Great Ideas for your Small Business: Offer Employees the Right Incentives
If you think glitzy trips to atlantic city or Las Vegas are great sales motivators for your employees, think again. When offered the choice between a trip or money, 44 percent of the employees polled preferred the financial reward, while 39 percent said they would take a trip by themselves or with a family member.
Only 5 percent would choose to take a trip with coworkers, according to a survey commissioned by American Express Gift Cheques, Amex’s gift certificate division.
A $50 gift certificate is preferred by a four-to-one margin over any other type of monetary appreciation, the survey also found. Only 14 percent of respondents preferred $50 worth of tickets to a concert, show, or sporting event, and fewer than one in ten wanted to be treated to a lunch worth $50.
But cash rewards, in the long run, may not be enough to keep employees satisfied. “Money is a powerful incentive, but it has its limitations if it’s the only incentive,” said Dr. Barrie Greiff, a psychiatrist consultant at Harvard University Health Services in Cambridge, Massachusetts, who consults with big and small companies. “You have to make sure there are more than economic rewards and that people are challenged,” Greiff said, adding that if you do decide to give a monetary reward, try a gift certificate, because cash is “just spent at the supermarket.” Greiff said taking time to express your appreciation for a job well done means a lot more than money to many employees.
He said too many employers are reluctant to express their feelings to employees, whether they are positive or negative. “It takes a certain degree of skill and candidness—and people are uncomfortable being candid,” said Greiff. “You want to create a profile of incentives,” said Greiff. “You want to give employees an interesting work environment, a talented team, opportunities to stretch and grow, and adequate vacation time.” He said it’s important to take time to really think about business relationships and ways to improve communication.
“You have to maintain the pulse of the organization,” he advises. He said one of his clients was in shock after losing four key employees at his twelve-person firm. They quit and took the client list because they felt they could do a better job serving clients themselves. The owner was disheartened, but decided not to take legal action and, instead, just pick up the pieces.
He favors what he calls “360-degree communication.” Twice a year, you should evaluate employees and let them evaluate you as the boss. “If the ultimate goal is to improve the performance of the company, then feedback is a valuable tool,” Greiff said.