Does Money Motivate Employees? Why Or Why Not?

What motivates more than coin?

With employee engagement at stone bottom, finding new means to motivate staff is proving a real headache for many companies. Increase wages? Offer more benefits? More flexibility? What works all-time? Traditionally, employers have used monetary rewards to boost employee engagement and motivation, but studies take shown that monetary benefits are losing their entreatment. Instead, recognising employees' efforts is appearing to be the almost effective in motivating employees.

Money is a short-term motivator and has express appeal

Aye, money is important, only that comes equally a standard expectation with whatever task. People expect to be paid a fair wage, and without information technology, no amount of perks can attract or retain employees. This is peculiarly of import in countries with weaker economies, such every bit Poland and Brazil, where take-home pay is still the number one factor in employees decision to move or stay with their existing employer.

However, in stronger economies with stricter laws enforcing a minimum wage, such as the United kingdom of great britain and northern ireland, financial bounty loses its influence. The ripples of motivation that follow a wage increase fade away afterward ii or 3 weeks. A contempo BCG survey asked more than than 200,000 employees from around the world their superlative ten factors for on-the-job happiness. Results evidence that people place appreciation for their work as the about of import factor for on-the-job happiness - an attractive fixed bacon was merely eighth on the list.

Benefits outrank salary

So what is the most effective way for a company to evidence its appreciation? Enquiry from Glassdoor shows that most iv in five employees - 79% - would adopt new or additional benefits as opposed to a pay increment.

Yet, the kind of benefits people prefer varies depending on a wide range of factors. An individual'due south profile, such as age and gender, as well as their own personal preferences tin can decide what incentives piece of work all-time for them. Studies accept also shown that trends for preferred benefits modify between countries. For example, a 2016 Sodexo Benefits and Rewards study conducted in five countries shows that, in Brazil and India, admission to training courses can boost a company's appeal just as much as the fiscal benefits it offers. Whereas, in the United States - the merely mature marketplace in the world that does not provide universal paternity get out and offers fully paid maternity leave to just nine% of mothers - time off to raise a newborn baby could be invaluable to expecting parents. Thus, finding the right rewards to increment the productivity of your workforce becomes increasingly difficult.

Incentive and recognition programmes are the respond

Incentive and recognition programmes have been proven as effective motivators without the demand for financial benefits. While the range of incentives can be vast, workplace experts recommend one characteristic in a higher place all: adaptability.

The 'ultimate reward' can look very different depending on your perspective. Giving employees a choice in how their difficult work and dedication volition be rewarded is a good way to boost employee engagement. More and more companies are getting flexible and creative with their employee recognition offers, ranging from company-sponsored fettle programs to gratuitous meals and fifty-fifty outside-the-box perks such as egg-freezing.

Co-ordinate to the Incentive Research Foundation, the right incentive program tin can amend team performance by as much as 44%, heave employee engagement by 27% and also attract higher quality employees. SMEs and larger companies alike tin can reap huge rewards from effective incentive recognition programmes. A 2015 Sodexo Benefits and Rewards global survey revealed that 74% of SME leaders who had introduced such programmes had seen an improvement in hiring, with 88% claiming a leap in productivity and 71% an increase in sales.

The all-important human factor

Not only does investing in incentives assist boost recognition: corporate culture also plays a key role in enforcing and maintaining motivation. When employees experience appreciated, they gain a stronger sense of existence part of the company. Organisations also need to comprehend and nurture the different personalities in their workplace as these personalities are the very foundations of a company'south civilization. This in turn nurtures long-term benefits such as higher employee appointment, morale, loyalty and productivity. Some studies report that productivity can jump as much as 30% when team members receive one slice of praise a solar day.

A McKinsey written report also showed that motivators such as attention from leadership or the opportunity to accept on leadership roles were just equally effective as cash bonuses, pay rises and stock options. What is more, praise from a managing director was ranked equally the top motivator past 67% of workers - outweighing financial incentives and non-cash rewards.

When thinking nigh motivating employees, the first incentive that springs to heed tends to be money. Yet studies have shown that this incentive is brusk lived. Instead non-monetary incentives take the potential to go a lot further in motivating and engaging staff.

While incentives are always a expert solution when it comes to employee motivation, the furnishings of showing your appreciation for employee'southward efforts through a face-to-face 'give thanks you' should non be underestimated. The benefits to employers are also axiomatic, non simply is it uncomplicated and personal – it's also completely free.

Source: https://www.sodexoengage.com/blog/employee-motivation-is-money-the-only-answer

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