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Is Money Enough To Motivate Employees?

IS MONEY ENOUGH TO MOTIVATE EMPLOYEES? The Meaning of Rewards and Incentives in the Modern Workplace There is a fundamental shift occurring in the workplace, and employers are beginning to see that the secret to long-lasting employee performance and satisfaction has more to do with attending to intangible enrichment rather than material rewards. This all begs the question: is money the best incentive to motivate employees? WHAT MOTIVATES PEOPLE?. FOUR BASIC EMOTIONAL NEEDS (1) Acquire According to the book,"Driven: How Human Nature Shapes Our Choices," employees are driven by the need to satisfy four fundamental emotional needs. They long to: Bond To obtain scarce goods, including tangible and intangible rewards To form connections with individuals and groups Comprehend 3. To make sense of and master Defend the world around them To protect against external threats THREE ELEMENTS THAT LEAD TO BETTER PERFORMANCE Daniel Pink, author of "Drive," writes about what motivates us and arrives at three primary factors that drive people to perform in the workplace: I Autonomy Mastery 3. Purpose The urge to improve on a skill or talent The need to be self-directed The hope to make a contribution THE REWARD SYSTEM. In order to fulfill the motivations that push employees to strive, especially in the case of acquiring scarce goods, it's important to give them some sort of an incentive to do so. HOW IT WORKS TRADITIONALLY: TANGIBLE REWARDS "The [traditionalist] generation..was socialized through scarcity and hardship. Traditionalists tend to be with one company over time and are satisfied with a job well done." -Nilsson and Edlund, 2007. The usual approach to motivation involves financial incentives and other physical forms of compensation. However, these types of rewards are only short-term motivators. $100 CONGRATS Menge Gift Cards Bonuses Pens Излеу Salary Plaques According to a study conducted by Carnegie Mellon, Duke University and MIT researchers, the more monetary incentives people get, the less they perform because profit becomes unattached from the larger organizational goals. HOW IT WORKS NOW: INTANGIBLE REWARDS In the modern American workplace, social rewards have gained more attention, as traditional motivation schemes rarely achieve their intended goals. Now, there's a greater emphasis on harnessing behavior based on a purpose-driven model. Praise and Appreciation Job Security Flexible Hours Recognition Sense of Influence Opportunities for Growth "Generation Y employees prefer flexible working hours over high salaries, since they expect their jobs to fit into their everyday lives." -Nilsson and Edlund, 2007. HOW REWARDS AFFECT ENGAGEMENT- Respondents to a survey* conducted by Hay Group and commissioned by WorldatWork were asked to reveal which specific total rewards-related programs have an impact on employee engagement. IMPACT OF TYPES OF REWARDS ON EMPLOYEE ENGAGEMENT HIGH VERY HIGH (PERCENT OF RESPONDENTS) Intangible Rewards Financial Rewards 18% 11% 16% 5% 6% 9% 43% 48% 53% 36% 36% 39% Base Salary Benefits and Prequisites Program The nature of the Base Salary Level Work environment Career or organization climate job or quality of Increase development opportunities the work The impact of intangible rewards on employee engagement is generally perceived as higher than financial incentives across all categories, with almost 70% of respondents rating the nature of the job or quality of the work as being high to very high. IN OTHER COUNTRIES?. There is no doubt that culture plays a vital role in how incentive and reward systems are designed. How do norms differ in other countries? JAPAN GERMANY Traditional Japanese companies that operate in domestic markets prefer to use the Nenko system, which rewards groups of employees with tangible wages and bonuses according to their seniority. According to a Gallup poll, employees in Germany feel more interested in work with intangible incentives. 80% of engaged employees in the country say their opinions seem to count at their companies, and 65% of engaged employees strongly agree that they've been recognized or praised for their work. DISCONNECT BETWEEN MANAGERS AND EMPLOYEES. A study at Westminster College in Utah examined motivation and productivity in the workplace, and found that the surveyed managers and the employees that report to them are on two very different pages. TOP MOTIVATION TECHNIQUES (Percent of Respondents) WHAT EMPLOYERS THINK WHAT EMPLOYEES THINK Money (65%) ● Boosting Morale (32%) Recognition(6%] Recognition (27%) Training (29%) ► Money (18%) There is an obvious discrepancy between what managers and employees see as primary galvanizing forces. While 65% of managers think money is the most successful motivation technique, only 18% of employees agree. Instead, they cited boosting morale and recognition as higher on the scale. HOW MANAGERS CAN MOTIVATE EMPLOYEES EFFECTIVELY?. A study by the Harvard Business Review found that by engaging workers and satisfying all of their primary needs to acquire, bond, comprehend and defend, managers can motivate their teams to perform better. Let's take an average firm that ranks in the 50th percentile on employee 50% motivation effectiveness. By improving one of the four needs, perhaps just giving employees financial incentives, it would move the company up six percentage points. 56% But by fostering all four needs, which include intangible improvements to help employees understand their purpose, to it would boost its effectiveness up to the 88th percentile! 88% A Harvard Business Review study asked employees to rate their managers based on how well they motivated their teams according to satisfaction of the four emotional drives to acquire, bond, comprehend and defend professionals. Acquire Bond Comprehend Defend Companies whose survey scores were in the top fifth did much better in all four categories of emotional drive than companies who landed in the bottom fifth. This means that the companies that take foster these core needs can retain employees better. Top 20% of companies Bottom 20% of companies *Based on a sample of 6,300 WorldatWork members, primarily total rewards professionals. SOCIALCAST SOCIALCAST OCIACAST SOCIALCAST SOCIALCAST sOCIALCAST sOCIALCASTsoCIALCAST SOCIALCAST SOC CAST SOCIALCAST O 2011 SOCIALCAST INC. ALL OTHER TRADEMARKS HEREIN ARE RECOGNIZED TO BE THE PROPERTY OF THEIR RESPECTIVE OWNERS. SOCIALCAST SOCIALCAST Sources: | Harvard Business Review Alliance for Work| "A SHRM Perspective on International Compensation" | Hay Group| soCIALCAST SOCIALCAST SOCIALCAST "A Project on Employee Motivation" |"Driven: How Human Nature Shapes Our Choices"| "Drive" | Edlund, Malin and Nilsson, Hanna. "Employee Motivation in Medium-sized Manufacturing Enterprises". (2007).|CAST Gallup Management Journal SOCIALCAST SOCALCAST SOCIALCAST SOCIALCAST SOa.CAST SOCALCAST SOCIALCAST SCIALCAST SOCIALCAST SOCIALCAST CAST SOCIALCAST LCAST SOCIALCAST SOCIALCASTCIALCAST SOCIALCAST SOIALCAST soa.CAST OALCAST SOCIALCAST SOCIALCAST IALCAST SOCIALCAST Average Rating

Is Money Enough To Motivate Employees?

shared by ColumnFive on Jul 28
There is a fundamental shift occurring in the workplace, and employers are beginning to see that the secret to long-lasting employee performance and satisfaction has more to do with attending to intan...


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