When people think of honoring employees for jobs well done, they may typically think of monetary rewards. However, these may be neither necessary nor the best type of reward. Once offered, cash bonuses can come to be expected and quickly forgotten, especially if they are the only recognition employees receive.
By contrast, frequent, positive feedback provided within an enjoyable, team-oriented environment makes a tremendous difference in employees’ sense of being valued and, as a result, their commitment to your company. With or without financial rewards, these cultural aspects of the workplace could be the smartest investment in the staff and business.
Recognize and Reward High-Quality Work
Employees are bound to be much more productive when they work in a positive, supportive environment. For example, Tejas Securities Group, Inc., a full-service broker/dealer and investment banking firm, strives to maintain an enjoyable, family-oriented atmosphere in which all employees focus on achieving team goals. This company goes an extra step by bringing in catered lunches every day for all the employees to enjoy together. “In this environment, everybody wins. We enjoy the dynamics of striving toward our goals together as a team,” said Kurt Rechner, President and Chief Operating Officer of Tejas Securities Group.
Praising employees for achieving their goals is important in maintaining an enjoyable work environment. Management can show their appreciation with positive feedback, however, if they go a bit beyond verbal praise, they can enhance employees’ motivation without spending a lot of money. For example, celebrate successes with bagels or pizza. Invite employees to share their experiences in, and coworkers’ contributions toward, accomplishing the goals. Peer recognition will further reinforce employees’ sense of teamwork and commitment. Conclude the celebration by presenting mugs, T-shirts or other tangible items that will serve as reminders of their success and inspiration for ongoing achievement.
With these good intentions, there are still potential drawbacks. For example, improvements in performance may be temporary, rather than long term. In addition, employees could lose their intrinsic motivation: they can become motivated solely for gaining a tangible prize, especially if it’s a substantial monetary reward, rather than for experiencing the satisfaction of accomplishment. These challenges can be avoided by maintaining a positive, motivating atmosphere.
Inspire Employees’ Creativity and Empower Them to Use It
Recognizing success is critical, and equally important is inspiring employees to work toward achievements. Your staff will be inspired by knowing their contributions are valued and that management is confident in their capabilities. At Tejas Securities Group for example, “The Chairman’s Cup”, a silver chalice inscribed with its name, is awarded each month to an employee who is recognized for their individual contribution to the overall team’s success. The winner is then announced in a company wide meeting and is awarded the cup to display at their work station. Rechner noted “This announcement and award has become a fun and highly anticipated event, recognizing the ongoing importance of individual contribution to the company’s success.”
Inspire creativity by providing freedom, time and other resources to employees. Ask them what they need to maximize their innovative thinking and productivity, and provide it with enthusiasm and encouragement.
To further stimulate employees’ creativity and confidence, support continual education through classes, seminars, subscriptions and memberships. Make information easily accessible through a work library. Ask employees to offer new ideas, request proposals for new projects, and share employees’ suggestions through publications, meetings and recognition events. Most importantly, take action on those ideas that have potential benefit for the company, and recognize employees who made any resulting achievements possible.
While encouraging creativity and rewarding success may come somewhat easily, it may be more difficult to stay optimistic when mistakes are made. However, this is where positive reinforcement is even more critical. Employees will be much less likely to offer ideas if they are intimidated by management’s reactions to possible mistakes. Keep in mind and express to employees that mistakes are learning opportunities, which could lead to innovative ideas that have a major, profitable impact on your company. If an idea doesn’t work out, recognize the initiative and effort. Employees will feel further inspired and satisfied, knowing that management truly listens to their ideas and supports their efforts. According to Rechner at Tejas Securities Group, “management’s openness to staff members’ input, feedback, ideas and suggestions is the cornerstone of good communications and strong employee relationships. Everybody wins when they are all part of a supportive team.”
All of these steps contribute to a sense of entrepreneurship and empowerment, which are essential to reinforcing teamwork and dedication. Empowerment should be initiated on three levels: encouraging employees to be more active in their work; involving staff members to improve processes and procedures; and enabling them to make more and bigger decisions.
In addition to motivation and job satisfaction, employees benefit with strengthened confidence to accept and pursue new responsibilities. Once a few employees succeed, their enthusiasm and motivation would become contagious throughout their teams or departments. As a result, those groups would become more enthusiastic, proactive and therefore, successful, which further stimulates their team spirit.
