The right employee incentive: recognition, cash or promotion?
Find the sweet spot
Motivating your employees is tough, not least because everybody is different and by nature, they need unique motivations. Figuring out the right incentives to keep your employees is vital to getting the most out of them and generating higher profits.
Incentivizing your employees to ensure that they are constantly fully motivated is vital not only to have a fully functioning business but to maintain your long-term profitability.
What motivates employees?
Figure out what types of incentives result in the motivation that you seek. There are conflicting opinions on this, not least because the research shows that different incentives work depending on the type of job and the employee's personality. We do know from extensive studies that cash, morale, ego and group rewards tend to have a positive impact on a worker’s motivation.
Research has shown that when a manager recognizes the contribution of a worker their output increases by 60%. Also, people care about the way they are perceived and praising them in front of their colleagues is going to stroke their ego and make them feel important.
Often, it’s not necessary to give your workers serious incentives; just let them know that they are doing a great job and that you know it. On the other hand, failing to do this is one of the leading causes of employee absenteeism and quitting.
No matter how small their role is, it’s vital to continue to show appreciation for the efforts they put forward.
Cash or equivalent rewards
The most straightforward incentive that you can use is cash or a cash equivalent reward like a gift card. These awards have been used for generations. But praise and commendation by managers are actually preferred to cash by 67% of employees.
There are cases where cash rewards can be far superior to appreciation, especially for those who are driven by money or who have low paying jobs. In these cases, a small bonus each week can have a significant impact on productivity and motivation.
Give clear opportunities and progression
In one study, a large group of people were asked what type of incentive would motivate them the most to perform better. The top result, with 27% of votes, was to be given more opportunities. This was closely followed at 20% by being given more career development and training.
For a significant proportion of employees, the chance to have a larger impact on their jobs and the opportunity for career development is far more important than a cash reward.
To do this, you need to make it clear that progress is possible, and where realistic you should encourage them to pursue it. Making it hard for employees to get promotions by hiring externally and not attempting to train current employees is going to make them unmotivated -- there is no benefit for their extra work.
Ask your employees
Finally, go out of your way to ask your employees how they would like to be incentivized to increase their motivation and productivity. By doing this, you can get a better answer which will work for each person. And you also show that you care.