Incentivising Staff is Not Just for Christmas
During these challenging economic times some employers will think that staff retention is not something that they need to worry about but, like good clients, the best employees will always have their pick of employers. That’s because in most businesses, the quality of the employees will have more impact on the bottom line than anything else. The most successful businesses are therefore those that worry about motivating staff as much as they worry about delighting customers. Whilst it may be tempting for employers to think they can save money by cutting the incentives budget, it is actually a false economy.
One study reported that 75% of employers accept that incentives raise morale (Grass Roots: “Corporate Faith in the Power of Incentives – A Research Report” April 2009), whilst another (Employee Benefits Research 2009: evaluation of and attitudes to benefits) found that 75% consider rewards for individual performance to be important to their staff. However, although employers see incentives as being desirable, some fear that adopting an incentive scheme will be expensive, particularly SMEs. This is a common misconception; in reality even a minimal budget can produce a significant return on investment when the scheme is managed effectively.
Traditionally employers have rewarded staff by giving them a ‘bottle of something’, cash bonuses or vouchers. The bonus often arrives months later in the payslip and is not memorable and motivating unless particularly significant. Commonly it gets swallowed up in living expenses. The bottle of something gets noticed but can often be unappreciated and does not encourage healthy living. Employees are considerably better motivated when they have the autonomy to choose how their rewards are spent. A series of smaller rewards, handed out more frequently, can be used one at a time, or accumulated to make a larger, more significant purchase, perhaps something they wouldn’t normally consider buying for themselves. People really will go the extra mile if they can leave with something in their pocket at the end of the day. One of the easiest ways to give your employees regular and sometimes unexpected rewards is through a prepaid card.
Most people will have now seen these cards: they look and behave just like a traditional debit card and employers can simply top them up electronically whenever they want to reward staff. They ensure the bonus does stand out and, unlike some vouchers, they can be used across numerous brands, meaning they are almost tailored to the employee. For example, if one of your team regularly eats out they could use their prepaid card for a meal with friends, whereas another employee with a passion for shoes could indulge it by spending their reward at a high street fashion store.
As with any reward scheme, it’s important to communicate it well. A recent study found that 57% of business leaders who felt employees didn’t understand their reward scheme experienced a drop in motivation. If you’re considering introducing prepaid incentives ensure your team understand their flexibility and where they can spend their rewards. This doesn’t necessarily mean countless bulletins, meetings or emails about the reward scheme, in fact it’s far better to keep it concise and effective so that employees understand and remain engaged, but don’t become fed up with constant updates.
Employers are also realising that they need to invest in the company’s future by tactically choosing the behaviours to reward, and this too can easily be done with prepaid cards. It takes a considered approach to identify the behaviours and activities that will have the greatest impact on the company’s performance and focus incentives accordingly. It’s also important to change the incentives on offer frequently to keep them fresh and exciting and to run short term ‘one-off’ offers to encourage bursts of effort at critical periods. Timing is also a critical factor. The greatest productivity is gained when the desired behaviour is rewarded immediately and unexpectedly rather than waiting for traditional times such as Christmas, when bonuses are often expected regardless of effort demonstrated.
The next consideration should be to establish and manage targets. In order to sustain morale and increase productivity, targets must always be set at a level which is challenging, yet achievable. This may mean being prepared to lower overall expectations of performance during tough economic times and introduce smaller rewards at more frequent intervals. Despite best intentions and no matter how appealing the incentives on offer, if targets are unachievable the workforce will become disenchanted and de-motivated.
So, to summarise, don’t stop incentivising during tough economic times, but don’t assume cash alone will be enough to motivate your staff. Do keep your employees top of mind, communicate effectively, and do focus your spending on the appropriate incentives package.
There are a number of prepaid providers such as The Logic Group and Corporate Pay who can help you understand more about how prepaid cards can (and have been) used to influence employee behaviour. They work with businesses of all sizes, and can offer advice on how to ensure the fastest short term return on investment, which is visible and easily manageable over the longer term.
Kevin Harrington is MD of Global Prepaid Exchange, the widest reaching prepaid industry organisation in the world with a membership that spans four continents. Their mission is to ensure that all sectors of the economy understand and exploit the massive potential of prepaid to solve business and consumer problems, or just make life better and simpler.
For more information on how prepaid can help your business visit www.globalprepaidexchange.com