Reward Strategy - what it takes to motivate and encourage your staff
How
do you attract and keep high quality staff?
What mechanisms help in recruitment, retention, engagement and
development of employees so that they perform and deliver at their highest
potential and therefore make the organisation successful?
The
first question to ask is: what motivates people to work? Why spend time and talent in the service of
an organisation, even if its your own organisation when self-employed? Because there is some ?reward’ to do so.
At
face value, people work because they gain an income to spend on their
individual, family and community needs.
Some needs are the essentials of life, what humans needs to survive
physiologically. Maslow defined the
hierarchy of needs with fundamental physiological needs at the base and rising
through safety, social needs and culminating in the need for
self-fulfilment. Herzberg distinguished
between firstly ?hygiene’ extrinsic factors such as pay and organisation policy
and procedures that will cause dissatisfaction in the workplace if absent or insufficient. Secondly, ?satisfiers’ which are intrinsic
factors such as the ?value’ of the work, achievement, recognition,
responsibility and potential for growth which will positively motivate people.
Since
Maslow and Herzberg were published over 50 years ago, other theories of
motivation have been developed. These
tend to centre on cognitive or process theories ? how people think about their
?reward’. Expectancy theory identifies
two factors of value and probability.
People value reward in terms of how well it satisfies their needs of
security, social esteem, fulfilment and autonomy. Inevitably people value different elements
differently, which suggests reward must include a mix. Expectancy is the probability that reward
depends on effort ? the more effort, the higher the reward. For that effort to be helpful to the
organisation, individuals needs to have the appropriate ability and the correct
perception of their role. This
emphasises the need for clear role definitions and understanding, effective
learning and development interventions and a link between performance and
reward (not necessarily performance related ?pay’).
Two
other theories of motivation are important to consider. One is goal theory as developed by Latham and
Locke which states that both performance and motivation are higher if mutually
agreed, challenging and monitored goals are set and feedback given on
achievements. The second is Equity
Theory which suggests that people are more motivated when they are treated
equitably and demotivated if they receive or perceive inequitable
treatment. This connects to the
?felt-fair’ concept that pay systems are fair if they are felt to be fair.
Extensive
research and studies on reward strategy has shown that people are complicated
and motivation is a complex process.
What is clear is that while financial reward is important, for most
people other factors are also, and can be more, important. These can be brought together under three
sections:
- Equity ? the
perception of being treated fairly both in comparison to others and in terms of
the effort and skills brought to the role - Self-fulfilment ?
that people are recognised for what they do and encouraged to reach their
potential through effective learning and development processes and given feedback
on their performance - Organisation
culture ? roles are clear and organisational and personal values are in
alignment so that employees engage and enjoy work (as much as is possible)
Another
way to consider the necessary components of rewarding people is to view them as
individuals, within their team, in the organisation and generally in the
workplace:-
- Recognition ?
being appreciated, not taken for granted, having a voice - Work/life balance
? accepting and encouraging that there is a world beyond the workplace - Organisational
culture ? being able to engage and fit with the organisation in terms of its
values and how things are done - Employee
development ? being enabled to develop personal skills and understanding for
current and potential future work - Environment ?
having a ?good place’ to work in terms of physical layout, equipment, health
and safety and security
‘Total reward’
addresses this complexity in bringing together financial aspects of reward of
basic pay, any bonuses and additional financial benefits with the non-financial
benefits at the personal and organisational level. This is a helpful concept, especially because
it acknowledges the limits of purely financial reward and identifies other
areas that can be addressed, in particular when salary budgets are limited for
economic or values reasons.
Depending
on the organisational context and values , not all elements as described in the
diagram above will apply. However it
neatly differentiates between financial and non-financial rewards and between
total remuneration and total reward.
Reward
is more than pay and benefits. Therefore
a reward strategy must consider many aspects of the workplace in order to both
attract and keep high quality people doing the right things in the right way so
that they flourish and the organisation is successful.
About the author
View the original article in context in the 3D HR website (http://hr-adviser.co.uk/HR-Guidance-sheets/reward-motivation.html)
Peter writes a monthly comment on people management issues in his blog Flourishing People
Tags: achievement recognition, autonomy, dissatisfaction, expectancy theory, face value, hierarchy of needs, high quality, hygiene, individual family, intrinsic factors, maslow and herzberg, mechanisms, physiological needs, policy and procedures, probability, quality staff, recruitment retention, self fulfilment, theories of motivation, what motivates people