A pay rise is not the only way to increase productivity. Anyone running a business knows the importance of recognising the value of their employees and a pay rise is certainly appreciated, however, the thrill of a pay rise will have a motivational effect for about 6 weeks and loses its shine after tax deductions and household bills gobble up the perceived benefit.
A Harvard field study in 2013 demonstrated that companies need to consider factors other than a pay rise when motivating employees. Non-monetary incentives such as recognition, respect, autonomy, can be powerful motivators of behaviours in the workplace.
Indeed, the Harvard study tested the performance of a “gift group” of workers compared to a “pay rise” group and found that the gift group performed better than 20% in productivity. An additional insight from the study found that the gift group maintained better focus and out performed the pay rise group. The overall conclusion of the study comparing hourly pay rate increase versus gifting was that human beings work hard not simply because of financial incentive, but a whole host of other factors.
Whether you are a small company with limited capital, or a thriving multinational the question as to how you keep your staff satisfied and productive is not necessarily in pay rises. Here are five non-monetary reward options to consider to motivate your staff and boost employee retention.
Set a project which involves a personal interest for the employee. Sometimes, giving time to undertake a task in another department while still maintaining their own position gives interest and variation.
For team motivation, you might consider hosting a musical entertainment evening in the office with refreshments, or book a Happy Hour venue on an off-peak evening.
Job location swaps can be a refreshing change for an employee and have the benefit of sharing what star performance looks like to another branch.
Industry development programs can be a valuable incentivisation helping an employee to grow and develop further skills while the company benefits through continuing education.
Giving a voucher for an event or evening class personal to an individual’s interest, such as the latest show or sport event is a significant motivator.
The best rewards are based on an individual employee’s personality and interests. A manager working closely with their team will know the individual interests and what will be appreciated such as sport, films, music and restaurants. The key is to keep the reward personal.
Under the Small Benefits Exemption Scheme, directors and employees can receive a non-cash bonus of up to €500 (previously €250) in value on a completely tax-free basis each year. The benefit cannot be cash as cash payments are fully taxable.
The recent increase in non-cash bonus allows employers to reward star employees without permanently increasing the business overheads.
Christmas gifts lift the spirit of all employees and marks the end of a productive year. The perfect time to give staff both recognition and appreciation for hard work and going the extra miles. A thoughtful selection of luxury items, from a decadent and festive hamper is a memorable and appreciated gift and demonstrates how much you value your team.
Gifting employees raises morale, improves productivity and loyalty while not weighing long term on the business overheads.
Article by Debbie Meadows – August 2017