An article in Harvard Business School in 2017 spoke about Modern Motivational Methods for Attracting and Retaining Employees. Many companies are now struggling to hire and retain employees in the current labour market. Candidates are hard to be found and retaining existing staff has become an important consideration for management teams. Now more than ever, we need to consider the importance of workplace recognition and rewards.
Research has shown that “cash” rewards are not always the most effective. A reward that tells the employee that they did a good job can encourage that person to want to work harder. Knowing that their manager is happy with their work and that the work is acknowledged can be the best reward to help retain employees.
There are other ways you can offer your employees rewards that are not cash based. These include:
- Taking time to acknowledge and praise the work the employee is doing and how that is contributing to the business.
- If giving a cash bonus, include a personal note explaining why the employee is receiving the bonus
- Give the gift of time – an additional half day’s holiday can be worth more than the financial equivalent when taxation is taken into consideration.
- Consider performance based incentives. Research over the years has proven that financial incentives can boost an employee’s performance. However, what often works better for future performance is to hand out the reward immediately a target is reached rather than dangling it beforehand.
- Give non monetary gifts, a voucher for the employee to purchase something for themselves that they can associate with the achievement.
When you are recruiting new staff, it’s also very important to let them know that they are joining a company that rewards their employees. Always emphasise benefits. The most common benefit employees are looking for in 2023 is flexible working arrangements. Some other employee benefits include:
- Flexible Working Arrangements – Hybrid, Remote Options
- Healthcare
- Paid Time Off – Additional Holidays
- Social Opportunities – Staff Nights Out
- Free Food in Office
Why rewarding employees works:
These types of rewards work because they tap into three strong psychological needs:
- Employees long for autonomy, with the freedom to choose how to do their work.
- They want to appear competent, armed with the skills needed to perform.
- They want to feel a sense of belonging by socially connecting with colleagues in a meaningful way.
When these needs are satisfied, employees feel more motivated, engaged, and committed to their workplace—and they report fewer intentions of leaving their jobs,
Source: Harvard Business School
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