Incentives Expert Q & A: How to Motivate Employees When Money is Tight

Incentives Expert Q & A: How to Motivate Employees When Money is Tight by Jen Hickey.

To get some ideas on how small business owners can motivate workers when cash is in short supply, business writer Jen Hickey spoke with Cindy Ventrice, the author of Make Their Day: Employee Recognition that Works and president of Potential Unlimited, which offers consulting, speaking and training to help companies create a positive work environment.

JH: How do “recognition” and “reward” function in the workplace?

CV: Recognition is an act between two people. It’s a one-on-one interaction between manager and employee that demonstrates “we value you.”  It has an emotional component with lasting value. A reward is a tangible gift for something an employee accomplishes. Rewards are great if they’re tied to recognition. Giving a reward meant to act as recognition is much more short lived.

JH: What are some examples of recognition?

CV: From research I’ve done asking employees about memorable recognition experience, I’ve found it breaks down into four elements:

  • Praise: Giving employees positive feedback for the work they’re doing.
  • Appreciation: Thanking an employee for his/her efforts. This is not as performance-based as praise.
  • Respect: This element must always be present for recognition to take place.  Without respect, praise and appreciation won’t work.
  • Opportunity: Find something that employee wants to learn and give them the opportunity to do that (e.g., special project, challenging assignment).

I’ve experienced a lot of push back from managers who think their employees are too busy and will not see an opportunity for a new project or special assignment as a form of recognition. Employees want their manager to know what’s important to them and to provide them with the opportunities to grow. It shows how well they’re valued.

JH: Why is it important to incorporate recognition into incentives?

CV: An incentive is neither recognition nor reward, but you can add recognition to the delivery of an incentive. An incentive is meant to encourage a certain kind behavior (e.g. getaway trip for top sales), whereas a reward is something given after the fact in appreciation for certain behavior a manager wants to reinforce but did not necessarily promise ahead of time (e.g., a 10-year anniversary gift). Both incentives and rewards have more value when given with recognition. It’s important to find out what an employee has contributed to the organization before giving a tangible reward/incentive.

PQ_QAcindyventrice.jpgJH: What type of nonmonetary reward/recognition can a small business owner offer employees?

CV: Low-cost recognition and rewards have proven to be very effective. Through employee surveys, I’ve found that 57 percent of meaningful recognition had no cost. Hand-written notes can be very powerful. People tend to hold onto them for many years and look back to them for encouragement. Other examples include keeping a white board in the break room for employees to write messages of encouragement or celebrate successes, remembering details about an employee’s project, and symbolic awards. Offering flextime or telecommuting could be an incentive or reward. This requires a certain amount of responsibility on an employee’s part, and a manager may want to set some parameters before offering such incentives.

A good manager knows what’s important to the individual and has tailored rewards to match. Flex-time/telecommuting is a great incentive for those in the back office, but may not work for an employee who needs to meet face to face frequently with customers. A manager must know his/her employees to tailor rewards to an individual’s needs/preferences.

JH: What are some concrete steps a business can take to foster inherent recognition in the workplace?

CV: Showing support and acknowledging employee efforts build inherent recognition in the workplace. Employees see recognition from their manager even when it’s not the original intent if a respectful work environment exists. The same goes at the organizational level.

A good starting point for a company is to look at its policies/procedures for anything that may create a disrespectful work environment. Conduct an anonymous survey among employees to identify patterns of perceived distrust.

Often times, a manager or organization is unaware of negative messages they’re sending. Saying “we value your opinion” and then not acting on or even acknowledging suggestions made or doing anything that says “we don’t trust you” can have a detrimental effect on recognition.

For example, I worked with a company that installed a key card system for security but employees thought it was to track their coming and going. Good communication was needed to clear this up. It’s important to have these conversations to determine what can be done to foster an environment of trust in the workplace.

Recognition can also come from a business’ standing in the community. A business known for its charitable efforts can foster inherent recognition in the workplace. Ask employees to pick a charity and give them company time off to participate. Positive public relations can provide recognition to employees, and a positive reputation tends to bring in higher caliber employees.

Offering training or classes can be an inexpensive way to show employees they’re valued. For example, I worked with a company that offered English classes to employees who were mostly Spanish-speaking.

JH: Explain the difference between tangible and intangible incentives, and which tend to be better motivators?

CV: A tangible incentive is something that can be held in your hand or put into a bank account. Time off is considered semi-tangible, as it can’t be held but can be measured. Praise, appreciation and respect are intangible incentives.

Refusing to let someone telecommute when work can easily be done from home or falling below industry standard for pay and benefits can be de-motivators. If your business can’t afford to offer paid time off, you must work extremely hard to find incentives to offset this.

For example, a company with a lot of students could offer unpaid time off for studying for exams. Or one with a lot of employees with school-age children could offer flextime or to work from home when a child’s sick.

JH: Why is it important to help employees identify their purpose in the workplace?

CV: Every employee should understand how he or she contributes to the company’s success. In a small business, it is much easier to connect employees to what they do and how they contribute to a company’s success.  It’s one of the greatest strengths of small businesses, and why so many people love to work for them. Employees can see how they make a difference and have far more opportunities to build skills.

Think of each employee as cast members in a play. Production suffers if not every member—from the main characters to the stagehands—is performing his/her role well. This puts people with different responsibilities on equal footing.

It’s important to create a narrative for your business and tie that back to what each employee does. Encourage pride among employees for each part they play in bringing your products or services to customers.

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