A recent McKinsey Quarterly article, Motivating People: Getting Beyond the Money, takes a look at recent firm research to highlight opportunities for motivating employees with non-financial incentives.
One particular reward stands out first in this discussion. "Attention from leaders" is rated by study respondents as more effective than cash bonuses, base salary increases or stock options (63% rated it as "extremely" or "very" effective, compared with 60%, 52% and 35% for the three types of financial rewards, respectively). It is also reported as relatively under-utilized: only 41% of respondents say it is used "always" or even "most of the time".
As one responding HR Director puts it:
One-on-one meetings between staff and leaders are hugely motivational — they make people feel valued during these difficult times.
Nearly as effective is "Opportunities to lead projects or task forces", with 62% rating it "extremely" or "very" effective. A little over half (54%) of respondents say that this is used to motivate people "always" or "most of the time".
I'd be willing to bet that if you went specifically to top performing employees and asked how motivating these two "non-financials" are, you'd get even higher scores.
Think about it. Leaders, even those with tight budgets and no salary increase dollars, hold the keys to two particularly effective motivators. Not only can they use them to reward and retain their highest performers, but they provide a means of honing that talent and bringing that "up and coming" perspective to critical organizational challenges and initiatives . Talk about your talent management win.
And yet, are we taking full advantage? The research suggests not.
The research shows praise and commendation from managers are still the top desired motivator; however, many companies shut down their more formal praise/recognition programs to cut costs. As companies look to restart recognition programs as the economy recovers, they must communicate very clearly to employees why such programs were cut and why they are being added back now or you risk communicating that recognition is not truly important or valued by leadership. If the old programs were largely cash-based, then a strong communication theme when restarting with a largely non-cash recognition program would be the company’s commitment to much more frequent, more timely, and more personal recognition for all employees (not just the elite to whom bonus and stock programs are typically limited). This effort to make recognition more strategic and behavior-based (on company values) as well as outcome based (achievement of strategic objectives) reinforces those behaviors you most want to see from all employees.
Posted by: Derek Irvine, Globoforce | November 16, 2009 at 08:26 AM