In decades past, motivating employees was all about raises, promotions and bonuses. Those days are gone, and today’s employers are quickly learning that engagement stems from different kinds of incentives — ones that impact an employee’s emotional, rather than financial, health.
Based on insights from members of Forbes Coaches Council, here’s why traditional incentives might be out of date, and what you can do to offer customized and effective rewards to your team.
From top left to right: Meridith Elliott-Powell, Dean Miles, Judi Rhee Alloway, James Lopata, Daniel Rounds, Michelle Tillis Lederman, Fleet Maull, Jenn Lofgren, Andrea MacKenzie, Mark S. Babbitt. All photos courtesy of the individual member.
1. Promote Ownership First, Incentive Second
It takes more than incentives to motivate employees long-term. Sustainable engagement happens when the company culture provides trust, ownership and performance management. With those three pieces integrated into your leadership style, you’ve designed a culture where incentives can be a great added bonus to employees who are already engaged. – Meridith Elliott-Powell, MotionFirst
2. Recognition Matters More Than Bonuses
Traditionally, we think of incentives as a payment or concession to stimulate greater output or investment. Instead, define incentives as a thing that motivates or encourages one to do something again and again. The greatest incentive that is both sustainable and economical for a large business is positive recognition. High performing teams give four positive pieces of recognition for every one negative. – Dean Miles, Bridgepoint Coaching & Strategy Group
3. Incentives Need To Be Customized To Be Effective
In many cases, people who work at large companies seek stability, benefits and perhaps status. Incentives generally work when people are motivated by economics. If your employees enjoy your company benefits, then they will be best incentivized by adding another fantastic benefit. If your employees love status, change their title after reaching certain benchmarks. Customize their options. – Judi Rhee Alloway, Imagine Leadership LLC
4. The Most Powerful Incentive Has Always Been Meaningful Work
The most powerful incentive is and always has been meaningful work. Incentives that are connected directly related to the job and its desired outcomes keep people motivated throughout every work day, even in the most difficult stretches, and not just at bonus time. Always align mission and meaning with responsibilities. – James Lopata, InnerOvation
5. Learn What Your Team Wants And Incentivize Accordingly
Incentives are always a good way of motivating employees in a business of any size. It is the type of incentive that makes a difference. Using surveys and focus groups are an effective way to determine what incentives employees desire. Offering relevant incentives will be a strong motivation for continued employee success, and they will appreciate the investment in their overall well-being. – Daniel Rounds, danielrounds.com
6. Incentives Are A Short-Term Solution To Engagement
Incentives are great! They put employees in a happy mood and give them something to feel good about. The only problem is that feeling is fleeting. Incentives that are not related to the work, advancement and having impact in the organization are typically a temporary fix. To sustain employee engagement, understand the individual motivations and infuse them into the job regularly. That’s real incentive. – Michelle Tillis Lederman, Executive Essentials
7. Use Achievements, Not Entitlements
To work effectively, incentives need to be transparent and directly tied to a measurable action or achievement so they don’t become entitlements. Educational and training incentives are a great way to reward employees with a break from their daily routine while providing them with an opportunity to improve their expertise, which can spur career advancement and make them more valuable to the company. – Fleet Maull, New Line Consulting
8. Link Incentives To Personal Intrinsic Motivations
Incentives need to be linked to the intrinsic motivation of employees in any sized organization. Link them to supporting employees with developing mastery, gaining more autonomy or having time, resources and ability to create an impact they care about. Without these links, incentives become about money only and the benefits rarely materialize as planned and performance may even decrease. – Jenn Lofgren, Incito Consulting
9. Understand Shared Values To Create The Most Effective Incentives
Understanding the shared values across your organization and hiring people who also share those values can help companies create effective incentives. You can’t please everyone, but if you are aware that the majority of your people value things like family, flex-time or recognition, you can create incentives that motivate the individuals and support a strong company culture. – Andrea MacKenzie, Lead With Harmony
10. Consider The Emotional Impact Of Your Incentives
Show me a culture that motivates exclusively with money and I’ll show you a calendar from 1984 and a poster from Glengarry Glen Ross. Yes, financial incentives were hugely popular in the Industrial Age. In the Social Age, though, people want to feel aligned with the purpose of the organization. They want to know their work has meaning. Your incentive plan must consider those emotional impacts. – Mark S. Babbitt, YouTern
