The economic crisis led to increased competition among enterprises. Because of that most managers began looking for a way to increase business productivity. Labor productivity is one of the leading indicators of a company’s economic performance. The analysis of productivity thus determines the efficiency of the corporate workforce and working hours.

The most important task when analyzing and planning productivity is to identify and exploit reserves for growth. To do this one needs to determine opportunities for improvement in labor productivity. One way of doing this is to increase the motivation of employees.

The term motivation refers to a process of encouraging ourselves and others to take action, achieve personal goals or business objectives. The primary purpose of the motivational methods is to gain the maximum benefit from the use of the existing workforce, which improves the overall performance and profitability of a company.

Increasing employees‘ motivation is a complex and consistent process. When creating a motivational system, we must take these factors into consideration: technical, organizational, social and economic.

Material motivation: risks and opportunities

Many managers consider the material motivational system as the best motivation. It is true to some extent because a competitive salary is a fundamental element of staff retention. However, just tapping into the material motivation of employees does not always bring expected results. It is a relatively complex instrument of influence, which should be used very carefully, efficiently and skillfully.

The material motivation of employees is based on a financial reward system. There are several types of incentives, which have an impact on increasing productivity at work:

• Salary raises
• Bonuses and additional allowance
• Paid holidays
• Paid sick leave
• Surcharge for pension and welfare fund
• Other benefits

When using money (salary, bonuses, sanctions, etc.) as the only way to motivate new employees, it is possible to reach an acceptable level of compliance with standards; however, it is not feasible to achieve excellent results. Someone’s wage should not be looked at as is a solitary motivator, and it is like a “carrot and stick“ which define the scope of employee’s activities (what he can and cannot he do, what will be supported). Financial incentives have their limits – such as someone who ‘rewards’ employees for proper work and ‘punishes’ them for violations of rules and requirements. The trouble is that just performance standards do not guarantee positive results. For example, dissatisfied workers at one European Ford automobile factory organized an unusual strike by operating in strict accordance with standards, regulations and nothing more. The performance decreased by 25%.

A motivational system that includes work stimulation is crucial. First and foremost one must address the preservation and control of labor standards, and only then stimulate the achievement of results. A reward increase associated with performance indicators (the result, volume of performed work and responsibility) is a short-time solution. An employee can quickly get accustomed to a higher wage for the same amount of work and the higher salary’s impact on one’s motivation will diminish.

Thus by using only financial incentives, maximal efficiency cannot be attained. To achieve new heights, one needs to tap into the intrinsic motivation of its employees. It results from an understanding of common goals and values, having an inspiring and cooperative atmosphere, stimulating work and having respect for the manager – these are unrelated to material motivation.

Non-material motivation: Advantages and disadvantages

There are many ways to motivate employees immaterially: corporate events, training, subsidized vouchers, promotion or new status in the organization, gifts, letter of thanks, certificate of merit, social contributions, invitations to major holidays, discounts, etc. The question is only for which option and based on what to decide.

To avoid unpleasant situations when selecting the manner of appreciation, the manager should imagine how the employees would react to the chosen method.

It is better to ask the employees themselves, what has the motivation power for them. They can best express which ‘reward’ would lead to more efficient work, what would they like to get in recognition for their merits and achievements.

An ideal choice of motivational system is the identity of an organization or department’s objectives with employee’s goals. According to Leo Tolstoy, no activity can be worthwhile unless it is based on one’s interest. More specifically, when performing a task, the employee reaches the result not only for the organization but also for himself.

Let’s suppose that an employee’s goal is to learn English. By fulfilling certain requirements at work or by achieving certain results the employee may get the opportunity to attend English language courses on company’s account or get a partial contribution to further education. This way the organization helps to fulfill the employee’s dream. If an employee wants to spend more time with his family, let him, but under one condition – that he will perform his work well or will solve a significant problem in the organization. Maybe then he can take off twice a month and spend more time on his own or with his family. It does not matter that the employees‘ interests are outside of work. Usually, it is the case of the most productive employees with growth potential.

It is important for managers to understand the interests and priorities of their employees, what are they driven by and what they want to achieve. Identify the primary internal motivation of an employee and keep it in mind when creating the motivational system. In a similar way, a director can stimulate employees‘ efforts to achieve results at minimal costs. A ‘gift’ is not as important as the recognition. It is also important to understand what and when to ‘give’ – e.g. leave a thank you note on a table, flexible working hours, extra days off, perspective assignments, training opportunities, career growth opportunities, name day congratulations or birthday gifts. When using these techniques correctly, it is possible to gain an employees‘ loyalty and ensure a high level of their motivation. It is necessary that the selected method is truly important for the employee, and not to use it just regarding something to ‘check off’ on a task from the manager’s to-do list.

