A happy and driven workforce is essential for organizations pursuing growth and success. However, keeping employees motivated is a decades-long challenge, which businesses have attempted to tackle using various theories and techniques.
Among them, the incentive theory of motivation stands out as a widely popular concept adopted by progressive enterprises. What exactly does it involve, and how can you use it to increase the productivity of your employees? Let’s explore.
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Understanding the Incentive Theory of Motivation
The incentive theory focuses on the link between employee motivation and external rewards. It centers on the premise that individuals produce positive behaviors and actions when given positive incentives as reinforcement.
What type of incentives? Salary increases and bonuses are obvious choices. However, you can use non-monetary motivators, too.
Here are a few examples:
- Promotions
- Flexible work arrangements
- Paid time off from work
- Professional development
- Recognition and praise
- Certificates, medals, and trophies
- Social gatherings
Some organizations even use free snacks, game rooms, gym memberships, and the like to motivate their employees. The options are simply limitless based on what works for your team.
However, the incentive theory of motivation is not just about positive rewards. It also recommends using negative ones to discourage unproductive behaviors and induce behavioral corrections. Negative incentives can range from demotions to the removal of bonuses.
How Can You Implement the Incentive Theory in Your Workplace?
Using the incentive theory of motivation at work is not as simple as complimenting an employee or approving a promotion. It involves a few deliberate steps to produce the desired results.
1. Understand Your Employees
Why is this important? What motivates one employee could vastly differ from what generates positive behaviors in another. This is because needs, interests, attitudes, personal values, and aspirations vary among people based on demographic and psychographic factors.
For example, opportunities for growth are an important motivator for 51% of Gen Zs, although it only inspires 17% of Baby Boomers.
You’ll also find similar disparities between different roles. For instance, sales teams are often motivated by financial rewards, while those in product design might place greater value on recognition and praise.
Therefore, to create a successful incentive program, conduct in-depth research to understand what works for your team.
2. Set Goals
Next, determine what you’d like to achieve through rewards and incentives. It could be about improving customer service or boosting revenue growth. Or, you might focus on culture building by encouraging the adoption of company values.
After you identify and set overall organizational objectives, break them down into team and individual ones.
3. Design Your Incentive Strategy
A standardized program allows you to align positive and negative incentives with your goals and objectives and ensure optimal results. It creates predictability, enabling employees to know beforehand what type of rewards their actions would produce.
A formal mechanism introduces transparency, too—an essential element for creating trust and credibility.
Critical factors to consider when designing your organization’s incentive scheme include:
- Positive and negative incentives
While you leverage positive rewards to induce productive and desirable behaviors, don’t forget to integrate negative incentives to discourage unproductive ones. By letting your employees know which actions are welcome or unacceptable, you’re providing clarity and direction to guide their behaviors.
- Monetary and non-monetary rewards
Financial rewards such as bonuses and salary hikes are undoubtedly important. But ensure you include non-monetary incentives as well. A simple token of appreciation or the opportunity to be recognized in front of the entire organization can go a long way in motivating employees.
- Short- and long-term considerations
If you want to achieve short-term productivity gains, an annual reward mechanism, where employees must wait until the end of the year to be rewarded, won’t yield effective results. This is why adopting a combination of weekly, monthly, quarterly, and yearly incentives is crucial.
- Individual and team benefits
When designing a rewards system, ensure it doesn’t create friction or antagonism within teams. The idea is to encourage productivity, performance, and positive behaviors with healthy competition, not to create an individualistic culture where each employee is focused on personal success at the expense of others.
Creating a combination of individual and team incentives is the best solution for this. For example, a performance-based commission can motivate each salesperson to pursue their personal sales target. However, by offering a team bonus for successfully reaching the company’s revenue targets, you can encourage better teamwork focused on organizational success.
4. Communicate the Program
Communication is key for the successful rollout of your incentive initiatives. Emphasize how the program can benefit employees, teams, and the business. Also, introduce an element of excitement by creating an internal campaign to drive awareness and interest.
5. Offer Support
Providing rewards alone is not enough to improve productivity. You must support your employees to achieve their performance goals.
To begin with, help teams understand the impact of their behaviors, both positive and negative, on the overall organization. Train them regularly to provide them with the necessary knowledge and skills.
In addition, equip them with the right resources to increase productivity and efficiency. Today, there’s a suite of advanced tools that employees can benefit from.
For instance, Asana can help manage your sales and marketing team’s work on a single digital platform, saving time and boosting efficiency. Leadar can support lead generation efforts by discovering accurate and up-to-date contact information, while HubSpot streamlines CRM activities through automation, predictive analytics, and other advanced technologies.
6. Track Outcomes
Once you launch the incentive program, monitor it consistently to ensure it delivers the intended outcomes. Assess employee reactions and responses, seek their views using surveys, and tweak the initiatives and rewards where necessary. Don’t forget to celebrate important milestones.
To Summarize
When applied correctly, the incentive theory of motivation can significantly boost employee productivity.
To develop a successful incentive scheme, understand what motivates your team. Set clear goals and design an effective strategy by integrating both financial and non-financial rewards. Communicating it in a meaningful way is just as important. And when rolling out the program, remember to offer sufficient support to your employees and track outcomes to generate desired results.
