less stress when something bad happens, which also helps to recover faster. Additionally, you may add support of different consultants, such as, psychotherapists, if such need occurs. Employees feel appreciated that employer is thinking about their wellbeing.

This list could go on and on. All of them are legitimate and meaningful as long as they respond to real needs of the employees.

Employee happiness is no longer solely dependent on the amount of money a company can offer. Everything that brings quality and future to the professional life is valuable. A monetary increase of 100 dollars/month won`t be as tempting when deciding to leave work. Especially for young employees, they have seen the excess work in their elders and do not want to recreate the same lifestyle.

Social contacts and fun are as important as usual working routine. Employees no longer aspire to do a job, but to participate in the evolution of the company and society in general.

The highest salary will never be equal to the value of time, feeling valued and a better quality of life.


Reis, T.A., et al. Emotional Salary As A Strategy To Retain Talents, http://www.iosrjournals.org/iosr-jhss/papers/Vol.%2023%20Issue1/Version-3/H2301037480.pdf

Tomàs, A. Emotional salary (sometimes money is not enough), https://factorialhr.com/blog/emotional-salary-employee-happiness/