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The old practice of promoting high performing employees was a cheap way for companies to tackle the employee motivation/ reward/ incentive/ recognition issues. It was doubly cost effective for two reasons. For starters, employers could avoid sharing profits with the high performers who generated more value for the company (keeping larger margins of this value in corporate coffers). They also were able to squeeze more work out of them by saddling them with more and greater responsibilities. |
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But cost effectiveness is not always an effective way of dealing with people. These old practices made a mess of an organization's efforts to motivate, reward, promote, recognize and structure incentives for the contributions employees made to the enterprise. We already know the pitfalls of the old way, so what does the new way look like? |
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The new way is to reward high performing employees with actual rewards and performance incentives, as well as meaningful recognition programs that maximize motivational power. Of course, promotions are not a thing of the past. In this framework, promotions are strategic business decisions that are taken in the best interests of the organization - never to be used for employee motivation. Every promotion made should be a long time in the making. This is why employers must groom their employees to handle the rigors of the future, and their future responsibilities. |
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It is up to the employer and employee together, to make that employee "promotable". To this end, management must motivate each and every member of the workforce to become all that he or she can be. This does not mean motivational talks (a misguided practice that does not improve anything and may actually hurt the employment relationship). What this calls for is an integrated, totally pervasive and rigorous system of employee rewards, incentives and recognition programs that are geared for high-leverage employee motivation. |
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Management must motivate employees through means that bolster teamwork, not that pit employees against one another. The old promotions-as-rewards system focused on individuals and created negative competition between employees. Management must create rewards, incentives and recognition programs that are effective in the context of team-based work structures, because teams are "the basic engine design" for business success in this new millennium. While there is no set recipe for an effective employee motivation, reward, incentive or recognition program in the new context of teams, there are four essential characteristics that should be reflected in some way, in order to achieve maximally effective motivational power. (Intrinsic Motivation) |
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On Motivation, Rewards, Incentives & Recognition
The first characteristic of effective employee motivation programs is that rewards, incentives and recognition are all clearly linked to team outcomes. These outcomes can be goals that the team has achieved, or new skills that they have acquired. In either event, the reward is given to the team as a whole, because it is teamwork that produced the benefit. |
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Of course, there is an exception to this rule. Organizations will still need to reward individuals, but in accordance with the new way, individuals should be rewarded for their work in support of teams. By rewarding teams and the individuals that support them, an organization can eliminate negative internal competition, replacing it instead with accelerating collaboration. |
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The second characteristic of effective employee motivation programs is that they are multi-dimensional. New-style rewards, incentives and employee recognition must consist of a combination of different techniques – pay increases, one-time bonuses, non-cash rewards, and formalized employee recognition and appreciation. |
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The choice of which kind of motivational technique to use depends both on the situation at hand, and on the team or individual that is to receive the reward/ incentive/ recognition. When new skills are proven, pay raises are called for (because the skill is permanent). When goals are achieved or exceeded, one-time bonuses are best (because the benefit is temporary). When the reward is for some extraordinary effort above and beyond the call of duty, some time-off may be better appreciated, or even simply some recognition for a job well done. Oftentimes, an employee who receives a $50 bonus is likely to forget that bonus much sooner than he or she would forget the time the president of the company came out of his or her office to say "thank you" in person. A simple thank-you can sometimes be more effective and certainly cheaper than other motivational techniques. |
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Often, non-cash rewards like monogrammed briefcases or watches can be extremely powerful. Such rewards serve as subtle yet constant reminders to recipients and others about what was accomplished and how it was appreciated. Whatever the case may be, companies must become more creative in the ways in which its members are rewarded and recognized. Remember — creative rewards lead to creative ideas. |
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The third characteristic of effective employee motivation programs is that they are straightforward and transparent. Everyone in the company must readily understand which behaviours are being rewarded. Because of this requirement, rewards work best when they are granted to smaller groups with which the individual team members readily identify. This goes a long way toward ensuring that you are motivating and rewarding definable results. |
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Rewards granted for the catch phrase "exceptional performance" simply do not do enough to encourage the desired behaviours. Another aspect of the straightforwardness and transparency requirements is that rewards should be granted as soon after the desired outcome is achieved, as is possible. This draws a bolder line from the employee’s efforts to the gratitude of the organization. Linking rewards to specific behaviours and accomplishments is the essence of this requirement. |
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The fourth characteristic of effective employee motivation is that it is democratic in some way. The old way was markedly undemocratic. Executives were in line for tremendous rewards, incentives and recognition, while hourly workers were often taken for granted or asked to take pay cuts. We have even witnessed senior executives taking their golden parachutes while massive company retirement plans go down in flames. The decision itself to reward or not to reward was also very undemocratic, in that it was often reserved for one person high up in the chain of command. This sorry state of affairs softens the benefit of employee motivation programs specifically because it leaves employees blinded to the facts about who was rewarded, for what reasons, and by how much. |
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Very few people are motivated by mysteries of this nature. Those who are, are usually only interested in climbing the hierarchy, not in working within a team. The new way is very different. Everyone — be they a senior manager or an hourly worker — is eligible for the same reward. Ideally, everyone is also able to participate in the selection process in some way. Keep in mind, that effective rewards need not necessarily be expensive. Often, the right kind of recognition can be all the reward that is necessary. |
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Ideally, there would be no distinction between the types of rewards that are available to senior executives, and those that are open to deserving hourly workers. Perhaps more importantly, the colleagues and peers of the recipients help to choose them, not only the recipient’s superiors. This system is more democratic and experience has shown it is a far better motivator than the old system, because it treats people as adults, and it gives them a voice. |
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A good, multifaceted motivation program should serve to give all members of an organization a sense of pride and satisfaction. It should encourage everyone to acquire the skills needed by their company and by them in their future roles. It should drive people to rise to new challenges and accept new responsibilities. Most importantly, it should move everyone to work together as teammates, because competition should be reserved for the competition. |
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