If you are looking to motivate your employees, then the biggest contributing factor to positively influence that is to ensure that your employees are enjoying their jobs. Current research shows that 59% of employees rated job enjoyment as a top three motivator, but, interestingly, only 13% - a surprisingly low number – of employees said that they are motivated by a bonus.
In the case where money is almost seemingly no object though, then what can an employer do to ensure their staff are motivated enough? And can something like a bonus still be used in some way to ensure higher performance and happier employees?
Although not a top priority, financial incentives more generally are still a key motivator for many people and so this should not be ignored – as base salary and employee benefits come in at a close second behind enjoyment at work. It seems that this is particularly true for those employees under the age of 30, with over half indicating that a financial incentive is very important to them. This shows us something important – that money is a strong motivator but bonuses are not, and this means that there is clearly something wrong with bonus delivery and design within organisations.
Perhaps this is due to the common approach to bonus management by many organisations which is to award a flat percentage pay out based on whether organisational targets are met. The issue with this is often that employees fail to really understand the value of what their work has contributed towards that end goal. This can lead to disengagement and often employees will feel like their actions don’t really contribute to the bigger picture.
Research has shown that how staff are treated by their employers as well as the relationships they form with their colleagues are actually far more effective motivators of a workforce than a performance bonus. So considering this factor alone, it would seem obvious then that a key way in to improving performance of employees and using a bonus as an incentive would be to somehow combine aspects such as social relationships with colleagues into bonus pay-outs.
Without needing to move completely away from the annual bonus design, there are still many ways that organisations can further motivate employees through their bonuses. These include:
1. Colleague recognition system
With the relationships formed between colleagues such a highly ranked motivator, it makes sense to tie this together with bonus to reinforce and develop this further. If employees had tools or systems that allow them the ability to thank a colleague for help on a project or going that extra mile on some research, with something as small as a £10 voucher for a local shop, this kind of activity really resonates with employees and allows them to feel continually recognised.
2. Target driven bonus
This approach is often taken by organisations with a bonus design dependant on company profit targets, but this can leave people feeling like they aren’t making a difference. If this is the way you need to set up your bonus management then consider that employees need to see how they’re contributing, and they need to see this on a regular basis. Employees who can see they’re making a difference are further motivated to reach the next milestone, and it’s a ‘win win’ for both employee and employer. Simply put, achievable targets which clearly show how they tie in to the bigger picture for staff promote a driven workforce. This can be done in creative ways too, such as having a special awards ceremony with awards for areas such as ‘innovative new products’ or ‘production goals met’. Having a carrot to chase works wonders.
3. Don’t over complicate
This is a phrase which is commonly used when discussing bonus and yet equally it seems to be quickly forgotten. When trying to create a bonus scheme fit for an entire organisation, it can be hard to stay true to keeping it simple, but this is key if you are going to make sure that everyone understands what they are working towards. This is really at the heart of making any bonus scheme effective. It’s also important to make sure that the rules don’t change at random intervals and to deliver on bonuses promptly. This goes a long way with showing employees that hard work is rewarded.
So, the fundamentals behind using bonuses to the greatest effect revolve around making sure your workforce is engaged, motivated and feels rewarded for the work they do.
The overall thing to consider when designing your bonus scheme for your people is that bonuses should never be just something that is awarded each year based on if the company reaches certain targets alone. Context is everything. And your people should have something that they can work towards, both individually and as a collective, feel proud when they achieve it, and know that they have made a difference both day to day and into the future.
If you need help designing or challenging your bonus management structure, our team of experts at Innecto can help. Get in touch with us on 020 3457 0894 for more information.
