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Why Extrinsic Motivation isn’t the Best Tool You Have

Why Extrinsic Motivation isn’t the Best Tool You Have

In any business, regardless of size and stature, it’s critical to have the right people on board – inherently, the ‘high performers’.  Often these people are naturally driven and refuse to perform at anything less than their optimum level, even in difficult circumstances and with challenging tasks. While they recognise their worth and command a salary that compensates their experience and workload, they don’t necessarily need to be cajoled along with regular extrinsic motivation.

However in reality, a workforce is often made up of ‘average’ employees and speckled with the top performers. For these employees, a salary needs to be boosted with extrinsic motivation because the reality is that we work harder for rewards, and if we believe there is going to be a penalty for poor performance. Despite the volatile landscape of recent economic times, where simply keeping a stable job was a major concern – companies still have the need to motivate their people to perform at a consistently high level.

Money is a key motivator when it comes to changing behaviour, and a lot of businesses operate bonus schemes; but a problem arises when the compensation appears as a one-off prospect. Once the bonus, or compensation is received, the motivation is quickly forgotten and productivity can return to previously mediocre, or low levels. The amount that is being offered is of course a priority, studies show that in order to act as a motivator, it must be at least 10% of an employee’s base salary.

A recent UK Reward Survey by Paydata found that 57% of the organisations that took part, expected the number of people receiving bonuses this year to be unchanged from 2016. The report shows that it is the most senior positons that are attracting the highest bonuses – a potentially inflammatory statistic.

Peter Brown, a Senior Consultant with the company explains further, “A future edition of the survey may well look at another cause célèbre of Theresa May’s government – the fairness or otherwise of Chief Executives’ pay. Like gender pay reporting that issue looks set to give rise to a new set of concerns and questions.”

While money is important to us all, we also crave more than financial compensation alone. Employees ALL desire to be recognised as contributors to a successful team or business; they want to be informed that their work and effort is contributing to the success of a business, above all, they want to be recognised and valued.

It’s important that success is celebrated, regardless of how small you personally deem it to be. If an employee’s work has resulted in a positive – this should be recognised. If a business has been previously underperforming, but has begun to move forward and make progress, the commitment and progress of all involved should be acknowledged.

This isn’t about pandering to the so-called belief that Millennials need a ‘medal’ for every task completed, regardless of the standard. It’s about removing the robotic processes that we often see in business and going to back to recognising that we are all emotional beings and that appreciation is a fundamental human need. It’s worth recognising that there is a detailed psychology behind praising employees that business leaders should understand. Employee recognition is a powerful communication technique, yet, remains undervalued. Recognising good work sends an effective message to the employee, their colleagues through the ‘grapevine’ and also through traditional, formal communication channels.

While, rewarding great work with monetary compensation is the most common method used, taking the time and effort to simply say ‘thankyou’ holds great value. Often, employees are only exclusively spoken to when an error has been made or to discuss routine performance plans. A well-timed recognition at a company meeting will go far when it comes to making employees feel valued and in turn, achieve and maintain high levels of motivation and productivity.

While recognition and praise is encouraged, it’s important to reinforce the expectations and communicate that there are consequences for poor performance. It’s vital that you investigate the underlying reasons for the poor performance, ultimately it will come down to ability or motivation; if you don’t identify the area causing the issue than the increase of pressure applied onto the employee could result in further damage.

The IES Employment Studies Report on Tackling Poor Performance states, “Employees need to know what constitutes an acceptable level of performance, below which their organisation will consider their performance is wanting. This is not so easy when we look at the variety of messages that they may receive from their employers about performance requirements. Given that these often conflict, it may be difficult for an individual to have a clear view of what is meant by acceptable. The onus, is therefore on line-managers to install some much-needed clarity, and on both parties to agree a standard of performance as well as the targets to be delivered.”

If your change in motivational tactics are not seeing an improvement, then it could be down to ability. Does the employee need to be retrained? Do they have the right level of support – or are they in the right role?

It’s true to say that you will find those high-performing employees that don’t need to be consistently motivated – the superstars. The superstar employees come at a price that most small businesses simply can’t afford. So, to command superior performance its worth doing a ‘deep-dive’ into your leadership style and the emphasis that you place on recognition and reward. Making motivation a priority within the business will mean that the need to resort to money will significantly reduce – making you more profitable.

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