Studies show cash rewards can lower performance
Looking to get employees more involved and engaged in their work?
Unless your employees do mostly repetitive, mechanical jobs, you might want to skip the cash incentives. Not only don’t they work, they may actually lower performance, says business author Dan Pink.
Incentives work for specific jobs
Pink cites two studies in which people were asked to take on various challenges for different-sized cash rewards.
Some challenges were simple, such as throwing a ball. Others were more complicated. The results:
- When people were asked to perform repetitive, non-cognitive jobs, cash incentives improved performance.
- But when they needed to use their cognitive skills, cash lowered performance
Surprising? Not really, says Pink.
They want satisfaction more than money
When employees use their creative or cognitive abilities, they do a great job just for the personal satisfaction – not for the money.
So if cash doesn’t inspire people, what does?
Pink says there are three things people want from their jobs even more than money:
- Self-direction
- Improvement and
- A sense of purpose
Self-direction
As a manager, you’ve probably seen these motivators in action. People want to have the ability to choose how they do their jobs.
If they have more freedom, they feel more ownership over their work. And that gives them a sense of pride.
To use this, ask employees if they have ideas to improve their work process. When possible, let them try their ideas.
Example: One company gives employees one day a month to work on anything they want. At the end of the day, employees report what they’ve done. It’s been a big success – and likely generated more successful ideas than cash bonuses would have.
Improvement
Most people want to continue to learn and grow. That’s one reason many companies offer training programs for employees.
Remember to encourage staffers to attend any training sessions your company offers.
You may want to even take it a step further and look for opportunities to cross-train staffers.
The time investment can pay off by giving them a motivational boost.
A sense of purpose
More companies are realizing how important it is for employees to feel they ‘re doing something bigger than their jobs.
To help employees see this purpose, give them a connection to satisfied customers. One way to to do this: Put customer pictures and quotes on the wall.
It is great for everyone – when your employees can see how their work is contributing to the greater goal – and creating delighted customers.
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