With the winds of year end appraisals and reviews blowing strong, this time of the year is also ripe for thinking about incentives. What would really urge your team members to show up in their best forms? The norm for motivating, energizing and retaining employees, has been to hand out performance bonuses and salary hikes. Albeit powerful, this practice is beginning to lose its charm in the recent years. Even when employees are given the autonomy to decide their own salaries, research shows that they end up liking their job lesser!
A study published in the Journal of Vocational Behavior shares that money is only marginally related to satisfaction. A dataset of over 15,000 individuals and 115 correlation coefficients concluded that the link between pay and workers’ motivation, is actually independent of how much they get paid. Thus, as you consider the morale and engagement of your team for the year ahead, we invite you think – if not money, then what?
A McKinsey Quarterly survey with over 1050 employees, sought to answer this question. They found that the respondents prefer three non-cash motivators, over financial incentives like cash bonuses or stock options.
- Praise and recommendations from immediate managers on successes, extra initiatives, alignment with organizational values and work ethics.
- Leadership attention in terms of real-time feedback, and in-person conversations like mentoring or even sharing of personal/ inspiring stories.
- An opportunity to lead projects or teams, indicating an investment in growth and display of trust.
Sounds too simple to be true? Blackhawk Engagement Solutions surveyed 1,800 salaried and hourly employed Americans, including nearly 350 Millennials, to arrive at the following conclusions:
Affirmation is the clinching factor. “64% millennials prefer to be recognized for a personal accomplishment, as opposed to a team accomplishment.” They also prefer recognition directly from a manager, versus peer-to-peer or generic company announcements. Majority respondents shared a desire to be rewarded for exceeding personal performance, for receiving a promotion, and for loyalty to the organization in years or organizational vision achievement.
Infact, there couldn’t be a better time to consider such research, owing to the global economic slump. However, if you’re now thinking that money does not motivate, you might be surprised to know that if it’s taken out of the equation, half of the workforce will collapse. This, because our relationship to money is highly personalized. Different people value money for different reasons (as a means to power, freedom, security, or love). So how can you cater to such individualistic needs?
By implementing a mix of both reward and recognition practices. Cho and Perry (2012) show that when people find their work meaningful, impactful and interesting, they focus less on their salary, and more on their contribution. However, if the job-person fit is skewed, and their personalities don’t match the company’s culture, people want higher salaries, without displaying competence. Thus, more than being an annual event, it’s more about the blueprint of the organization. How would you like to design it?