The Power Of Incentives And Rewards

Goal congruence and commitment to the task at hand is hard to achieve day-in and day-out. How can managers motivate a team to constantly fire on all cylinders - even when energy starts to flag?

In a tight labour market, employers must get creative in order to attract and retain quality staff. The salary package alone won't do it. Well structured incentives and rewards programs are increasingly an element in the motivation equation.

Let's be brutally honest. Money talks. The most powerful incentive for the majority of workers is financial - bonus payments, additional employer contributions to superannuation, etc. Well targeted financial incentives have the power to motivate and generate higher output from staff.

The key word here is 'target'. The demographics of each workplace are different. Managers must analyse the profile of their staff and tailor the incentives to suit:

• Mature staff - A worker nearing retirement is more likely to be motivated by additional contributions to superannuation than a bonus payment of which half will be lost in tax. Know your staff. The most powerful incentives are those that hold the maximum value for the individual.
  
  
• Staff with families - The family-oriented employee may not be enticed to achieve productivity goals if the reward is an all-expenses paid holiday to a far-flung destination with colleagues. Workers with young families respond to incentives differently to singles. 
  
  
• Development and training - Investing in the professional development of aspiring employees is also a powerful incentive. Professional development fosters loyalty to an organisation, builds on the talent pool and has taxation and succession benefits for the business. Professional development used as an incentive makes good business sense.
  
  
• Work-life balance - Helping staff find the elusive work-life balance is another strategic tool in the incentive sack. ‘Employers of choice' take proactive steps to help staff manage the competing forces of work and family. These employers recognise the incentive for staff in a workplace with reduced stress levels. They accommodate a degree of flexibility for parents of young children. They allow staff access to greater periods of personal leave. Their ‘lifestyle friendly' policies are a valuable incentive for employees to achieve their goals and remain loyal to the employer.
  
  
• Let's get individual - The message is to understand your staff and know which buttons to push to motivate them. Get creative and really target your incentives to achieve the maximum effect. Tax effective financial rewards will always wield great power. But in the current economic climate, it's the non-financial incentives that can sometimes spark the greatest interest in employees.
  
  
• Security counts - Managers should also bear in mind the power of job security as an implicit incentive. When the employment cycle turns and the skills shortage is finally addressed, the balance of power in the employment market will shift back to employers. Downturns in economic prosperity inevitably create a more productive and less transient workforce.

All content in this article (c) 2008 Kelly Services (Australia) Ltd. Reprinted with permission from the original article at www.smartmanager.com.au
First published: 10 July 2008.
Last updated: 10 July 2008.