In 1993, Harvard Business Review published a report based on three decades of research concluding that incentives are ineffective in the workplace. The report stressed that incentives don't create a lasting commitment to values or a course of action. Instead, they simply temporarily change what we do.
This may have been the case in a work environment where employees stayed for decades, and where compliance was valued over engagement. In today's workforce, where the average tenure is significantly shorter, incentives can be highly effective in creating significant levels of engagement from employees that value deep personal meaning to their work, even if they know they will move on in the short-term.
For today's workforce that wants to be personally connected to the company's success, here are 6 tips for highly successful incentive strategies:
A Culture of Engagement Leads to Successful Incentives.
No incentive plan can compensate for a poor culture or fix a broken culture. Incentives are a great way to re-enforce a strong trust-based culture and take employee engagement to a higher level.
Recognition Matters More than Bonuses.
Define incentives as something that motivates or encourages one to do something again and again. The most powerful and sustainable incentive is appreciation and positive recognition. This is especially effective for teams or organizations that rely on large numbers of employees to execute large tasks.
Customized Incentives Go Far.
We've all received gifts that leave us less than excited. We know the gift-giver means well, but we are left thinking, "Seriously??" Customized incentives convey that organizations know their people. Everyone is inspired or motivated by different things. Some appreciate financial rewards, some appreciate time off, some appreciate opportunities to engage in activities they arrange for themselves. A little thought goes a long way.
Mission-Based Work Is The Greatest Motivator.
Steve Jobs shared that passion for what you do is critical because it's often so hard that any rational person would give up. When employees are giving 100% to a mission, quite often the biggest reward for the work is the completion. Aligning mission and meaning with responsibilities inspires employees to stay with difficult tasks and assignments until the end.
Reward Achievements, Not Entitlements.
Incentives are great tools to motivate employees to go above and beyond. They aren't meant to reward employees for doing what's expected of them. An incentive can encourage excellent employees to go the extra mile, rather than bring up a non-performer to an acceptable level of performance.
Link Incentives to Personal Motivations and Personal Values.
Even when work is meaningful, that doesn't necessarily mean it aligns to an employee's personal values system or motivation. Knowing what is important to your people, and giving them an opportunity to support their personal causes will inspire them to go above and beyond.
Today's workforce requires new ways of thinking to keep employees engaged. Millennials and Gen Z workers prioritize quality of life and meaningful work above most everything else. They want to work to live, rather than live to work. How are you using incentives to keep your best people engaged?