|Title: DUMP THE CASH, LOAD ON THE PRAISE , By: Nelson, Bob, Personnel Journal, 00315745, Jul96, Vol. 75, Issue 7 |
|Database: Business Source Elite |
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|Rewards That Motivate |
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|DUMP THE CASH, LOAD ON THE PRAISE |
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|An employee does a top-notch job with a tricky project and you want to acknowledge her hard work. So what's it going to be? A cash |
|bonus? Author of "1001 Ways to Reward Employees" explains why this actually may demotivate and reinforce the idea that no dollars |
|equals no thanks. |
|Do you think money is the best reward? Many people do. After a recent presentation, I received some interesting feedback. I was |
|discussing what motivates employees today with a management group from a Vancouver manufacturing company. After the session, the |
|person who had invited me to speak pulled me aside. He claimed several people in the group didn't agree with what I said about money: |
|They believed it's the top motivator for their people. |
|A sense of frustration overcame me. My experience has shown that money isn't the main reason people work. Why is it so difficult for |
|managers and business owners to believe this? |
|Certainly the research is convincing. In studies dating back to the 1940s, employees always have ranked other items--such as being |
|shown appreciation for work done, feeling "in" on things and having interesting work--as being more important to them than their |
|salaries. In the "1994 National Study of the Changing Workforce," conducted by the Families and Work Institute in New York City, "open|
|communication" was ranked highest by respondents asked to list items they had considered to be "very important" in choosing their |
|current jobs. Everyone wants to know what's going on--especially as it affects them--so simply sharing information is motivating. |
|Salary was ranked 16th. |
|In a recent national survey conducted by Robert Half International, a staffing and recruitment finn based in Menlo Park, California, |
|"limited praise and recognition" was ranked as the primary reason why employees leave their jobs today--ahead of compensation, limited|
|authority and personality conflicts. Dr. Gerald Graham, professor of management at Wichita State University in Wichita, Kansas, also |
|found that money wasn't a top motivator. In a research study of 1,500 employees in a variety of work settings, personalized, instant |
|recognition from managers was reported to be the most powerful motivator of the 65 potential incentives he evaluated. Second was a |
|letter of praise for good performance written by the manager. |
|Money has its value. I'm not saying money isn't important--clearly it is. We need money to pay our bills and maintain the standard of |
|living to which we're accustomed. I'm also not saying money has no motivational value. It does, and the strength of that motivation |
|will vary throughout a person's life. If you're about to buy a new home, have unexpected medical bills or have children in college, |
|you're going to be more keenly aware of your monetary needs. |
|But for most of us, most of the time, once we're able to meet our monthly expenses, our attention turns to other factors that have |
|much greater significance in our work lives: |
|Feeling we're making a contribution |
|Having a manager who tells us when we do a good job |
|Having the respect of our peers and colleagues |
|Being involved and informed about what's going on in the company |
|Having meaningful, interesting work. |
|Granted, of the 16 employees who report to me, one clearly is motivated primarily by money. When this person finished a significant |
|project for the company, I remember her response when I wanted to do something special to thank her. She told me she didn't want a |
|plaque or an award. As a token of thanks the only thing she desired was a bonus. Since people are motivated by different things, I |
|gave her a bonus. But I also gave her a dozen roses at a company meeting--because recognition isn't just for the person who performed |
|well, it's also a message to other employees about the type of performance that gets noticed in an organization. According to |
|management consultant Rosabeth Moss Kanter, based in Cambridge, Massachusetts: "To the rest of the organization, recognition creates |
|role models and heroes--and communicates the standards: These are the kinds of things that constitute great performance around here." |
|Cash awards have some definite drawbacks. The key point is that the money employees are paid for the job they're hired to do is |
|compensation, which should be a function of a company's compensation philosophy as well as its market and geographic considerations. |
|Increasingly, such economic incentives are becoming rights rather than rewards. In his book "Management: Tasks, Responsibilities, |
|Practices," management guru Peter Drucker of The Claremont Graduate School in Los Angeles points out: "Merit raises always are |
|introduced as rewards for exceptional performance. In no time at all they become a right. To deny a merit raise or to grant only a |
|small one becomes a punishment. The increasing demand for material rewards rapidly is destroying their usefulness as incentives and |
