One look on the MTI Events official website, and you’ll feel incentives may be necessary for employees. But are they? You can consider at least two opinions from the experts.
HBR vs. Forbes
Harvard Business Review doesn’t agree. In the article, the author, Alfie Kohn, highlighted how rewards trigger only temporary compliance. People react positively to incentives, true. It explains why salespersons, for example, can live with only basic salary. They can aim their eyes on the bigger prize, which is the sales commission.
The problem is, the article said, is that rewards can also come up and go. Once it disappears, employees can revert to their old behaviors. One of these is a lack of motivation or engagement.
Meanwhile, Forbes has a slightly different but significant opinion. Incentives can work if companies learn to manage them with the right. Rewards can drive performance and engagement, which is economical and valuable. Gallup once said that the cost of disengagement could reach billions. In the United States, it can be as much as $550 billion!
Of course, this cost spreads across industries. Nevertheless, it is hurtful for small- and medium-sized businesses. These enterprises usually have fewer than 70 employees. If 3% of them are not engaged, it can translate to a high loss of productivity and efficiency.
Forbes emphasizes, though, incentives need to meet two criteria:
- Tied to something that’s achievable and measurable
If they don’t, then you run the risk of reduced job satisfaction and underperformance.
Which Incentives Then Can Work?
When it comes to choosing your incentives, Forbes warns about tying rewards to events such as year-end bonuses. Instead, link them to outcomes. It cites at least two examples:
- Education and training
- Greater responsibility
Both of these are essential because of one thing. Employees desire career growth. According to Maslow’s pyramid of human needs, the basics are at the lowest level. These are the factors people should have to survive. That includes income.
As the company meets their needs, their desires also go up. At the higher levels, you have self-recognition and self-actualization. At this point, they might no longer need more money. Instead, they’re searching for a higher purpose.
In a survey by Harris Poll and Instructure, career growth is one of the common reasons why employees leave. It follows low pay. Around 77% of the respondents said they’re left to fend for themselves in the company.
The two rewards above can then help keep your employees stay because you can meet their needs.
- Training and education can give them the tools to rise above the ranks. Plus, it breaks the monotony or routineness of work.
- More responsibility allows employees to practice what they learned during training. It also helps them mature so they can chase higher positions.
It also pays to understand the primary needs of your employees. For instance, single mothers might prefer a more flexible working schedule. Heads of a household can look forward to a family health insurance plan.
Both HBR and Forbes agree that incentives are not mandatory. When done right, though, it can keep the best talents in your team. Even better, you can attract other high-performing individuals in your industry.