And the most important at the end

In some organizations, teamwork is supported, but the emphasis is exclusively put on group success – regardless of the contribution of individual team members. On the contrary in others, they rely only on personal achievements and thus create a competitive atmosphere that leads to unhealthy rivalries. Based on the above written, we understand that it is necessary to keep a balance between individual and collective motivation in agreement with its and an organization’s objectives. It should be noted that the attitude of a director himself on its own could either be a motivating or demotivating element. According to surveys, the decisive factor for leaving a job is the impossibility of establishing a positive working relationship between an employee and director. Excessive demands, unfair appreciation or punishment, financial dishonesty, unfulfilled promises, incorrect behaviors – just a few examples from the list of complaints accumulated from employees to managers who were on the way out. All these factors are more important to employees than wages, bonuses, rewards and gifts. According to extracts from the “Leadership Secrets of C. Powell“ book: “A sign of a good leader is the readiness of subordinates to follow him just out of curiosity.“ A talented head leader creates an atmosphere of creativity and drive in which the subordinates forget the unpleasant interior or other deficiencies, and lead them to achieve excellent results. A charismatic leader inspires his subordinates by his example, belief in success, support, and leads them to the target.

However, the primary motivating or demotivating element is the employee himself. It was found that high productivity of employees is possible only in the case of them being interested in the final result, and if they have a positive approach to work. When selecting employees, the director should evaluate the candidates not only concerning professionalism, but he also should sense the desire to work and have a desire to pursue career growth. It is much easier to train a beginner than to motivate an experienced but lazy ‘professional.’

6 Ideas for Non-material Incentives in Employee Motivation

2016-12-09Many employers prefer to save the financial incentives till better times. Non-monetary means of motivation come to the foreground. CleverControl picked up six of the most effective ones. The word “motivation” is familiar to everyone. Each of us has felt this invisible push forcing us to move in a certain direction. But the problem is that often we feel the opposite – not enough of the motivation. According to Maslow, a person feels the need for something and therefore gets motivated when he or she feels the lack of something physiologically or psychologically. How to simulate this “lack” so that employees would be naturally motivated to work effectively and so that the company did not bear any expenses? 1st idea: the recognition There is nothing easier than to genuinely recognize everybody’s merits. Any of us need praise and will be happy to get approval and positive evaluation. Says Philip Ortiz from the Association of experts of management systems “Phiiz Media”: “Sometimes such simple and little signs of attention to an employee as public praise, recognition, and underlining his or her important role are more important than material incentives”. 2nd idea: free training Of course, it is important to give people the opportunity to grow. Not everyone has the time and money to gain experience and to make progress. Therefore, many organizations send their staff to additional training to increase their qualification without any additional costs (if you employ internal resources or arrangements with partners). Diana Grant, the editor-in-chief of the “Quick Environment” magazine, believes that free education has several indisputable advantages: “During any crisis, one of the most effective ways of non-material motivation is the free education. The management and staff are well aware that the first ones to be reduced are ineffective employees. Training is a real chance to learn to work better, and hence not be reduced.” The greater the set of knowledge, skills, and qualities of a particular employee is the more valuable he or she is for the company. 3rd idea: a free trip A great idea is to send your team to a resort! Christina Hughes, the head of the HR Department at Delivery Hit says that it is a wonderful way to maintain the employees’ productivity which goes down sooner or later: “A short trip without interruption of work is a great idea to cheer up the team and shake up the tired employees. It’s kind of a second breath: the reconciliation of work and resort.” Travel fills your team with new energy says the press-secretary of “Exhibition” Charles West:  “After successfully reaching another business goal we organize a corporate trip. The point is to connect with the beautiful, to see the masterpieces of culture, and to get into a new atmosphere. Such trips “load” employees with new experiences and “unload” their minds, broaden their horizons and fill them with creative energy.” 4th idea: gifts for progress Some companies gift their employees with what they sell and thus kill two birds with one stone! Employees become loyal and have a splendid opportunity to study all the properties of the product. “The knowledge gained in this way gives sellers the opportunity to describe the product in just a few sentences, quickly compare 2-3 options and demonstrate professionalism and sincere interest in the customer,” says the business coach and director of a training center Brandon May. 5th idea: “employee of the month” or who is better? You can motivate the employees with regular competitions figuring out who made the “best sell” or who is “the most efficient employee of the month”. This method is very effective from the point of view of psychology; in addition, the desire to be better and the spirit of the competition always increase the efficiency of the team. “It is important to encourage not only the sales but also the service. The winner can get an extra day off or a certificate from the company’s partners, plus the placement on the wall of honor. The main thing is not to overdo it with the non-material motivation or the excitement disappears,” said Emma Weber, the General Director, founder of the Consulting center “WE”. 6th idea: a nice bonus “One of the best ways of the non-material motivation is a free admission to theaters, exhibitions, and other cultural events”, – says the musician and music producer Ronald Bates. His production center often receives invitations to one or another cultural event for providing information support to concert agencies. “This is a great bonus for employees,” emphasizes Bates. In conclusion To summarize, we can say that ensuring high productivity and efficiency in employees with non-monetary ways can be done in any company with a deliberate and practical approach of the Manager. And with such a motivated team you can bring the company to a new level. And…maybe think about the financial motivations too.