|managerial tools." |
|In some cases, cash awards even have been found to have a demotivating effect. Cecil Hill, corporate manager of improvement programs |
|at Hughes Aircraft Co. based in Los Angeles, claims in a Spring 1989 article in National Productivity Review: "I have found that |
|certain aspects of the cash awards approach would be counterproductive at Hughes Aircraft. For example, cash awards would reduce |
|teamwork as employees concentrated primarily on individual cash gains. We also have found instances in which 'pay' for certain types |
|of intellectual performance tends to denigrate the performance." In short, cash awards seemed to have a demotivating effect overall. |
|Recognition boosts employees' esteem and performance. Recognition, on the other hand, is what you do above and beyond what people are |
|paid to get the best effort from employees. "Compensation is a right, recognition is a gift," Kanter points out. "Recognition has |
|multiple functions beyond simple human courtesy. To the employee, recognition signifies that someone notices and someone cares. What's|
|the point of going all out to do something special if no one notices and it doesn't seem to make a writ of difference?" |
|To illustrate the power of recognition on individual behavior, Daniel Boyle, vice president and treasurer of Diamond Fiber Products |
|Inc. in Thorndike, Massachusetts, tells an anecdote in a Harvard Business Review March-April 1987 article. The story relates the |
|impact on an employee when she was presented with a nylon and cotton jacket as a special employee recognition reward called "The 100 |
|Club." "You might think this is a trivial thing, but it means a lot to the people who earn a jacket. A teller at a local bank told me |
|once that a woman came in and proudly modeled her bay blue 100 Club jacket for bank customers and employees. She said, 'My employer |
|gave me this for doing a good job. It's the first time in the 18 years I've been there they've recognized the things I do every day.' |
|During those years she'd earned $230,000 in wages, which had paid for cars, a home mortgage, food, other essentials, vacations, |
|college educations. In her mind, she'd provided a service for her earnings. The money wasn't recognition for her work, but the 100 |
|Club jacket was. |
|Salary alone isn't a motivator. You might wonder why salaries aren't enough to encourage employees to do their jobs. Why do you have |
|to do more? People will do their jobs for what they're paid, but money will do little to get them to do their best work or to go above|
|and beyond what you expect of them. That extra effort is more a function of how they're treated--the softer side of management--not |
|what they're paid. In the work of management theorist Frederick Herzberg, a fair salary is considered a "hygiene" factor--something |
|people need as an incentive to do the jobs they're hired to do. Hygiene factors include adequate work space, light and heat, and |
|necessary tools such as a computer or telephone. Without any of these items, employees will be demotivated and unable to do their |
|jobs. Having all of these items, however, will enable employees to do their jobs but will do nothing to help them do the best job |
|possible. Getting people to do their best work is more a function of what Herzberg calls "motivators." These include praise and |
|recognition, challenging work, and growth and development opportunities. |
|Paul M. Cook, founder and CEO of Raychem Corp. based in Menlo Park, California, agrees with this belief: "The most important factor is|
|individual recognition--more important than salaries, bonuses or promotions. Most people, whether they're engineers, business managers|
|or machine operators, want to be creative. They want to identify with the success of their profession and their organization. They |
|want to contribute to giving society more comfort, better health, more excitement. And their greatest reward is receiving |
|acknowledgment that they did contribute to making something meaningful happen." |
|So, as people sometimes ask me, "If money isn't a top motivator, then why is it all I seem to hear about from my employees?" I've had |
|a chance to examine this question firsthand in several companies and have found a couple of explanations: |
|In some working environments, people are doing jobs they don't enjoy for managers who never show their appreciation. These employees |
|conclude that if this is what it's like to work here, at least they ought to be paid well. Money thus becomes a psychological exchange|
|for enduring a miserable job. |
|In other companies I've found that managers only use money to thank people--for example, bonuses for completing projects, on-the-spot |
|cash awards for desired behavior or an extra percentage in the employees' annual salary increase. Unintentionally, these managers send|
|the message to employees that unless you get cash, your contribution to the company isn't important. Essentially, they train employees|
|to expect cash as the only true form of thanks. |
|It's true some people directly correlate the amount of money they earn with their perceived worth to the organization. You need to be |
|careful, however, that you don't just respond to those individuals who constantly ask for more money, since you need to reinforce |
