Emotional salary: what it is, advantages and disadvantages

Emotional salary encompasses a series of benefits that complement the traditional salary offered by companies. These can be family reconciliation...
8 June 2023

Table of contents

Emotional salary: what it is, advantages and disadvantages

Emotional salary encompasses a series of benefits that complement the traditional salary offered by companies. These can be family reconciliation policies, flexible hours, or incentives focused on the psychological well-being of people. 

This subjective dimension is increasingly valued by candidates who are seeking, in addition to a salary adapted to their skills, workplace well-being, and other possibilities for evolution in projects with an inclusive, ethical, and respectful corporate culture. 

It is a necessary paradigm shift to increase the competitiveness of companies. This is why we are going to explain what the emotional salary is. In addition, we will share with you some examples and detail the most significant advantages and disadvantages.

What is Emotional Salary?

The emotional salary is the set of non-economic rewards an employee receives from the company according to their personal, family, and professional needs to creatively incentivize their satisfaction and commitment. 

Emotional salary: what it is, advantages and disadvantages

As a result of this commitment to the worker’s quality of life, the organization’s climate improves, increasing team productivity. In this way, emotional salary becomes an updated complement to the traditional salary. 

This human resources (HR) strategy can be classified into:

  • Intrinsic factors: These are subjective elements such as recognition or satisfaction. 
  • Extrinsic factors: These focus on objective stimuli such as flexible hours or facilities for work-life balance. 

Thus, emotional salary is a paradigm shift in organizations that must continuously seek to improve workers’ quality of life from values such as reciprocity, equity, and continuity, seeking to create a balance between employee expectations and corporate strategic needs.

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Importance of the emotional salary

The importance of the emotional salary lies in the fact that workers’ happiness does not depend solely on the material compensation they receive in exchange for their work. 

These new profiles seek complementary elements such as opportunities focused on professional development or recognition, among many other incentives. 

Integrating emotional salary policies into HR strategies can be a differentiating factor that increases your company’s competitiveness. 

Focusing on employee satisfaction helps improve your employer branding, attracting the most qualified talent. 

This is not surprising since focusing on emotional salary implies a series of notions such as:

  • Quality relationships with immediate supervisors. 
  • Freedom to express ideas, opinions, and suggestions.
  • Promotion opportunities.
  • Professional career development plans.
  • Motivating work environment.

Examples of emotional salary

You can put into practice multiple types of emotional salary, always looking for those that best respond to the needs of your teams and the business strategy.

Professional development

This includes all measures that promote a person’s evolution in your company, such as training, coaching programs, career development plans, progressive increase in responsibilities, etc. 

All these measures and other complementary talent management measures consolidate the relationship between workers and the company, projecting it in the long term.

Work-life balance

Flexible work schemes and telecommuting are some measures you can apply to facilitate your employees’ family reconciliation. 

Likewise, you can offer health insurance that the rest of the family can join or recreational facilities to encourage exchanges outside of work.

The emotional salary is the set of non-economic rewards an employee receives.

Psychological and social well-being

This is an essential dimension in attracting and retaining talent. Recognizing work, offering autonomy to teams, managing stress, and establishing professional challenges are incentives for people and improve their performance. 

Likewise, restaurant tickets, transportation payments, or psychology consultations are facilitating elements that you can include in your emotional salary.

Workplace climate and company culture

The workplace climate is closely linked to people’s satisfaction in their job. 

To achieve this, building a company culture that adopts a work ethic based on respect, active listening, equality, and inclusion is necessary, integrating all participants. 

Similarly, social responsibility is a highly valued factor in any early recruitment process. You can implement volunteering activities, for example.

How to communicate emotional salary to your employees?

Communicating emotional salary to employees requires a thoughtful and proactive approach. Here are some steps to consider:

  1. Analyze the implications: Before communicating the emotional salary policy to your employees, it’s crucial to analyze the potential implications it could have on the company, its culture, and its employees. Identify any potential challenges or misunderstandings and develop a plan to address them.
  1. Involve employees in the process: Involve your employees in the development and implementation of emotional salary policies. Solicit feedback, listen to their concerns, and use their input to refine your policies. This will help to ensure that the policies are aligned with employee needs and expectations.
  1. Be transparent: Clearly communicate the emotional salary policy to all employees, including the rationale behind it, what benefits it includes, and any limitations or expectations. Be transparent and honest about the company’s commitment to emotional salary, and be prepared to answer any questions or concerns that may arise.
  1. Use technology: Technology can be a useful tool for implementing and communicating emotional salary policies. For example, using online platforms can simplify the process of tracking and communicating benefits, and can provide employees with easy access to information about their emotional salary.

Overall, effective communication of emotional salary requires careful planning, transparency, and a commitment to involving employees in the process.

Focusing on the emotional salary helps improve your employer branding.

Benefits and drawbacks of emotional salary

At this point, it is easy to deduce that the benefits of emotional salary are numerous and feed back into each other. At the same time, all strata of the business organization benefit. We list the most significant benefits below:

  • Increase in job satisfaction and motivation.
  • Increase in commitment, reducing the turnover rate.
  • Reduction in levels of stress and absenteeism.
  • Improvement of internal communication and relationships between teams.
  • Decrease in personnel selection expenses.
  • Improvement of the work climate.
  • Development of competitiveness and increase in the value of the company.
  • The attraction of the most qualified profiles.

However, there may be two disadvantages of emotional salary that you should keep in mind:

  1. The company may not have the necessary structure or economic factors to implement an emotional salary policy that meets workers’ expectations.
  2. The employee may confuse emotional salary with a mandatory benefit from the employer.

In that sense, it is necessary to proactively analyze all the implications of this change of values in the company before communicating it so that teams can help build it. 

Technology can be a great ally precisely to simplify processes and launch innovative, dynamic, and respectful evaluations with all candidates within the framework of inclusive and accessible recruitment or training and development programs.

At Smowltech, we have a series of proctoring products specially designed to facilitate the development of ethical evaluations and processes that ensure compliance with the GDPR, FERPA or the CCPA in California. 

Request a free demo to share with you in real-time what kind of solutions we offer and how we can become a technological partner that will drive your strategies.

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