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Compensation Cafe: Employee Engagement and Incentives Compensation

by Derek Irvine

Compensation CafeRecognize This! – Employees choose to give more and behave in desired ways based on the environment they are being asked to engage in.

Employee Engagement Is Dead! Long Live Employee Engagement!

What sounds like a non-sequitur may not be. Last week on Compensation Cafe I blogged: “Is Employee Engagement Moot in Today’s High Stress Work Environments?” in which I reflected on the seeming stagnation of employee engagement stats in the research across many organizations. I argue:

No, the error lies in how we are pursuing employee engagement. Yes, employee engagement is a two-way street. Employees must themselves choose to engage in the work, but employers must also offer conditions in which employees would want to engage. That’s where we’ve fallen down.

What must change? It’s time to go back to basics. Why should employees choose to engage in the organization’s greater mission, purpose, and goals and give additional discretionary effort to achieve them if (1) compensation is not equal to market rates or is insufficient to cover basic living needs, (2) the work environment is itself unsupportive or downright abusive, and (3) essential human needs of rest, restoration and the ability to meet the needs of the whole person are ignored.

Read the post for more on the backing research and how to change those three factors to improve employee engagement.

Then today, I blogged “The Tricky Business of Incentive Compensation,” examining research on when and how incentives can motivate, given the typically low performance of such schemes. As I unpack in the post:

What they found was that incentives largely worked… but only for certain people and in certain circumstances… If companies are primarily concerned with behavior that aligns to performance, shifting focus away from pre-designated incentives structures towards “surprise” programs that can recognize and otherwise reinforce those behaviors may be a valuable path forward. For example, if managers are recognized and publicly celebrated for a willingness to take risks like those mentioned above, the signal may be that much stronger for others to overcome that initial sense of inertia.

Again, click over for the full post.

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