Why money is not always king for rewarding staff

Wanyama hurriedly rushed up the stairs to the human resources office. Ensnarled traffic along Ngong Road delayed his arrival to his first day on the job at a real estate firm in town. Njeri waited to provide him with his induction, impatiently checking her watch periodically.

Finally, Wanyama arrived and the two began discussing employee policies, benefits, leave, and incentives. He noticed that the most of the discussion centered on monetary rewards of various kinds.

But he desired to know how management interacted with staff and how to approach superiors. Much to his surprise, Njeri felt uncomfortable with his line of questioning thus making Wanyama concerned that perhaps issues percolated under the surface at the firm.

Following the induction and as weeks turned into months at the firm, he noted that his fears warranted real concern. Management only interacted with the staff functionally and not relationally as if, as he later recalled, “like they were robots”.

Executives forced a plethora of goals on to employees without advice on how to achieve the targets or without providing the structure and support in order to achieve them.

Wanyama struggled to make dozens of sales calls per week, but without any allocation for communication or transport expenses.

Following 11 months with the firm, he resigned in order to start his own real estate agency where he endeavoured to incorporate the right incentives for his future staff.

As discussed extensively in Business Talk over the past four years, organisations need to provide a combination of intrinsic and extrinsic rewards as also detailed in new cutting-edge research by Jason Shaw of The Hong Kong Polytechnic University.

Further, firms also must provide goals supported with resources. Many firms focus on SMART goals, with the acronym standing for specific, measurable, achievable, relevant, and time-bound.

However, research delineates a different mixture for goal setting success. Dr Bazerman at Harvard University recommends not giving too many goals, but only a moderate number.

Too many goals panic employees and overwhelm their sense of achievement, as seen in Wanyama’s former employer above.

Social science research overlaps some of the commonly used SMART techniques. First, goals need to contain specificity. Goals that lack specific details confuse employees.

The targets you set should be exact. Second, managers should incorporate relevant targets for employees.

A corporate-wide sales target applied to the accounting staff’s incentives would not motivate and, instead, likely provoke finance employees. Make targets employee-specific and, again, supported, unlike with the unfortunate Wanyama.

Third, researchers insist that employee goals should contain challenging targets. An employee who shows up to work and reads Facebook all day will not easily attain the objectives you set.

Further, you, as the manager, must place goals as moderately difficult without getting too impossible to accomplish. If the goals you set appear impossible to attain, then your unmotivated employees would look for work elsewhere and lower their performance in your firm.

Fourth, goals must foster commitment by employees in order to successfully achieve results. Commitment entails consistency throughout the year rather than a rush during the last month of the calendar.

Goals that also do not foster employee commitment to the organisation could also sink the firm. Fifth and final, goals should incorporate participation of the entire departmental team as well as individual goals.

Failure to adhere to the above five goal characteristics may disrupt your employees’ feelings of organisational equity. Humans foster from very early ages an innate ability to judge the fairness of conditions around them.

If any of you raised two or more children in one home, then you know how sensitive humans are towards parity. If one child believes that he or she received a smaller sweet than the other child, then crying and complaining quickly follows.

Human beings’ heightened ability to judge fairness as compared to other primates does not end when one reaches secondary school. It continues throughout one’s life.

Adults only get better at hiding their disappointment due to cultural pressure of appropriate behaviour instead of throwing tantrums about inequality like children.

Inasmuch, an employee must feel that they receive equal pay commensurate with the tasks they perform. An overworked employee contributing greatly to bottom-line performance should receive corresponding compensation.

Employees exist as keenly aware of inequity in office settings. Consequences of inequitable goal distribution include employees changing their performance outputs.

Additionally, efficient firms carefully construct goal systems that equitably distribute objectives and rewards among staff and departments to banish internal inequity perceptions from the company.

Employee emotions must not centre around a colleague who they perceive as receiving proportionally higher rewards than they do. The employee internalises a tantrum and acts out, not like a child, but instead resulting in lower performance.

If an organisation conducts performance reviews, even though they harm performance, then those reviews must come out equitably.

A checks and balances approach whereby human resources reviews manager input and then provides employees with the opportunity to respond in writing.

The most common method of performance-based rewards includes personal rewards. However, the goal characteristics also apply to team rewards and organisation-wide rewards.

In summary, remember that organisational obsession with goals leads to problems, but the five characteristics of goals across individual, team, and organisational objectives enhance effectiveness and leads to strong performance gaining you, your shareholders, and your employees more profits.

Scott may be reached on [email protected] or follow on Twitter: @ScottProfessor.