Flexible work schedules are considered a form of nonfinancial compensation because they do not directly increase an employee's monetary earnings. Instead, they offer value through improved work-life balance, increased autonomy, and greater job satisfaction. Nonfinancial compensation can include various perks and benefits that enhance an employee's quality of life, contributing to their overall well-being and job satisfaction without direct financial incentives.

Reference

Managing Human Capital Textbook

'Strategic Compensation: A Human Resource Management Approach' by Joseph J. Martocchio

SHRM (Society for Human Resource Management) guidelines on nonfinancial compensation