Salary attracts employees, incentives increase productivity

Incentives play a pivotal role in driving productivity by keeping employees motivated and engaged beyond their basic compensation. While salary is the primary factor that attracts talent to a business, acting as the "entry ticket" to the organisation, it's the incentives that maintain and boost ongoing enthusiasm and performance. Salary, typically paid monthly, meets employees' basic financial needs, but it’s not enough to keep them continuously engaged. To truly motivate employees, companies need to think beyond salary and implement effective incentive programs.

Research has shown that regular recognition is essential for maintaining employee motivation. Specifically, employees need to feel recognised and rewarded on a weekly basis to stay engaged. This frequent reinforcement mirrors how humans are naturally conditioned from a young age to respond to incentives. Take, for example, the simple childhood scenario: "If you eat all your dinner, you can have ice cream." This early lesson in incentives carries into adulthood and the workplace.

To be effective, incentives must adhere to three essential principles:

1. Transparency: Employees should clearly understand what the reward is and how they can achieve it. Just as a child knows they will get ice cream if they finish their dinner, employees need to know exactly what they will receive and under what conditions.

2. Consistency: The criteria for earning incentives should be stable and predictable. Employees should not be left guessing what they need to do to be rewarded. In our analogy, consistently eating dinner leads to the expected reward, reinforcing desired behaviours.

3. Flexibility: People have diverse preferences, and incentives should cater to this diversity. Just as one child might prefer chocolate ice cream while another prefers vanilla, employees should have the flexibility to choose rewards that resonate with their personal tastes and motivations.

By ensuring that incentives are transparent, consistent, and flexible, companies can create a more engaging and motivating work environment that effectively drives sustained productivity and employee satisfaction.

Mark Armstrong CEO/Founder

mark@myincentive.io