Are financial rewards still an effective engagement tool? If not, what else engages employees?
When it comes to keeping employees interested and productive, financial rewards are one piece of the jigsaw – and a critical piece – but this piece alone does not pull together the whole puzzle of the engagement conundrum. And engagement really can be a puzzle at times, as this is something that employers across the country and beyond regularly struggle to succeed at.
We cannot ignore that financial rewards make a crucial difference to people’s lives, but money is truly not everything. You need more. Not least because money alone does not elicit the same loyalty and inspiration that the cost-free approaches do. These other non-monetary approaches are arguably more important, more powerful and more meaningful. But why is this the case? Many would argue it is because they allow people to feel valued for their work on a personal level in a way that cold hard cash just cannot provide. Thinking about the basics of human psychology, Maslow’s Hierarchy of Needs is always good place to start. If financial rewards and pay create stability, this would come under the safety zone of the pyramid, whereas the recognition piece for us in HR would relate a lot more to belonging – a need that is much higher up the chain.
Effectively, it is about getting the basics right.
“How are you doing?”
This is a simple question that takes seconds to utter, but when asked of an employee by their manager it demonstrates to the employee that their wellbeing, whether work-related or otherwise, matters. The positive impact of just plain, simple consideration like this on the employee’s productivity and engagement is priceless - quite literally.
The positive impact of recognition is fairly obvious, but it often seems that the inclusion of this as part of a holistic approach to reward is sometimes overlooked by employers or takes a back seat, whilst the focus is on more ‘important’ financial rewards such as pay and bonus. There is much research out there however that demonstrates the clear link between recognition and engagement, and, ultimately, increased productivity and profit levels.
My experience tells me that it is the small things really do make the biggest difference – the little things that cost nothing and require minimal planning to implement, such as praise for a job well-done or a simple thank you. A nice idea for the summer months like surprising employees by allowing them to go home early to enjoy a sunny afternoon. The possibilities are endless.
The beauty of recognition is that it makes everyone involved feel good – giver and receiver alike.
These small yet powerful expressions of appreciation are the foundation of employee recognition and of course many organisations have the desire to build on these with more elaborate or innovative recognition schemes or opportunities. Because the options are simple but vast, it’s even more important to choose the right form of recognition for your organisation. Getting it wrong could be costly not only due to time and money wasted but it can create disgruntled, disengaged employees.
For those looking to plan or implement a new scheme or rejuvenate an existing one, you should always explore the answers to the following questions from the very beginning:
- What are the behaviours or achievements that are being recognised?
- Will employees be recognised as a team or individually?
- Does the recognition fit with the organisation’s culture and values?
- Is there a link to organisation strategy?
- Does it complement HR strategy?
- Will the recognition be valued and received well by employees? How relevant is it for the demographic?
Employee experience is the key to everything. It’s a mixed bag as it relates to working culture, environment, and even the individuals themselves. If you don’t know where to start when driving engagement, then my advice would be to follow this simple rule: if you don’t ask, you don’t get. Talk to your people. Find out who they are. That alone is engagement 101.
If you need help with designing an impactful strategy for your employee benefits and reward, you can get in touch with us at firstname.lastname@example.org or contact one of our team of experts on 020 3457 0894.