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Do Bonus & Incentives really motivate today's Workforce?

HR professionals and managers often wonder about ways that could help them create a motivated workforce. While some believe that paying more would keep employees motivated, some others vote in favor of recognition, which could be anything from a word of praise to gifts and awards. However, various studies done recently suggest that it’s intrinsic human nature not to be motivated by material rewards for long. Rather, a majority of people have an inclination towards increasing their prestige and power in the corporate hierarchy. Though bonus and incentives still can’t be ruled out as motivating factors, especially in the lower rungs, they can’t work in isolation to keep the workforce happy for long and encourage them to achieve more. Starting from a stable work environment to offering the employees interesting work, granting them chance to learn and further their knowledge base, and giving them due recognition on achieving business objectives – various other factors are at play, which can bring great results when used along with bonuses and incentives.

Changing scenario

In the past, employers often focused on approach of offering external rewards like money, prizes, trips etc. to motivate the workforce. But several leading HR experts believe that bonuses and incentives alone no longer deliver the desired results. These experts advocate the need to consider the changing needs of today’s knowledge-era workforce to bring a balance between intrinsic and extrinsic rewards and incentives.

Need of the hour

Plans of bonuses and incentives today should focus on creating a “total engagement” package that can be customized for a specific workforce so that each employee has something or the other to look forward to. Rather than having a blanket incentive solution for the entire organization, such strategies should encourage better performance and different outcomes. In other words, rewards and incentive programs should become much more focused on individuals and situations. Since each person has different needs and is driven by motivating factors that could differ widely from the others, it seems plausible to use different types of bonus and incentive plans, which work effectively together for the overall benefit of the company. No wonder that strategies today don’t stop at deciding the amount/type of bonuses and incentives. Rather, they consider a much wider kaleidoscope for formulating motivational strategies that act as engagement tools and encourage the employees to stick to the organization and climb the ladder with better performance.

While formulating plans for motivating employees, care should be taken to refrain from implementing strategies that may give rise to bias or discourage employees to perform. For example, setting up incentive plans where the worker earns a fixed base salary but gets the full salary only when s/he achieves certain performance objectives is a bad idea, especially where non-achievable objectives are set. Since such objectives will always seem out of reach of the employees, they will ultimately become discouraged, which in turn will affect their performance adversely and harm the company.

Humans are complex creatures. You can’t define their needs and motivational factors as being purely psychological, economical, or political. Most people have a complex set of desires and needs that include various degrees of materialistic, emotional, social, and political aspects. So, organizations should take various factors into account to motivate their workforce and not focus just on bonuses and incentives.

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