Why companies around the world are cutting back on their financial-incentive or reward programmes? Why they have been looking out for some other techniques to inspire and motivate their employees? Is it economic slump or something else?
Well, it has been revealed that employees who have achieved a financial stability to some extent require non-financial motivators that can offer them freedom to take their work-related decision, let them feel accountable for whatever they do, inspire them to take up challenges and enhance their overall personality.
People with satisfactory salaries along with few perks look for non-monetary initiatives from the organisation that can help them acquire new skills in professional contexts. Indeed, organisations need to focus more on balancing the financial and nonfinancial motivators. Short-term rewards can boost their energy and motivate them to perform their jobs in the best possible manner whereas long-term benefits help them retain in the organisation for long.
The various studies conducted by global management consulting firms have revealed that after financial incentives, the second biggest motivators are praise from the immediate supervisors and managers, an opportunity to lead a particular task or responsibility and attention from top management.
Non-financial motivators can be more effective for a certain set of employees but the importance of financial incentives cannot be understated. They are equally important. In such a scenario, management should try and establish custom made perks and motivators to enhance employee engagement.
As there are different types of individuals working in the organisation who have different needs and ways to weigh their motivators. Some look for more and more money while some for other things related to their professional and personal development. Motivating employees in the short run is not a big deal what is more challenging is to make them to stay in the organisation.
Strong talent management and establishing a balanced incentive programme are required to retain people and enhance their involvement, engagement and satisfaction level. According to a McKinsey Survey, employee motivation and engagement is sagging tremendously in companies around the globe. They make frequent job switches. This has compelled more than 70 percent of the organisations to adjust their motivation and reward programmes. They have cited that dropping employee motivation is the main reason behind the alteration and modification of their reward and motivation strategies.
In this economic slump, when it is hard to find cash, organisations need to rework on their strategies to cut back on financial-incentives. Understanding the needs of employees can also help them restructure their policies. In order to win commitment from the managers, companies need to have non-financial motivators such as delegating the responsibility, autonomy to make decisions and support from management in case they are going through a bad phase in their personal life.
For low level managers and bottom-line employees, financial incentives certainly matter a lot. The HR people should design such a system that they can make the best of the incentives they receive from the company. Besides this, several other programs to help them in financial crisis can be a great idea. Opening a school for their children supporting free or subsidised education can be one of the initiatives to make them stay with the organisation.