Motivating people to excel is critical. Why? Most businesses compete through the efforts of their people -if people's performance is second rate, the organization will quickly struggle. This is especially true when times are tough and organizations have to work harder to survive. But what do you have to do to get people to give their best.
At work people are looking for their needs to be met by their employer. They are looking to be rewarded fairly for their contribution and in comparison to others. If organizations implement reward and recognition programs that achieve these requirements , people's motivation will increase along with their performance and commitment to the organization.
At first glance this is simple, but it is not as easy as it sounds, especially in the current tough times. Organizations have to first identify people's need, consider these in the context of corporate goals and then look at how they can best be met in a way that is affordable and fair to everyone.
Tailor made
People's needs are different- what motivates one person will not motivate another. Some people maybe motivated by money, some by flexible hours and others by recognition from their boss. The first thing an organization needs to do is find out what each person wants. If organizations are to win the talent war they must offer flexibility and treat people as individuals-adopting a one -size -fits-all approach simply will not do.
In order to simplify things to people's needs can be broadly arranged under the three headings: package, job satisfaction, and employability as demonstarted in my book: Human Resources Management in Action.
This breaks down to the following definitions:
- The package: Financial incentives are important-people want to see a reasonable payback for the value they create. For some people and in some jobs pay will be the critical motivator. For example, a study by Jolito Ortizo Padilla 2007 found that for salespeople higher commission rates were the most preferred reward, while promotion and recognition were the least preferred. . However, pay can easily be matched by another employer so organizations need to motivate staff in other ways if they are to keep hold of them and get the best out of them.
- Employability:: Many people want a career not just a job. They know the future to be uncertain and they want to be ready with a passport for alternative employment. We know for example, that training and development and being involved in prestigious projects are particularly important to Generation Y.
- Job Satisfaction: People want to feel happy in their job. Many want to feel a sense of achievement and to work in an organization with values congruent to their own. They maybe motivated by a sense of autonomy and a working environment where they are respected and recognized.
In order to motivate, attract and retain talented people , as well as be considered employers of choice, organizations need to consider the whole triangle. Organizations must recognize that people are motivated by a range of factors so offer greater choice and flexibiliity in the way they reward and recognize employees.
In view of this , many organizations have now introduced total reward. The idea of total reward is that the organization offers a single, fully integrated flexible package. Recognition is not just given through pay and benefits but also through less tangible rewards such as the work-life balance and the company culture and values. This approach goes beyond flexible benefits to provide employers with the chance to really sell their brand and what it represents. It also empowers employees to tailor their work and surroundings to meet their needs.
Are you being fair?
People are motivated to get what they consider to be fair return for their efforts. They want to see what is known as distributive and procedural justice. The former is about whether a person feels that they will be rewarded fairly compared to people in relative jobs, both in their own and in other organizations. The latter is whether a person feels that the organization has a procedures in place to ensure that rewards are allocated fairly.
An example of where distributive and procedural injustice can be found is in the financial sector. A recent report by the Equity and Human Rights Commission shows that women working in banks are paid 80% less in bonuses than their male colleagues. The report also shows that starting salaries for women working in the financial sector are significantly lower than men. It said: Overall including bonuses and salaries, the gender pay gap in the city stands at 47% , compared with a national average of 17%.
So, what is the impact of this kind of inequality? Organizations that fall to reward fairly miss out on their best opportunity to foster real commitment from their talent-in this case talented women. Also, word soon gets around and it will become difficult to attract talented people to work for an organization where their efforts are not fairly recognized. If an organization is going to attract and keep the best people , it needs to ensure that the pay is comparable with other organizations and that it spends time developing a reward and recognition programs that is fair at all.
It seems obvious to say, but in working hard to motivate its employees, an organization must not forget its own needs. A reward strategy should flow from the business strategy and, as a result, focus on the behavioral and performance that supports the organizational goals. For example, if teamwork is fundamental to the organization's objective it would not be right to reward an individual's status-seeking behavior no matter how talented that individual may be. The employment proposition and employee branding describe what the organizations has to offer and reminds us that although trying to attend to the needs of each individual is important , organizations cannot be all things to all people.
Once an organization has developed a reward and recognition program it doesn't end there. If it is to work then people need to understand it and , very importantly, managers need to ensure they implement it.
Job satisfaction is the strongest predictor of whether people will stay with an organization and quality of supervision has a strong impact on job satisfaction. Unsurprisingly, that means that managers and supervisors have a critical role in the motivation and retention of talent. In fact the Chartered Institute of Personnel and Development reward survey 2009 reported that the biggest inhibitor to the successful operation of reward strategy other than budget constraints is line management skills and abilities.
Organizations must ensure that managers are equipped with the necessary skills so that they can provide the relevant support and feedback to staff and understand their individual needs.
Through Thick and Thin:
A 2006 study by Towers Perrin showed that companies with highly engaged employees increased their net income by 13% , while those with less engaged employees saw their income decline by 4%. The argument is clear :motivating and engaging your employees is not a nicety; it must be done to survive. Not only is it important for today but also for tomorrow.
Organizations that continue to commit to their talent in the tough times are much less likely to loose them when the good times return. Such organizations will also be an attractive alternative to talented people who have not been treated as well by other employers. In line with the argument, a recent report by PricewaterhouseCoopers titled Managing Tomorrow's People states the importance of sound HR decisions during the recession if organizations are to attract the most talented people over the next decade.
So how do you keep people motivated in tough times?
First communicate with people. Of course, the recession has meant that plenty of employers have been unable to fully meet the needs of staff or even preserve their jobs. Employees may well be resigned to their pay being frozen or cuts to training bugets but how these cuts are communicated can mean the difference between retaining the motivation of employees and not.
Those organizations that clearly communicate the situation and only make cutbacks as a last resort as opposed to preserving their executives' lifestyle are more likely to retain the trust and goodwill of employees. Senior leadership, HR and front-line supervisors and managers must all be consistent in their messages and employees should be motivated to support decisions, not simply told that this is how it is. If handled badly, insecurities build along with negative rumours and motivation can rapidly plummet.
A recent article in People Management revealed that " more than a third of employees affected by pay freezes or changes to their contracts during the recession have felt demotivated as a result". Also, PricewaterhouseCoopers poll of people who have experienced these measures found that 34% felt " demotuvated" while 8% felt "angry". While these statistics are not good , they do suggest that many organizations are doing some things right as by no means all employees are feeling demotivated by the cuts. Some organizations for exampls, encourage their people to take pride in being thrifty, incentivising low cost behavior and setting an example from the top. IKEA is one such example.
Secondly be creative and introduce rewards that won't break the bank. While cuts may indeed be inevitable and cost conrol paramount , organizations can be inventive in their approach to reward and recognition without spending a huge amount . For example
- Offering flexible working
- A personal thank you note from the CEO
- Share options
- Children vouchers-these are free of tax and national insurance
- Awards for performance and long service
Procter and Gamble, for example, instead of stressing higher salaries highlights the opportunity for flexible working, working from home and family leave to look after children or elderly parents. Other organizations have "duvet days" and bean bag rooms that are designed specifically with Generation Y in mind.
Tougher times, combined with people's increasing desire for jobs that offer much more than a good salary , require organizations to be both skillful and creative in their approach reward and recognition. One thing is certain; those organizations that meet people's needs on an individual basis., in the context of the organization's goals and in a way that is affordable and fair to everyone , will reap the rewards for years to come.
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