Despite recent budget cuts and efforts to reduce excess spending, many companies still depend on pay-for-performance practices to motivate workers, according to Employee Benefits.
Despite recent budget cuts and efforts to reduce excess spending, many companies still depend on pay-for-performance practices to motivate workers, according to Employee Benefits. These strategies make it possible for top earners to make more money by bringing in additional revenue for their organizations, but the source notes this can create pay discrepancies that may lower engagement levels.
The thinking goes that increased bonuses will motivate workers to work harder and longer, ultimately delivering better results. However, these types of sales incentive programs also have some drawbacks. Additional pay tends to lose its value the more money an employee earns. As long as staff members are able to live comfortably, there is not much incentive to work a lot harder to reach the next bonus. This limits the return on investment for businesses, which requires them to continually increase the payout for each level to provide additional motivation for staff members. At a time when companies are looking to cut back on operating costs, many firms simply can't afford to keep increasing payouts.
Support employees to improve motivation
A separate article by Employee Benefits notes it is supporting employees in their jobs that makes the most difference in engagement levels. Using a team-based strategy can be equally successful as pay-for-performance while using only a portion of the costs. Employee recognition programs are a valuable tool when it comes to showing support for each worker, which can keep motivation levels high throughout an organization. Workers are pushed to succeed for their teams, rather than competing on an individual basis, which can discourage new or struggling staff members.
In team-based reward programs, communication is a vital part of generating the desired results. Not only does each department need to understand the structure of a reward program, but each employee should know what roles they fill within their teams. Clearly defined roles make it possible for groups to function successfully. Taking the time to acknowledge the specific contributions of certain members informs employees about the different responsibilities within a group.
Improving return on investment
Companies facing budget constraints can still increase motivation and engagement among employees. The key is creating a consistent method for rewarding performance. Using non-financial rewards provides incentives without large increases in expenses. Rewarding employees with personalized items lets companies motivate each team member. These rewards can remain in place until workers successfully achieve personal development goals, which creates consistency within the program.
Regardless of the type of reward that businesses offer, consistency should be a top priority for any employee reward program. If workers feel they are not being treated fairly, they will not participate in an initiative, reducing its ability to enact change within an organization.