Companies Use Pay Alternatives to Keep Employees Around

It always seems as if one company tries to be progressive in terms of it’s compensation strategy, it shakes things up for the rest of the business world. One such company is Twitter. Twitter recently announced that it would be releasing previously unreleased stock shares to the employee pool. This comes on the heels of somewhat stagnant growth and the company’s efforts to retain key employees with generous bonuses.

Non-salary incentives – the future of comp?

The question that’s on many people’s minds is “Are non-salary incentives the wave of the future?” After all, in just the last year, a number of companies have put their focus on bolstering compensation programs with other attractive perks. For example, Netflix, Microsoft, and Adobe Systems all drastically extended their paid time off policies for new parents. Other companies have turned to voluntary benefits, corporate wellness programs, and flexible/ work at home options to remain competitive.

The 2016 PayScale Compensation Best Practices report, indicates that last year nearly 90 percent of top performing companies issued pay raises, while 84 percent of average companies gave raises. But, to dig deeper, only 14 percent of these companies issued salary increases in the 6-10 percent range. Most either stuck to raises that fell below 5 percent, or they may have offered other types of incentives to keep employees on board and engaged.

Pros and cons of Non-cash incentives

One could say that the use of non-cash incentives to retain employees can work in certain types of businesses and can appeal to a certain type of employee. Here’s a breakdown of the pros and cons of using non-salary based incentives, so you can decide for yourself the best course of action for your organization:


  • Easy to track and manage
  • Can be issued at regular intervals or on-the-spot as performance rewards
  • Appeals to employees who are not concerned about salary
  • More flexible way of managing incentives for different reasons


  • Don’t work well for employees who are in need of better pay
  • Hard to ensure that perks are doled out fairly to all employees
  • Difficult to allocate the right bonus to the right performance metric
  • Smaller companies may not have access to enough perks

In your own compensation strategy, we hope that you select the best cash or non-cash compensation options that honor the needs of your people. Sometimes, a brief survey to find out what may be a good option before rolling it out can make the best sense.

What do you think?

Is your company using non-cash perks to incentivize the workplace? How is this working out?