|results, not requests. Also realize that you'll never get the best effort from employees just by paying them more. For employees who |
|just want more money, they'll never be satisfied with what they're paid. Their expectations always will rise with each salary |
|increase. |
|Realizing that money is a basic need, managers might wonder if employees must be paid well before the nonmonetary factors become |
|motivating, This question came up during a conference keynote presentation I was giving, and I was delighted to have another member of|
|the audience interject his experience. He found that by using positive reinforcement he was able to increase the level of performance |
|of his employees, leading to increased sales revenue, which ultimately made it possible to pay people better. In other words, the use |
|of nonmonetary incentives allowed the boat to rise financially for everyone. |
|Motivation is its own reward. Another way to look at the relation between money and motivation is that while on any given day most of |
|us can't significantly influence what we earn, a lot of things can have an effect on how excited and motivated we are about our jobs |
|each day. How employees are treated by their managers is paramount to having them come to work energized and committed, bringing their|
|best thinking and initiative to the job. The daily interactions management has with employees serve to either build and develop the |
|trust and respect of employees, or to hinder and erode those factors. According to Donald Petersen, president and CEO of Ford Motor |
|Co. in Dearborn, Michigan: "The leader needs to be in touch with the employees and to communicate with them on a daily basis." |
|Ways to enhance this communication within an organization are endless. For example, each morning at Precision Metalcraft in Winnipeg, |
|Manitoba in Canada, management holds huddles to pass out the days' work assignments. The huddles end in a cheer as people disperse to |
|get to work. Security Pacific Corp. of Los Angeles has a Question Line with a toll-free number to respond to employees' job-related |
|problems and questions. And all Washington, D.C.based Knight-Ridder publications have management coffee breaks, during which each |
|publisher meets with 20 to 25 employees for an hour and a half over coffee. Employees can send questions in advance. |
|The focus of work used to be on renting employee behavior. In fact, in some work environments people even were referred to as "hired |
|hands." Today, it's insufficient to simply rent the behavior you want from employees--you've got to find a way to elicit their best |
|effort. To be competitive, each company needs to obtain extraordinary results from ordinary people. You have to make employees feel |
|valued so they want to do their best work on a daily basis and to consistently act in the best interests of the organization. You can |
|achieve this enhanced level of energy and initiative by focusing more on how you treat employees rather than how much more you will |
|pay them. For the best results, pay them fairly, but treat them superbly. |
|To receive: "How to Praise Effectively," a one-page list of the key characteristic of this effective, no-cost form of recognition, |
|please complete the Business Center card included in this issue and completely darken box number 153. |
|For information on ordering reprints of this article, please see page 8. |
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|By Bob Nelson |
|Bob Nelson is vice president of Blanchard Training and Development Inc. in San Diego and author of "1001 Ways to Reward Employees" |
|(Workman Publishing)--now in its 14th printing. E-mail jenj23@aol.com to comment. |
|TOP TEN WAYS TO MOTIVATE TODAY'S EMPLOYEES |
|Today's employees may not need a pay raise as much as they need a personal thanks from their manager for a job well done. Following, |
|in priority order, is the top-ten things to do to motivate today's employees. |
|Personally thank employees for doing a good job--one on one--verbally, in writing or both. Do it in a timely manner, often and |
|sincerely. |
|Be willing to take the time to meet with and listen to employees--as much as they need or want. |
|Provide specific feedback about performance of the person, the department and the organization. |
|Strive to create a work environment that is open, trusting and fun. Encourage new ideas and initiative. |
|Provide information about how the company makes and loses money, upcoming products, strategies for competing in the marketplace and |
|how the parson fits in with the overall plan. |
|Involve employees in decisions, especially when those decisions affect them. |
|Provide employees with a sense of ownership in their work and the work environment. |
|Recognize, reward and promote people based on their performance. Deal with low and marginal performers so they either improve or |
|leave. |
|Give people a chance to grow and learn new skills. Show them how you can help them meet their goals within the context of meeting the |
|organization's goals. Create a partnership with each employee. |
|Celebrate successes--of the company, of the department and of individuals in it. Take time for team- and morale-building meetings and |
|activities. |
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|By Bob Nelson |