How to motivate employees with Financial Rewards
In developing approaches to motivate employees, managers should focus mainly on financial rewards
It is a very difficult task for managers to develop methods and strategies to motivate employees. However, when they are focussed on the right techniques and information, then their task becomes pretty easy. Motivation is an integral part of the performance of employees. But the most important question is how to motivate your employees and how to devise the strategies. Also, the main question comes to mind that what strategies are needed to be devised for increasing the performance of employees.
EMPLOYEE MOTIVATION QUOTES
“Ability is what you’re capable of doing. Motivation determines what you do. Attitude determines how well you do it.” – Lou Holtz
“Let me tell you the secret that has led me to my goals: my strength lies solely in my tenacity.” – Louis Pasteur
Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.
– Steve Jobs
However, human behavior is very complex and before making any plans, it is quite important to know what motivates the employees. Although, employees get motivated with both non-financial and financial rewards but lack of financial motivating factors will lead to the negative performance of the employees. The negative performance of employees will result in low productivity and loss to the company. Hence, the managers must focus to enhance motivation by using the strategy of financial rewards.
EMPLOYEE MOTIVATION STRATEGIES
The managers must involve all employees in strategizing, implementation and revision of various reward programs. The involvement of employees will encourage communication between management and employees. It is very important for managers that employees must value the financial reward system. The employees who look the rewards worthy are more motivated to work and perform better than others.
Managers must clearly convey how employees can earn rewards. When the employees have a better understanding of the expectations of management then they will be able to achieve the desired results and performance standards. Also, it is the duty of managers to see that the rewards are attainable. Also, make sure that the employees believe that these financial rewards are achievable within their capability. You must also provide a dashboard to the employees where they can analyze their performance and enable them to rectify them.
The rewards must be distributed on the objective data. Here, employees view the procedure as fair and have more probability to develop a concrete understanding of the desired expectations. This approach will enhance the motivation to accomplish the desired results and performance.
The financial reward system must be fair enough in order to achieve the reward. Moreover, rewards must be distributed thoroughly as per the policies. Managers must take into consideration that they must never get engaged in any kind of favoritism.
The financial reward system should be directly associated with the desired behavior of the employees. When employees comprehend the link between the reward and performance then they feel more motivated to perform in the future. You must devise strategies that could recognize large and small accomplishments.
EMPLOYEE MOTIVATION MANAGEMENT
You must also form team-based financial reward programs that will help to increase the performance of the team members. The financial reward system must have a positive impact on employee cohesiveness, cooperation, and the company’s performance. Also, don’t forget to acknowledge individual performance in the team.
Furthermore, you must immediately reward employees as if there is a delay in recognizing the achievement then there is less impact in shaping the desired behavior of the employee. Moreover, you must allow the employees to choose their own financial rewards. By doing this, they will be more committed to achieving the desired results and behavior.
The financial rewards must include both non-monetary and monetary rewards as it poses a huge impact on the performance of employees. You can also pay cash to motivate the employee. Also, as a manager, you must not disclose the amount of cash as employees feel more motivated when the amount is not disclosed. Also, devise the strategy for long term reward strategies.
FINANCIAL REWARDS FOR EMPLOYEE MOTIVATION
There are many types of financial rewards that will motivate employees to enhance and improving performance. The financial rewards are monetary and are something extra than the monthly salary. Some of the financial reward options are discussed below that can be considered by managers to device various programs to motivate employees
- Allowances and pay – Salary is a basic thing that is received by every employee. The salary also consists of traveling allowance, dearness allowance, and other allowances. It contains a regular increment in the salary each year and also increases in allowances.
- Wage incentives linked to productivity – The wage incentives plan is linked with the wages to enhance the performance at the group or individual level. The quantum is on the basis of real output.
- Bonus – This is the incentive that is offered above the wages or salary of the employees. Many multinational and corporate companies provide a bonus at the time of various festivals such and Diwali or New year.
- Sharing of profit – It consists of providing a share to the employees in the profit-making company. This strategy helps to increase the productivity of employees so that they can contribute to the maximum efforts to enhance the profits.
- Stock option or co-partnership – In this financial reward program, employees offer share on a price that is lower as compared to the market price. This strategy helps to create ownership feelings in the employees. It also encourages them to give their maximum effort to the growth of the organization.
- Retirement benefits – There are many retirement benefits like the fund, pension, the provident fund that can be given to employees at the time of their service to the company.
- Perquisites – Many fringe benefits and perquisites like housing, car allowance, medical aid, and children’s education are provided or offered by many companies above the salary. All these benefits help the employees to get motivated and work at their maximum capacity to improve the performance organization.
Hence, financial reward programs have more probability to increase the productivity or performance of employees. It also increases employee loyalty toward the company. But as a manager, you must make them clearly understood the basic criteria of receiving these financial rewards. You must also make them understand how they are calculated and analyzed. Hence, devise financial reward programs to motivate your employees.
Author: Priyanka Joshi
News Reporter & Anchor for Aaj Tak regional channels – LinkedIn profile