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Beyond the bonus: driving employee performance

Helen Mayson

Beyond the bonus: driving employee performance

ILM’s latest research reveals that it’s enjoying a job that motivates most staff, not getting a fat bonus cheque. Helen Mayson rounds up the key findings

What exactly motivates people to work harder in their role? Despite the UK spending £36.9 billion on bonuses in the 2012/13 financial year, new ILM research, Beyond the bonus: driving employee performance, shows that they might not be motivating staff in the way employers hope. In the research, employees place financial incentives fairly low down in their list of motivating factors, below enjoying their work, getting along with colleagues and support from their manager.

When asked to list their top three motivators, enjoyment of the job came out on top, with 59% of employees choosing it as one of their three most motivating factors. While bonuses failed to make even the top five, financial issues were not completely forgotten. A good and fair salary and benefits programme (including pensions) was the second highest motivator, followed by how well they got on with the people they work with.

When asked for one thing that would motivate them to do more, 31% of respondents suggested better treatment by their employer, including more praise and a sense of being valued, would be the most motivational thing their organisation could do.

Recognition, non-financial reward and support/feedback are both highly motivating and increasingly desired by employees. Managers who are able to understand and utilise these tools effectively will be able to get the best out of their workforce and produce a happier, more productive environment.

Positive part-timers

Part time workers were revealed to be significantly more motivated than full time workers, with 76% classing themselves as ‘highly’ or ‘fairly’ motivated at work, compared to 68% of full time workers. This is despite being paid less than half as much on average (£10,793) as a typical full-time employee (£22,328). Pro-rata, the average part time wage is £21,586, £742 lower than full time colleagues. Part time workers were shown to be overwhelmingly intrinsically motivated, and more likely to have both a higher level of respect for their manager (57%) than full time 03 colleagues (52%) and a more positive attitude towards their employer (57%) than full time staff (49%).

Part time workers are less motivated by money in general, with enjoyment of the job and how well they get on with their colleagues more important motivators. Part time staff are also far more likely to say that money is not important to them (27%) than full time staff (13%).

These findings highlight the enormous value of part-time workers, who provide a rich and engaged pool of talent for employers, cost organisations less than full time staff, are more positive about their work and are likely to work harder for their employer. This indicates that creating more job share or part-time roles would enable employers to achieve both better value for money and a more positive, happy and productive workforce.

Motivating men and women

Overall, women were more likely to say they were highly or fairly motivated (75%) than men (66%).

Women are also more intrinsically motivated than men, with enjoyment of their job the most important motivator (64% chose it as one of their top three), followed by ‘how well I get on with people’ (44%) and base salary (41%). In contrast, men chose base salary and benefits (58%) as the most important factor, followed by enjoyment of their job (53%) and how well they get on with colleagues (41%). Men are likely to be less positive about their employer, to say that their tools and equipment are out of date and to agree with the statement ‘I only work because I need the money to live, no other reason’ (57% of men compared to 50% of women).

When asked about attitudes to money as a motivating factor, men showed themselves to be more money-oriented than women. ‘Money is useful, but not the only thing in life’ was the top answer for both genders, but more women than men agreed with this statement (56% of women to 45% of men), while more men than women agreed that ‘It’s good to have money, and I work hard to earn enough to enjoy my life’ (35% of men to 30% of women).

Under 30’s more financially focused

Employees aged under 30 were shown to be more financially motivated than their older colleagues, and more likely to receive financial incentives for work. Some 55% of under 30’s indicated that money was either very or pretty important to them, but this fell to 43% of over 30’s. Under 30s selected base salary as the number one factor motivating them, with bonus coming fifth, while over 30’s were less financially focused than their younger colleagues, with base salary the second most important factor (after enjoyment of the job) and bonus eighth.

A similar pattern is evident in their attitudes to money generally, with 12% of under 30s saying that money is the root of all happiness compared to 9% of over 30s.

People under 30 are likely to be in the earlier stages of their career, to have a stronger need for economic returns and a lower wage than their older colleagues. They are unlikely to have reached a comfortable financial threshold, and therefore money takes on a greater level of importance.

Appraisals aren’t working

Two thirds (61%) of employees say their workplace has an appraisal system, but a quarter of respondents (25%) think that appraisals are performed poorly by their managers.

The research indicates that appraisals are less effective at driving the performance and motivation of female employees than their male counterparts, with women more likely to give examples of poor practice in the appraisal process (29%) than men (21%). In contrast, men were more likely to say the appraisal process had a bigger impact on their careers, with 40% of men saying appraisals impact their financial reward compared to 26% of women and 24% saying they lead to promotion compared to 15% of women.

Appraisal systems can be an effective way to drive performance, but our research shows that many organisations are still performing poorly in assessing performance in this way. Better linking of individual SMART objectives with performance reviews, more regular meetings to assess performance rather than ‘once a year’ catch ups, and better training for managers on how to use appraisals to develop staff could all help to increase the effectiveness of performance management.

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