Ultimately, your company has much to gain by empowering staff members. By maximizing employees’ talents and motivation, managers could invest more time in strategic planning and further motivating employees.
Be Wary of Financial Incentives and Rewards
Certainly, monetary incentives and rewards could be part of your employee-recognition program. However, it is critical that these incentives not be the only or primary strategy for motivating and retaining employees.
On the surface, financial incentives may seem to be the most meaningful forms of motivation for employees. However, the short-term benefits may be far outweighed by long-term disadvantages, which could turn your costly financial incentives into serious deterrents to employees’ productivity. As a result, your company’s profitability could suffer, and you may be faced with further costs of replacing employees who leave for more satisfying work environments.
Typical of human nature, people tend to think about what their employers have (or haven’t!) done for them recently, especially if they do not feel appreciated. Furthermore, a brief word of gratitude only when a financial reward is presented will not be perceived as a sincere expression of appreciation. The easiest and most cost-effective way to avoid this pattern is to maintain open communication with positive feedback and encouragement at all times, with occasional celebrations – where presentation of cash rewards or announcement of new financial incentives, if any, should be just a small part of these events.
Similarly, if cash bonuses are presented on a schedule, such as around the holidays, they probably come to be expected. This reaction could be avoided if bonuses are given randomly, when you have extra money to share with employees. However, before deciding to present cash bonuses, determine if that money could be better used to expand your business. Express to employees how their contributions resulted in the extra cash flow, and rally them up for investing that money into exciting new possibilities for themselves and the organization.
In addition to cash bonuses, other types of monetary rewards are profit-sharing plans and Employee Stock Option Programs (ESOPs). Profit-sharing plans are simple types of retirement plans in which employers contribute an amount of money equal to a certain percentage of eligible employees’ salaries. With ESOPs, the company contributes to a trust, and these funds are allocated to individual employee accounts. Also, employees can reserve part of their paychecks to purchase shares of the company’s stock.
Profit-sharing plans offer a strong incentive for employees to be more involved with the company. The staff is more likely to work as a team and accept greater responsibility for increasing the company’s profitability. Another advantage is that financial benefits are measurable and objective. As a result, management would not risk showing favoritism, which would cause this motivational strategy to backfire.
On the contrary, profit-sharing plans can also have potential drawbacks. They do not guarantee that employees will be focused on customer service, productivity or other essential elements for the company’s success. If profit levels are ever too low to be shared, employees will feel disappointed or even resentful. Even if this does not occur, employees may object to the lack of acknowledgment for their individual achievements. Of course, this particular disadvantage can be overcome with strategies discussed previously. In any case, a negative situation would lead to lower employee morale, which inevitably diminishes employees’ motivation and performance.
On the positive side for ESOPs, employees directly gain a sense of ownership, usually at levels proportionate to how much stock each employee has. The potential disadvantage, similar to profit-sharing programs, is if stock options do not work out. Furthermore, emotional stress often associated with fluctuations in stocks could interfere with employees’ productivity.
Certainly, financial incentives and rewards can be true motivators, but only when balanced against the potential drawbacks and packaged with ongoing verbal recognition, encouragement and support. At Tejas Securities Group, for example, “We supplement our employee-recognition program with an ESOP. The employees’ sense of ownership and the stock investments’ potential are icing on the cake – on top of the essential substance of open communication, teamwork and positive reinforcement,” Rechner said.
Launch a Positive, Ongoing Cycle with the Best Choices for Your Staff
When handled in a consistently positive manner within a team-oriented atmosphere, all of these strategies contribute to an ongoing positive cycle: motivated employees are encouraged to be creative, which leads to accomplishments that gain recognition, which strengthens their sense of job satisfaction and boosts their motivation. With all of these factors in place, staff members will produce more for the company.
The entire process should be continual and even begin with the hiring selection. “It’s essential to start with quality people as the foundation, and then motivate them to succeed,” said Rechner at Tejas Securities Group. It takes hard work, some money and a bit of luck to recruit employees who have the technical skills and personal qualities you need to strengthen your business. Maximize your investment in these individuals by establishing and maintaining a positive relationship with them.
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