Employee motivation: Bucking the cash trend
Posted by Leslee Vivian on Thu, Aug 05, 2010 @ 03:56 PM
How do you motivate employees when budgets are tight? The good news is that effective employee recognition isn’t always about the all-mighty buck. According to a recent McKinsey Quarterly survey1, some noncash incentives can be even more motivating than cash.
Three noncash incentives that motivate employees:
- Praise from immediate managers
- Attention from leaders (for example, one-on-one conversations)
- A chance to lead projects or task forces
The employees surveyed rated these incentives as no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options. The noncash incentives made them feel that their companies valued them, took their well-being seriously, and were striving to create opportunities for career growth.
In an era of shrinking budgets, why aren’t more companies opting for creative, non-cash rewards?
One reason may be that managers don’t want to challenge the status quo belief that money is what really counts. They may assume that bonuses rule. Another reason could be that recognizing people with something other than a cheque takes time … often a lot more time and commitment from senior management.
However, some visionary companies are looking beyond cash to understand what truly motivates employees. Numerous studies point to the fact that for workers who are making enough money, some nonfinancial motivators are more effective than extra cash in building long-term employee engagement.
To find out more about bucking the trend with noncash incentives, read “Motivating people: Getting beyond money” (November 2009).
http://www.mckinseyquarterly.com/Organization/Talent/Motivating_people_Getting_beyond_money_2460
1 McKinsey Quarterly conducted the survey in June 2009 and received responses from 1,047 executives, managers, and employees around the world. More than a quarter of the respondents were corporate directors or CEOs or other C-level executives. The sample represents all regions and most sectors.