For the past several decades, employee motivation was primarily about raises, promotions and bonuses. Those days are over, and today's employers are quickly learning that engagement stems from different types of incentives - those that impact an employee's emotional, rather than financial, health.
Based on insights from members of the Forbes Coaches Council, here's why traditional incentives may be outdated and what you can do to provide personalized, effective rewards for your team.
Promote ownership first, incentives second
It takes more than incentives to motivate employees over the long term. Lasting engagement occurs when the company culture ensures trust, ownership and performance management. With these three elements built into your leadership style, you've designed a culture in which incentives can be an added benefit to already engaged employees.
Recognition matters more than bonuses
Traditionally, we think of incentives as a payment or concession to drive greater production or investment. Instead, define incentives as something that motivates or encourages someone to do something again and again. The biggest incentive that is both sustainable and economical for a great company is positive recognition. High performing teams give four positive recognition items for every negative.
Incentives must be personalized to be effective
In many cases, people who work in large companies are looking for stability, benefits and perhaps status. Incentives usually work when people are motivated by the economy. If your employees are enjoying the benefits of your company, they will be better incentivized by adding another fantastic benefit. If your employees like status, change their title after they reach certain criteria. Customize their options.
The most powerful incentive has always been meaningful work
The most powerful incentive is and always has been meaningful work. Incentives that are directly tied to the job and desired outcomes keep people motivated throughout the workday, even in the toughest of times, not just at bonus time. Always align mission and meaning with responsibilities.
Learn what your team wants and encourage accordingly
Incentives are always a good way to motivate employees in any size company. It's the type of incentive that makes the difference. Using surveys and focus groups is an effective way to determine what incentives employees want. Providing relevant incentives will be a strong motivation for employees' continued success, and they will appreciate the investment in their overall well-being.
Incentives are a short-term solution to engagement
Incentives are great! They put employees in a good mood and give them something to feel good about. The only problem is that the feeling is fleeting. Incentives that are not work-related, advancement-related and have an impact on the organization are usually a temporary solution. To keep employees engaged, understand individual motivations and incorporate them into the work on a regular basis. This is a real incentive.
Use success, not entitlement
To work effectively, incentives must be transparent and directly tied to measurable action or achievement so they do not become entitlements. Education and training incentives are a great way to reward employees by giving them a break from their daily routines while providing them with the opportunity to improve their expertise, which can boost their career advancement and make them more valuable to the company.
Link incentives to personal intrinsic motivations
Incentives should be tied to employees' intrinsic motivation in any large organization. Link them to helping employees develop mastery, gain autonomy, or have time, resources, and the ability to create an impact they care about. Without these connections, incentives are just about money and the benefits rarely materialize as intended and performance may even decline.
Understanding Shared Values to Create the Most Effective Incentives
Understanding the shared values within your organization and hiring people who also share those values can help companies create effective incentives. You can't please everyone, but if you know that the majority of your employees value things like family, flexible hours or recognition, you can create incentives that motivate individuals and support a strong company culture.
Consider the emotional impact of your incentives
Show me a culture that motivates exclusively with money and I'll show you a 1984 calendar and a Glengarry Glen Ross poster. Yes, financial incentives were extremely popular in the industrial age. In the social age, however, people want to feel aligned with the purpose of the organization. They want to know that their work has meaning. Your incentive plan needs to address these emotional impacts.