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A Better Motivator Than Money


Posted by Insightlink on 07/16/13

What Is the Secret to Employee Motivation?

A recent study by the McKinsey Group highlights what we've been saying for years. When it comes to motivating employees, financial incentives are not the most effective tool. In survey after survey, we've found that regular recognition and appreciation matters most to employees.

Why is it then that so many organizations fail at this relatively easy (and pretty much free) strategy for motivating and engaging their workforce? It all comes down to ineffective managers who misplace their focus on what means most to their employees or senior management who do not see the need to build and maintain a "culture of recognition."

Here's how the top 3 financial motivators compare to the top 3 non-financial motivators:

Effectiveness of the Leading Financial Incentives

  • Performance-based cash bonuses = 60%
  • Increases in base pay = 52%
  • Stock or stock options = 35%

Effectiveness of the Leading Non-Financial Incentives

  • Praise from immediate supervisor = 67%
  • Attention from leaders = 63%
  • Opportunity to lead projects or task forces = 62%

Together, the leading non-financial incentives are more effective than the leading financial incentives. What does this mean? Although cash-based bonuses have a role to play in motivating your employees, you should not think only in terms of financial reward. Being acknowledged for going above and beyond your usual duties or being asked to take on a leadership role can be extremely powerful motivators. However, these can only be effective if they become part of your organization's DNA.

Would you like to find out what your employees think? Consider a 4Cs Employee Survey to get the skinny. You'll likely discover that implementing recognition programs tailored to your culture will give you way more bang for your buck than any pay raise could achieve. Also, offering your employees mentorship, kudos, recognition and leadership opportunities is a highly effective way of keeping your top performers.

 

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Insightlink Communications are experts in employee survey design, data collection and analysis. Since 2001 we've helped companies of all sizes measure and improve their employee satisfaction and engagement.



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