Science has proved that monetary rewards to top performers actually leads them to worse performance! And bonuses certainly don’t work if you want to encourage creativity and innovation. What works best is recognition and allowing people to learn, have individual goals and work on projects that they really care about and can focus on.
Obviously this is very different to how most organisations run their rewards and bonus schemes, but it may highlight some of the issues we’ve seen recently where money has mattered more than results. We need to now consider the science to help people excel – pay enough so that money isn’t an issue, and then give your employees high recognition, the chance to branch out on their own and the opportunity to learn and grow. Have a look at the video by RSA which talks about the research that shows how this is true.
Additionally, a McKinsey global survey on cash as a motivator found that while performance-based cash bonuses were used frequently (68 percent of respondents), employees still viewed “praise and commendation from their immediate manager” as being more effective than cash. And of the list of HR Solutions’ Top 10 Engagement Drivers, recognition was number one.
If you have a strong team, who are learning and growing, the benefits to the organisation should be easy to see.
Employees want management who lead by example and bring meaning and direction to the team’s work, using their leadership skills to help every team member to continuously improve by providing tools, training, techniques and opportunities to take the initiative and achieve successful results.
Can you think of ways that you can use the creativity of your team members, and give them the chance to put their ideas into practice? Employees want to be intellectually challenged and to be able to take ownership for their work. So give them the opportunity, and remember to provide them with accurate and timely feedback.