Once upon a time, a person accepted their first job and continued to do that same job every day until their eventual retirement. Work was often repetitive and employees could be counted on to continue their same work so long as a paycheck was provided. Salaries, bonuses, and raises motivated these employees.
Today, a new generation of workers is entering the workforce and many companies are at a loss as to why these previous motivators are no longer producing the same positive results.
Many of today’s workers have been raised on data and instant gratification and desperately want to feel that their work is meaningful rather than repetitive. They want to be challenged and given opportunities to build their skills for promotion and advancement.
There is definitive research that makes it clear that money is no longer the key driver for today’s employees. They rank other factors higher in motivation including health insurance, work-life balance, work environment, coaching and skill building and employer feedback.
They value intrinsic rewards over extrinsic rewards and they are not afraid to move jobs until they find a company that values them and provides the opportunities for meaningful work. Increasing employee engagement keeps your employees interested even when compensation and job security lack in these difficult times.
Employee reward systems were once was a nice-to-have employee management tool, but are now key for improving employee engagement.
Combining Extrinsic Rewards and Intrinsic Rewards
Let’s start by getting on the same page about these terms that are very familiar to HR professionals, but may be new to you if you’re an executive or business unit manager.
What Are Extrinsic Employee Rewards?
Extrinsic rewards are fairly simple to determine and manage. When planning raises and bonuses at the end of the quarter or end of the year, a manager simply sorts employees into 2 categories: employees who have done especially well and deserve a reward and those who don’t.
What Are Intrinsic Employee Rewards?
Intrinsic rewards are a totally different ballgame and thought must be given to determine what type of reward best serves the company and will best motivate the employee.
First and foremost, it is essential that any rewards you consider are directly aligned to company values and goals. Because company strategy changes on a regular basis, it becomes necessary to reevaluate rewards at least every 12-15 months to ensure they are still in line with company objectives.
Rewards You Can Use to Motivate Employees
- Coaching and mentoring. According to Horace McCormick’s white paper “Rethinking Total Rewards,” career growth is the third most frequent reason employees give for accepting an offer and the second most frequent when resigning. That’s why companies, like Michelin Tires, assign a career manager to every new employee to help them learn and grow within the organization.
- Seminars and conferences. Like mentoring, allowing employees the opportunity to attend lectures in their field shows that you value them and want to see them grow. They may even come back with new ideas for the company or a new, more efficient way to go about their daily work.
- Tuition reimbursement. The cost of higher education has risen to a point that many cannot afford it, meaning employers will soon have a much smaller pool of qualified candidates. Offering to pay a portion, or all, of the funds needed for education within a needed area of your organization not only increases your expertise, but also shows employees that you value them and are investing in both your futures.
- Career ladders. Employees want to work hard and see that their hard work is paying off. By providing them a clear picture of the corporate ladder and what it takes to move up a rung, your employees will feel empowered to work towards that goal.
- Corporate university. Offering all employees the opportunity to learn more promotes employee dedication to the organization. You may offer classes in skill building, company history or leadership.
- Relocation packages. For larger companies with multiple offices, relocation benefits allow employees to move between offices, sharing knowledge, strategy and increasing the overall value of your organization.
- Fun Friday. Set aside one Friday a month, for a fun activity that encourages employee interaction. You might bring in a speaker on an interesting topic, show a movie, play games, have a BBQ, make art, do some yoga, etc. Talk to your employees to discover their hidden talents and offer them the opportunity to share that talent with the team.
- Workplace improvements. Since we all spend so much time at work, wouldn’t it be nice if the environment were pleasant to work in? Improvements may include decorations, inner-office chat tools, a tea and coffee cart, standing desks, etc.
- Employee of the month. Social rewards are extremely valuable in that they reward one employee while also motivating other employees to strive for the reward to be bestowed upon them. Employees of the month may receive a certificate, a trophy, a front parking spot for the month, or a tangible reward such as a gift card or a new kitchen appliance.
- Overseas assignments. Companies with offices in other countries may offer opportunities for employees to work in another office for a specified time period. This gives the employee the opportunity to work with another team, bridge the borders between your offices and bring new ideas back to the home office. It also allows employees to travel and feel trusted and valued within your organization.
- Celebrate milestones. Set clear goals, share them with your team and celebrate when they are reached. Celebrations may include a company-sponsored lunch, a bonus day off or a new piece of office equipment.
- Employee to employee reward. Many companies including KPMG, E.On, Fairmont and Starbucks have established programs that encourage employees to formally thank their coworkers for good work and positive attitude. These programs increase employee engagement and ownership by rewarding behavior you, as a manager, may miss. Some programs award points that may be redeemed for tangible gifts like a company sweatshirt or a new lifestyle gadget.
- Work-life balance. As our lives become busier and cost of living continues to rise, employees crave a better work-life balance.
- Challenging assignments. Today’s new generation of employees love work that allows them to work their minds and problem solve. Try delegating a difficult project or two and see what your employees come up with. You may be surprised by how capable they are.
- Gift cards and goods. Reward individuals for meeting and exceeding KPIs with physical gifts that continually remind them of their good work. You may consider giving them a new iPod, a briefcase, a picture frame or a gift card for the coffee shop next door as a thank you. Or, you may wish to award your employees in points to be used for gifts on your company store. These, monetary-type rewards can be viewed as an extrinsic reward. For maximum value, be sure to offer personal congratulations and tie the reward directly to an achievement.
- Family leave. In this busy economy, more and more women return to work just days after giving birth to a new family member and some men don’t even take a single day off. Vodafone discovered that 65% of their female employees resigned within one year after having a baby. In an effort to retain good employees and move more women into leadership roles, the company now pays new mothers their full time regular salary for a shorter 30 hours of work/week for the entire six months following their return to work.
- Sabbatical. Sabbatical allows time for an employee to take a needed break from work and focus their minds on research or discovery. Sabbaticals often result in new, innovative ideas and sometimes, major breakthroughs.
- Flexible schedules. It may sound counter-productive, but allowing your employees flexibility in the schedules actually results in more work done. Remote work is becoming more popular and some companies even offer unlimited vacation, both with the agreement that employees will communicate their plans clearly and provide reports of their success. Employers have found that when given freedom, employees are generally responsible and do not abuse it.
- Wellness programs. Americans are some of the most stressed employees worldwide and it’s no wonder when we spend so much time sitting at a desk eating fast food. Introducing a wellness program can take many forms including a weekly yoga class, healthy snacks in the break room, or a quiet office reserved for meditation. You may also award points to be redeemed for wellness gifts like a new, ergonomic desk chair, a massage or a gift card to the smoothie shop across the street.
- Employee autonomy. Giving employees the power to self-manage builds trust and results in everyone getting more work done, including you!
Suggestions for Implementation
Ready to start introducing rewards into your organization? Remember to start small and track all results. Include employees in the development of rewards programs to ensure your motivators are strong enough to enact results and communicate rewards systems clearly and often. Above all, be transparent and authentic as you begin this new chapter in employee motivation.
Share your favorite tried and true rewards in the comments below!