“Show me the money” is a familiar battle cry of overworked/underpaid workers. But mounting evidence suggests that the most effective incentive plans stress personal validation over compensation.
Studies by top research firms such as Gallup, Towers Perrin, and the Corporate Leadership Council reveal that the connection employees feel with their companies wield the greatest influence on the effort they put into their work. Major performance drivers include:
- Trust and integrity – How well managers communicate and then walk the talk are key builders of confidence and morale.
- Link between employee and company performance – Understanding how their work contributes to the organization’s performance fosters a greater sense of responsibility and importance.
- Pride about the company – How much self-esteem does the employee feel by being associated with his or her company?
- Coworkers/team members – Positive camaraderie is essential in reducing turnover, improving motivation and boosting productivity. Relationships with coworkers significantly influence an employee’s level of engagement.
- Relationship with managers – Does the employee feel comfortable, supported and encouraged in his or her relationship with a supervisor?
As the focus has moved from the organizational to the human, the contemporary version of an employee incentive plan has more to do with shared values than dollars. Enlightened companies have taken note, shifting their motivational emphasis from wholly monetary rewards to a more holistic mix of emotional and professional reinforcements.
In a reward system that promotes employee engagement, recognition is available, frequent, and commends actions that are truly worthy of special note. Effective displays of appreciation always involve verbal or written acknowledgement from the employee’s manager in addition to any physical reward supplied.
The downside of the annual employee performance appraisal is that it is a one-shot deal. Constructive performance feedback takes place every day, or at minimum, every week for employees who need less interaction with their managers. Feedback focuses on what the employee is doing well and what needs improvement. It is clear and specific and reinforces the actions that the manager wants to see repeated on a regular basis.
In a company that gets high employee buy-in, consistent communication is king. There is no such thing as insignificant information or operating on a need to know basis. In fact, letting people gain awareness and understanding of items that fall outside of their direct area of responsibility gives them a sense of belonging and even greater ownership of the company’s success.
Supervisors who consistently extend respect, trust, and positive reinforcement to their employees can send motivation levels soaring. Managers who relate effectively with employees, who show that they are personally interested in and care about them, and who elicit input and opinions, create a reciprocal outlay of loyalty and hard work.
While the potential to increase earnings with a raise or bonus will always have its place as an employee incentive, the new paradigm is to also create meaningful partnerships between companies and the people who fulfill their missions.
Take the steps to make it clear that you value your employees as professionals and individuals. Your investment can generate the extra effort and enthusiasm that keeps paying dividends in above-and-beyond performance and bottom-line results.