By Karen Axelton
What does it take to motivate your employees—especially when you can’t afford to use financial means to do so?
The good news is that a recent survey from McKinsey & Co. shows money isn’t the biggest motivator. The survey looked at three non-cash motivators (praise from supervisors, attention from the company’s leaders, and the chance to lead a project) and found they were just as effective (in many cases, more so) than the top-rated financial incentives.
Here are the percentages of respondents that stated each type of motivation was “very” or “extremely” effective:
Financial:
- Performance-based cash bonuses – 60 percent
- Increase in base salary – 52 percent
- Stock or stock options – 35 percent
Non-financial:
- Praise by immediate manager – 67 percent
- Attention from leaders – 63 percent
- Opportunity to lead projects – 62 percent
As you can see, even the lowest-ranked non-financial incentive ranked higher than the highest-ranked cash incentive. What’s more, this survey was conducted among larger companies. As a small business, it’s even easier for your company to offer praise, attention and the chance to take the lead—the motivators that employees value most.
Hi Karen,
In this economic climate, it is very important for employers to consider the non-financial incentives to keep their employees engaged. Two additional non-financial incentives that may be beneficial to keep employees motivated are 1) making sure your employees have all the resources they need to do their job effectively. This is so important since a lot of employees are doing the job of two employees. 2) teaching your employees new skill sets that are transferable within the organization or outside the organization.