Not all people are motivated by money.
Some business owners don't understand this because most business owners are motivated by money and wealth attainment. Because financial incentives work for them, they assume that cash rewards are the most motivating "carrot" available to them. So they offer cash bonuses for attendance, cash bonuses for safety performance, cash bonuses for productivity, etc.
These incentives can work extremely well when the employee is also motivated by money. Unfortunately, not all employees are. Some would happily forego a bonus or an overtime assignment in order to be home with the family or spend time doing their favorite hobby.
Rewards of any kind can have 3 possible outcomes: they can produce more of the behavior your want; they can have no effect on outcomes at all; or they can backfire and produce behaviors you didn't anticipate and don't want.
An example of this last outcome might occur when a company rewards customer service reps on preventing cancellations. The behavior the company desires is for the CSR to help the customer realize that staying a customer is the better choice. But some CSRs might discover that being rude, evasive and throwing up barriers that make it difficult for customers to cancel might achieve the same result (in the context of their reward system). If the customer hangs up in disgust and cancels service on-line or by calling back later, the first CSR has protected his/her performance metric at the expense of the the company's reputation.
An example of a reward having no effect at all on outcomes might include safety bonuses in an organization that already has a strong safety culture, provides thorough safety training and addresses safety issues quickly and decisively. Paying out a modest monthly or quarterly safety bonus that is virtually always earned may have negligible actual impact on the employee's behaviors or the organization's safety record.
When implementing monetary rewards, review them to make sure that the pay-for-performance structure rewards the behaviors you want without causing unintended unhealthy behaviors. But more importantly, don't forget other categories of rewards that might be even more valuable to the employee, such as:
- Time off with pay. This is one of the most requested benefits and one that is often forgotten by management. "You did a great job on that project, take Friday afternoon off." This may have more impact for a lower cost than the cash bonus you were planning on paying for the same performance.
- Training and Development. "You've been doing a great job. We want to send you to earn your XYZ certification." What an ego boost this might be to an employee who wants to grow.
- Praise and Recognition. A McKinsey survey of over 1,000 executives showed that three non-cash motivators (praise from immediate managers, one-on-one conversations with organization leaders, and the opportunity to lead committees and task forces) scored as high or higher than the three highest rated financial incentives (bonuses, increased pay and stock options). So don't forget to say "thanks" a little more often and take an employee or two to lunch occasionally and listen to their feedback.
The bottom line is, know your employees. And offer a variety of rewards that meet the needs of individuals. And don't assume everyone is motivated by the same things you are. If you really want to know what motivates your key people, have them take a Driving Forces assessment. Contact me for more information.
Thanks Mark - things often forgotten for sure. I am one that is not overly motivated by money. I had a manager that didn't understand this. I am much more motivated by praise and recognition. His use of money and negative reinforcement acted to demotivate me. This was a major obstacle between us.
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