Whatever they say, it’s not money they want

EACH year, about one person in five (average, 18 per cent) changes jobs, costing £8,000-£12,000 in recruitment and loss of productivity per employee.  Incentive schemes that give recognition for a job well done and show that hard work is appreciated can play a part in reducing staff turnover by boosting morale.

In a survey, the Incentives Research Foundation found that incentive programmes motivate people to increase their performance by 27 per cent.  And our report last year showed that 75 per cent of respondents believed that incentives were good for staff morale.

Effective incentive schemes must be relevant, measurable, open, fair and available to all; otherwise they can lead to de-motivation and even resentment.  Many fail through poor communication by management, unrealistic targets and/or a lack of clarity around the process.

Continual re-assessment of the effectiveness of the scheme is crucial, as is communicating any necessary changes promptly, clearly and concisely.

Although most people claim that they prefer money, evidence shows that non-cash rewards -- such as gifts, merchandise and experiences -- have a greater impact (and needn’t cost the earth).

The reason: when offered cash, our brains calculate its relative value and make a value assessment on whether it is worth the extra effort.  This rational assessment does not involve the emotions – and it is emotion that drives behaviour.  When offered more tangible rewards, our brains visualise them and the associated pleasure they will bring.

Francis Goss is head of commercial operations, Grass Roots; f.goss@grg.com.