Incentives: It's Not (Only) for the Money!

By John A. Haas
Management Strategies Group

Remember Fred Hertzberg? Forty or so years ago he wrote about motivation and job satisfaction. He said that "hygiene factors" (salary, working conditions, supervisor and other relationships and organizational policies) help maintain employee satisfaction; while "motivational factors" (recognition, advancement, achievement and work itself) cause employees to demonstrate a positive attitude and achieve results.

Usual Reasons to Consider Incentives

  • Enlightened organizations are interested in introducing incentives to:
  • Control compensation costs
  • Encourage entrepreneurial behavior
  • Reinforce/enhance business planning process
  • Align participants' with company interests
  • Assure focus on important performance measures
  • Attract top talent
  • Improve vertical and horizontal communications
  • Share company success with key individuals who achieved it.

Reconciling Motivational and Hygiene Factors

Incentive plans allow participants to earn rewards-- usually in the form of cash-based on performance against established goals. But money itself need not be the primary motivator (as Hertzberg would certainly argue).

I've long believed that incentives "work" in organizations because employees inherently want to "do a good job," and incentives define what that means for any particular performance period. Thus, motivational factors such as achievement, recognition, pride in success, working as a team, etc. can and should also be in play. This suggests that other rewards may be as or even more effective than cash alone. Examples could include:

  • Promotion
  • Time off with pay
  • Merchandise
  • Travel
  • Training/Personal Development
  • Dinner or tickets (e.g. sporting events)
  • "Attaperson" programs
  • Time to attend meetings/shows
  • Public recognition 
  • "Club" membership (e.g. lunch or million dollar)
  • Letters of appreciation (on file)
  • Time for writing, research
  • Internal venture funding
  • Support to attend/present at seminars

These represent a combination of cash substitute rewards and recognition/advancement rewards. Even a "well-done" from the boss, perhaps including a congratulatory letter sent home, has tremendous motivational value. Two caveats:

  • Avoid exclusivity rewards where there is one winner and others "lose."
  • Make sure rewards are appropriate for the recipient. For example, don't make the "reward" for a production worker and spouse dinner with the CEO and spouse!

Viewed in these terms, incentives can work even in the most non-profit environments!

Spring 2003 -Volume 13, Number 2

 

 

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