Employees are an important and valuable asset of the company. How to build an effective system of material and non-material motivation of personnel? The article provides a comprehensive overview of the most effective methods of stimulating employees.

In recent years, the personnel managers have been mastering all new ways of stimulating. They use not only the classical material motivation in the form of cash bonuses and high salaries but also non-material incentives. Here are a number of rules for the effective motivation of employees:

• The motivation of employees brings results when they feel recognition of their contribution to the results of work and have a deserved status. The atmosphere and size of the office, participating in prestigious conventions, representing the company in important negotiations, trips abroad – all of this emphasizes the position of the employee in the eyes of the colleagues and outsiders. You should use this method delicately: a part or full deprivation of a previous status, as a rule, leads to a furious reaction up to the resignation of the employee.
• Unexpected, unpredictable and irregular bonuses motivate better than predictable bonuses when they practically become a part of a salary. Positive reinforcement is more effective than negative reinforcement.
• Reinforcement should be immediate, which is expressed in an immediate and fair response to the actions of employees. They begin to realize that their extraordinary achievements are not only noticed but also rewarded. The complete work and the unexpected reward should not be divided by long time period; the longer the time interval, the less the effect. However, the rewards from the manager must be put into practice, and not remain in the form of promises.

Employees should be rewarded for intermediate achievements, without waiting for the completion of all work, since great successes are difficult to achieve and relatively rare. Therefore, it is a good idea to reinforce positive motivation in short time intervals. But for that to happen, the whole task should be divided and planned in stages so that you could give each of them an appropriate assessment and a proper reward for the amount of work actually done.

It is important to give employees a feeling of confidence because the internal need for self-esteem requires it. Success leads to success. As a rule, large rewards, which are rare, cause envy, but small and frequent rewards cause satisfaction. You should not single out any employee without compelling reasons for the sake of the work team.

Typical incentives are the following: promotion, empowerment, increased power, providing a share of the economic effect, recognition, the best place at the meeting table, verbal gratitude from the manager among colleagues, the possibility of direct communication with the top manager, a material reward indicating “for what”, life and health insurance, payment for medical services, extraordinary paid leave, job security, reduced rate educational loans, housing purchase,  payment for a personal car and gasoline, and others. In this case, a company cannot have standard incentives; incentives should be aimed at a certain employee.

Contents

• 1 Bonus for fulfilling the set goals
• 2 Motivation through punishment
• 3 Encouraging a healthy lifestyle for workers
• 4 Social policy of the organization
• 5 Improvement of the organization of work and management
• 6 Non-financial motivation

Bonus for fulfilling the set goals

This is the most common type of motivation. Such payments are made when the employee fits certain pre-established criteria. Among them, there may be economic indicators, quality indicators, employee evaluation by other persons. Each company sets its own criteria of this kind.

Motivation through punishment

Some firms prefer to punish more, in others – to encourage more, and some companies found a really golden mean. The level of punishment depends primarily on the impact goals. The main goal of punishment is to prevent actions that could harm the firm. That means punishment is not valuable as “revenge” for the wrong actions of an employee, but as a barrier that will not allow this person to repeat these actions in the future and will set an example for the entire workforce.

However, practical experience shows that the leader should not overreact to abuses of his employees. Thus, punishment is effective when it is focused on providing the required psychological impact on the employee and the whole team. At the same time, punishing inadvisable actions, we are definitely encouraging those employees who work in a permitted direction.

