Which incentives motivate staff to work harder?

By Clare Bettelley 4th April 2013 5:00 am 3rd November 2015 5:25 pm

The right incentives can motivate employees to put in extra effort for their business.

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McDonald’s incentivised its staff to go that extra mile for the business last year by offering them the chance to work at one of its four sites at the Olympic Park in Stratford, east London, during the London 2012 Olympic and Paralympic Games.

Workers at 1,200 of its UK restaurants nominated their champion employee of the month over 10 months, which, after a number of qualifying stages, resulted in 2,500 staff being selected to work in the Olympic Park.

Of course, such an extravagant incentive was possible for the world’s largest restaurant chain, but what about smaller employers with a smaller, or perhaps no, employee motivation budget? And do employers really need to offer such large-scale incentive programmes to encourage staff to go that extra mile?

Not according to Marcos Costello, marketing executive at eight employee-strong Wright Angle Marketing, who says being made to feel part of a team is what drives him and colleagues to exceed expectations for the business. “Judith, our managing director, takes time to sit down with every team member so that questions can be asked, work can be looked at and goals can be set,” he says.

“We don’t come in at nine and leave at five just for the pay slip at the end of the month. We come in earlier and leave later, when it is needed, to make sure things are up to our high standards. We don’t begrudge doing that because we do it for the reason that we want [the organisation] to be a success.”

Good management

Nick Holley, director of the Centre for HR Excellence at Henley Business School, believes management is key to incentivising staff to go the extra mile. “A good manager can engage people so they want to go the extra mile,” he says. “The question is, what makes a good manager? In our research, what is clear is there isn’t one approach to managing; it needs to be flexed to fit the needs of the individual.”

But professor Shaun Tyson, emeritus professor of human resource management at Cranfield School of Business, says employers need to enable staff to make discretionary effort. “It’s not just what’s in the job description, but what the person is able to do,” he says.

Discretionary effort is central to the motivational theory known as organisational citizenship, which is the extent to which an employee’s voluntary support contributes to their employer’s success. Tyson says this is based on a notion of reciprocity: an employee feels they want to do their best because they feel the employer is interested in them and what they do, and this is evidenced to the employee by how the employer treats them.

Flexible working

Iain McMath, managing director at Sodexo Motivation Solutions, says flexible working is key. “[Employers] can have a situation where they insist [an employee] is in between nine and five,” he says. “They monitor their work and micro-manage them, or they can say ‘we need to achieve this, this is your role in it; how you do that, within reason, is up to you’.

“[Employers] can give staff an environment that says ‘you’ve got flexibility as to how and when you do it’, so people take ownership of their task rather than seeing it as a mundane process and switching off. Once [employers] have that understanding in the business, they can plug in the acknowledgement and rewards. We talk to [employers] a lot about recognition and acknowledgement, rather than just recognition and reward.”

Kuljit Kaur, head of business development at P&MM Employee Benefits, says employers should formalise their recognition process. This enables line managers to see what employees have achieved, and when they have gone the extra mile. “Employees can then be rewarded in front of their peers as someone who has gone above and beyond,” she says.

Get consistency

But Heather Rogers, sales director at Red Letter Days, warns that the success of recognition programmes relies on consistency.

“You will always get managers who naturally reward and those who see everything as part of an employee’s day job. I think the challenge within any business is to get consistency, and the only way [employers] can do that is to drive awareness to managers and embed a recognition culture within the business.”

Henley Business School’s Holley cautions against employers expecting, or even pressurising, employees to repeatedly go the extra mile. “I don’t think this should be encouraged as a matter of course,” he says.

“Simply expecting people to do it all the time is guaranteed to disengage them. There are times when people need to work late or through lunch, but it shouldn’t become the norm.”

Of course, there is a danger of this being the norm in an economic downturn, with staff worried about job security. But Holley says a fear-based working environment generates compliance from staff, not commitment.

Viewpoint: Viki Holton, research fellow, Ashridge Business School

Some organisations know what is important when it comes to employee motivation and engagement. They offer the right salary, more or less, they appreciate staff and make them feel valued; and extra effort is not taken for granted. Compare that to a business where staff feel overworked and underpaid, are micro-managed, unappreciated and, worst of all, the goals keep changing.

The principles of employee engagement are complex. Money is often quoted as being a key factor in motivation and while it does, of course, play a part, many organisations ignore other simple issues that will make a difference. Three of these are outlined briefly below.

First, work content. Interesting and challenging work is important to most staff. Too few organisations ask for feedback, to look at ways to improve what is available, or to let staff know that they are appreciated.

Second, the senior team. Respect for the senior team is a key part of the jigsaw but yet many organisations and HR directors forget how important this link is. If the organisation wants its employees to put in extra effort, it has to show that this is valued, rather than taken for granted.

Third, the relationship with the boss. Someone who is good at motivating others in their team often takes time and effort to support staff. This may differ according to age. For example, a worker in their fifties is likely to have different values from younger, generation Y workers born after 1982. But a good deal of what younger workers want also applies to everyone.

At the heart of this is respect. A good relationship with the boss is important, feeling valued, career development opportunities and knowing how their job contributes to the organisation’s success.

Case study: Mountain climbing builds team spirit at UKFast

There is no limit to the lengths to which Lawrence Jones, founder and chief executive of internet hosting business UKFast, will go to motivate and reward his 200 employees. From an all-expenses paid annual festival for all staff and their families to working breaks in Verbier, Switzerland, and Necker Island in the British Virgin Islands, he spares no expense.

Jones strives to generate loyalty from each employee’s first day at work. He has invested in a hotel in Snowdonia, Wales, where new recruits are taken in their first few weeks for team-building activities such as climbing Mount Snowdon and raft building.

Jones says: “One of the key characteristics [we look for in new recruits] is supportive. Our job [as an internet service provider] is to support people 24 hours a day. When it goes wrong, a lot of people are in a lot of pain and you need to focus on getting people back online, so it is a very intense time.”

UKFast stages events to motivate and reward employees throughout the year. Recently, Jones rented a suite at London’s Mayfair Hotel for two days, during which time employees stayed at the hotel on a rotational basis to attend work-related trade shows and black-tie evening events.

Jones estimates that he invests hundreds of thousands of pounds in motivation and reward-related events each year. “At the end of the day, I am nothing without them,” he says. “I am only as good as the employees around me.

“We have a great time wherever we go, but it’s not just about taking employees on a big jolly. It’s about getting people out of the office to motivate them.”

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For example, a brainstorming event involving all employees in Verbier last year resulted in a redesign of the organisation’s product. “We revolutionalised our business, otherwise there was the danger of having a very tired product in 2013,” says Jones.

“You can do that in your office, but do you get the same loyalty as welcoming employees off the plane and taking them on an experience they would never be able to do in their lives?”