Time to Startup!

The BizFilings blog covering business tips and trends.

Three Incentives that Actually Work

Published on Feb 1, 2011

Summary

Read 'Three Incentives that Actually Work' at 'Time to Start Up,' the small business blog by BizFilings.
Employee EngagementEmployee engagement is very much on the minds of business leaders at all levels today. And well it should be, whether you are starting a business or bringing it to the next level, having an engaged team is paramount for success. Because they have a sense of shared interest in the company, employees who are actively engaged are the ones who keep an organization moving forward. Reports from Towers Perrin and the Hay Group indicate that engaged employees believe they can positively impact the quality of the organization itself as well as the lives of the customers they serve and are more willing to give the time and effort required to help the company succeed. Given the importance of engagement, the 2011 Employee Engagement Report issued by BlessingWhite isn't encouraging. Just 31 percent of respondents to that survey qualified as "engaged." Employers who have registered the vital importance of employee engagement are scrambling to create that connection with their employees. But many are stopped in their tracks by the mistaken belief that increased pay is necessary to motivate workers to the highest levels of productivity and engagement. But it just isn't true. According to 2010 study at MIT, if a job requires any level of creativity and thought, money isn't the main motivator. It isn't even in the top three. The study affirms the idea that you must pay a fair wage, but increasing pay after that point doesn't increase productivity and engagement. In fact, for all jobs beyond rote manual labor, it can do the opposite. So what does work? It turns out that the more effective incentives are intrinsic rather than extrinsic motivators—specifically purpose, mastery, and autonomy. 1. Purpose If your intention is to inspire employees to care about the company and to tie their destiny to it, telling them that their efforts are all about winning an additional 2 percent of market share from your competitor, there's not much for them to hang their hats on. Such a goal does not encourage someone to pour his or her heart into the work. But imagine instead that the job is about improving lives, bringing families together, or reducing fear or loneliness? Suddenly the heart is involved, and productivity and engagement can soar. The more you can connect work to a sense of purpose, the more purposeful and meaningful it becomes, and the more the employee connects and engages with the enterprise. 2. Mastery Mastery refers to marked self-improvement. And the MIT study clearly indicates that once a fair wage is reached, opportunities for mastery are more important to engagement than additional money. Training for mastery reframes skill building as personal development. The language and approach used should underline the employee's awareness that he or she is getting better, not just the skill. It's the difference between saying, "We improved our production numbers last year" and saying, "You came a long way as a contributor to the team last year!" Best of all, this kind of reframing doesn't have to cost a dime. 3. Autonomy Oversight is part of a good process, but every step a manager can take to give employees a feeling of trusted autonomy will go a long way toward increased engagement. Take a few extra minutes to be sure instructions are clear enough for a given project, then give the employee space to feel some autonomous ownership of his or her work. What are some innovative incentives or ideas you've implemented to motivate your team? Business Blogs blog