Inspiring Performance – It Takes More than Just Pay

by HEATHER MCCULLIGH | Aug 24th, 2010 | Pay for Performance |

A recent survey from Kelly Services found that more than half of all Americans surveyed believe they would be more productive if they had greater interest in the companies that employ them, through benefits such as profit sharing. In previous posts, we’ve established the many benefits pay for performance programs provide when they are done well, but this survey helps to clarify who pay for performance matters to and why.

The survey found 25 percent of workers are currently in an arrangement where some of their pay is tied to performance targets. Gen X (aged 30-47) employees are much more likely to be receiving performance-based pay than Gen Y (aged 18-29) or those in the Baby Boomer generation (aged 48-65). Men are also more frequently in performance pay plans than women.

However, of those not receiving performance pay, almost a third (31 percent) say they would be more productive if their earnings were connected to performance outcomes, particularly Gen Y and males.

The survey demonstrates that pay for performance is most relevant to the younger generation of workers and to male workers. This gives HR some insight into how to position the program, and which groups will not find it nearly as compelling.

Other survey findings that are of interest:

  • Aside from salary, the reward that rates highest is health benefits, followed by flexible hours, and retirement benefits.
  • More than two-thirds (67 percent) believe that employers should provide incentives to encourage a healthier lifestyle, like programs for quitting smoking, losing weight, or exercising.
  • The employer-provided health benefit that is most attractive is health insurance, followed by gym access or discounts, a smoke-free environment, and corporate exercise programs.

All of this reinforces the point that money alone does not motivate workers; compensation and benefits need to be part of a well-thought out and executed talent management and HR strategy. Throwing out bonuses with zero explanation won’t drive productivity, but a solid strategy to engage and inspire employees will. If you want to explore another take on the subject, check out David Creelman’s white paper called “Why Pay for Performance Can Work at Last.”

Great HR leaders understand what motivates different groups of workers and should ensure their companies are offering a wide enough variety of incentive programs that connects with all their employees needs.

  • http://www.maximizepossibility.com Chris Young

    Great reporting Heather! I totally agree that money alone does not motivate employees. However, it has a greater effect on some workers compared to others. One thing I always recommend to clients is that they use a validated personal motivators assessment to determine what really motivates their performance and using this info to tailor incentives and rewards to the individual employee.

    I have included your post in my Rainmaker ‘Fab Five’ blog picks of the week (found here: http://www.maximizepossibility.com/employee_retention/2010/08/the–1.html) to share this research and your thoughts with my readers.

    Be well!

  • http://deltaorg.wordpress.com/ George A Guajardo

    It is good to remind decision makers that it is indeed not all about the money. However, we would be remiss if we allowed that message to be interpreted as “money is not important.”

    A fully engaged employee can be understood as being fulfilled both rationally and emotionally (please excuse the over-simplification). Wages tend to fulfill the ration side of the engagement equation (dependent on the type of worker, available alternatives, etc.). Without satisfaction in pay, employee will not be fully committed to the organization and their productivity, creativity and commitment potentials will suffer.

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    [...] From Employee Performance and Talent Management Blog: Inspiring Performance – It Takes More th… “A recent survey from Kelly Services found that more than half of all Americans surveyed believe they would be more productive if they had greater interest in the companies that employ them, through benefits such as profit sharing. In previous posts, we’ve established the many benefits pay for performance programs provide when they are done well, but this survey helps to clarify who pay for performance matters to and why.” [...]

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    [...] From Employee Performance and Talent Management Blog: Inspiring Performance – It Takes More th… “A recent survey from Kelly Services found that more than half of all Americans surveyed believe they would be more productive if they had greater interest in the companies that employ them, through benefits such as profit sharing. In previous posts, we’ve established the many benefits pay for performance programs provide when they are done well, but this survey helps to clarify who pay for performance matters to and why.” [...]