When you punish an employee, it is necessary to have an explanation, for what and why the punishment is applied. Punishment must necessarily correspond to an action. However, material punishment is accepted in case of direct material damage to the company that can be calculated. In many cases, after the failure of a subordinate, the boss can simply talk to him, and it’s a done deal. If the main rational goal of using punishments in an organization is to avoid failures, then the application of incentives expresses the achievement of better results and development.

Encouraging a healthy lifestyle for workers

These payments are in the form of a cash reward for quitting smoking, employees who have not missed a single working day during the year due to illness, to workers who constantly work out. Personal rewards are special bonuses paid for having the skills that the company needs at the moment.

Social policy of the organization

An extremely important tool of economic stimulation:

The organization implements benefits and guarantees within the social protection of employees (social insurance for old age, temporary incapacity for work, unemployment, etc.) established at the state or regional level.

Organizations provide their employees and members of their families with additional benefits related to elements of material incentives, at the expense of the social development funds of the organization.

Thus, the company’s social policy as an integral part of the personnel management policy represents activities related to the provision of additional benefits, services and social benefits to employees.

The interest of employees in the work in the organization and its successful economic activity is the higher, the more the number of benefits and services provided, including those which are not provided directly in the current legislation. This leads to a reduction of turnover of employees because the employee doesn’t want to lose numerous benefits after leaving. Such a policy can provide additional income for employees in the case of low wages (for example, in state companies) or be offered in the interests of attracting and retaining a skilled workforce with a high level of pay.

The Foreign and local experience of motivation in organizations makes it possible to draw up an approximate list of benefits and social services provided in various forms.

• Material monetary form: payments for the purchase of property of the company, assignment of low rate loans, paid temporary time off(for example, when employee is getting married), payment of training of employees at various courses or in educational institutions, assignment of concessional places in pre-school institutions and their payment, etc.
• Material non-monetary form: use of the social institutions of the organization; Use of holiday centre, children’s health camps by travel warrants at discount prices (for children of employees), upgrading the technical equipment and comfort of the workplace, improving social working conditions; Increase the flexibility of the work schedule, provide tickets for visits to various cultural events and others.

To eliminate the physical and moral discomfort of employees, it is advisable to invest a small amount of money every month in providing recreation opportunities. For example, to put exercise equipment and board games in special rooms for employees’ rest. Western firms began to understand that if people were not allowed to rest, they would not be able to work productively. If you allow the employee to feel at home, then most likely he will work better.

Part of the social policy of the organization is general company events such as holidays, for example, the release of a new product model, days of the company, sightseeing trips, paid centralized dinners, parties. The advantages of such activities are to ensure a good rest for the company’s employees, to eliminate the fatigue of the employees.

In addition to useful for the company and enjoyable for employees’ type of rest, during this events, it is possible to unite employees of the organization, develop the team spirit and positive corporate culture. Studies show that the place of the celebration does not matter the success will depend mainly on the program of the event, on the ability to organize it, from the created atmosphere.

Improvement of the organization of work and management

Improving the coordination and interaction between the employees of the organization, the proper assignment of duties, a clear system of promotion, the establishment of a spirit of mutual assistance and support, and the improvement of relations between managers and workers it all contributes to increasing efficiency, productivity, and motivation of work.

Non-financial motivation

These tools are especially relevant for organizations with limited material resources, for example, state organizations (including in government and local government). Non-financial incentives include:

• reward-appreciation. Such incentives include passing pennons, diplomas ranks “best by profession”, “leader of the year”, “manager of the year” with the presentation of a badge and a valuable gift, appreciation letter from the company’s management on the work record book. Even a compliment to an employee can be considered as a form of encouragement;
• incentives related to the high evaluation of the employee’s status, the invitation of the employee as a lecturer, advisor, etc.

The generalization of the experience of practical activities of local companies and organizations in this area showed the importance of non-financial tools for stimulating of company employees and confirmed the fallacy of opinions on the absolute value of material factors in the formation of staff loyalty.

Directions to increase the use of non-financial factors to increase the loyalty and motivation of the staff of organizations can be:

• Maintaining a favorable psychological climate in the team;
• The development of a conflict management system;
• Formation and development of organizational culture;
• The formation of a sense of justice among the employees, the construction of effective feedback systems;
• Dissemination of effective performance assessment systems among staff;
• Attentive attitude to the problems of employees and the formation of their sense of security;
• Integration of employees into the team;

Creating a “one team” by increasing the closeness of positive emotional bonds and forming a positive group opinion in relation to professional activities.