Engagement can be a catch-all buzzword – so what does it really mean in practice? Helen Swire asks how employers can really motivate their employees
“Love your staff to bits and they’ll love you back,” says John Timpson, chairman of multi-service business Timpson. A simple enough idea – so why then, do only 37% of staff admit that they feel engaged at work, according to research from Red Letter Days for Business?
Red Letter Days’ chief executive Bill Alexander has one possible explanation. He says: “Employees need to ‘feel’ the company’s culture more.”
So is company culture the key to motivating employees? Or is it about incentive and recognition?
A poll by Sodexo showed that 55% of HR managers do not have a reward programme. Jamie Mackenzie, Sodexo’s marketing director, says: “Many organisations struggle with the basics of reward strategy – from deciding what the various elements are intended to achieve, to measuring what actual impact it has on the bottom line.”
In truth, motivation and engagement mean different things to different people. “Approaches vary according to the organisational culture. Cultures that are based on traditional management styles often focus on extrinsic motivation reflected in monetary compensation and benefits,” says Vlatka Hlupic, consultant and professor of business and management at Westminster University.
“Organisations whose management style is focused on people look more on intrinsic motivation, giving employees a sense of higher purpose and pride, and allowing them autonomy to pursue ideas and make decisions on the basis of their knowledge, rather than their position.”
FINANCIAL VERSUS PERSONAL
While financial recognition, for example a bonus, may provide short-term gratification, it is this intrinsic motivation – for example non-financial recognition and incentivisation – that is becoming increasingly popular.
The trend towards non-financial reward has to a degree been driven by recession-hit employers – many of whom are only just experiencing growth again – but putting this slightly cynical element aside, employees are also looking for something more than financial recognition.
“Monetary rewards are helpful but, above all, most staff are seeking autonomy, purpose and opportunities to grow and develop,” Hlupic says. “Pay rises are welcome but are not generally enough of a motivator, especially for knowledge workers and Generation Y.”
According to recent research by Towers Watson, companies with non-cash rewards and incentive programmes had revenues that were 6.6% greater than those that did not – and there are plenty of programmes to take advantage of.
The reward could be anything from a gift card for a favourite shop to an experience day voucher, or longer-term packages.
Home improvement supplier Wickes, for example, offers companies a corporate card to help employees save up their reward, giving them the opportunity to spend a much larger amount on something they want or need – and also the freedom of choice around what their bonus is actually buying for them.
Frequently, the benefit that is most highly valued is not one that makes an impact on a member of staff’s immediate or short-term finances, but one that has an impact on their daily home and work lives: family-friendly policies, shopping discounts, or the opportunity for learning and development through courses.
“Reward packages that give staff the option to invest in their home are particularly popular,” says Natalie Vescia, B2B marketing and client relationship manager at Wickes.
“Solutions that allow employees to make the most of the place where they spend the majority of their time when not at work will help increase the feel-good factor towards both the reward and employer.”
That is not to disregard the power of an on-the-spot reward, as Timpson proves. The company’s motto – ‘great service by great people’ – is supported by the range of personal and spontaneous benefits line managers can give out to acknowledge work well done.
Among the rewards Timpson staff can enjoy are their birthdays off, free use of one of eight holiday homes and a week off when they get married – but managers also have the ability to give staff rewards however they see fit. These can include giving staff a Friday off, wine, chocolates, special scratch cards that reveal rewards or, indeed, whatever else they think suits.
Other perks include holding once-a-month ‘Dreams Come True’ rewards, where area managers can make one person’s dream come true. A recent example was paying for a member of staff to fl y back to Barbados to see her father for the first time in 16 years.
Speaking at Reward Live, John Timpson said: “Fundamentally, we hire the best people and then make sure we keep them. Any excuse we have to celebrate someone is an excuse we take. I actively encourage managers to spend their entire social fund.”
THE POWER OF THANKS
This concept of ‘celebrating’ employees is key – instead of thinking of staff collectively, there is a growing importance for employers to consider how their people think and feel and thank and value them individually.
So John Timpson’s (arguably unconventional, but undoubtedly successful) approach empowers managers to reward their staff as they think is appropriate – and to do so personally, right up to the top of the business.
“Appraisals are a total waste of time. If I want to see how people are, I speak to them directly,” he says. “And when I reward performance I send them a real letter, written by me with real ink, and featuring a real stamp.”
Former Secretary of State for Employment David Blunkett implores businesses to do more to understand how employees think and feel in their organisations.
“We need to get across that being a diverse business means being a better business, but employers need to stop making presumptions about how staff actually feel,” he says. “They need to think more about whether they’re meeting their needs.”
Understanding what people want emotionally from their workplace doesn’t cost employers anything, but is invaluable to the individuals themselves – it’s simply a matter of managers listening to what the basic needs of their staff are, and what they will most value.
Blunkett argues: “Rewarding people correctly is pretty simple; if we treat them well, we’ll get the most from them. Get staff to ‘buy the ticket’ [the company culture] and there’s a good chance everyone will want to work positively.”
To make this kind of motivation and recognition really work, however, it must be a top-down approach, and line managers must be allowed to lead the way in thanking and supporting their staff.
“A truly effective motivation strategy should focus on developing an innovative and collaborative culture, building trust and transparency and distributing formal authority and decision making,” says Westminster University’s Hlupic.
Line managers having the confidence and the managerial green light to at least praise staff when they see fit engenders a more immediate form of reward, and therefore a more personal connection with both their team and the company hierarchy.
BUILDING AND MEASURING SUCCESS
So how can employers create a successful strategy to motivate and engage their workforce? Many options are available – but the adage that ‘no one size fits all’ really does hold true. Perks might work for some organisations, and simple thanks for others.
“You need to ask what will make your company more valuable,” says Wayne Clarke, partner at The Global Growth Institute. “To me, a successful motivation and engagement strategy would result in people feeling invested-in and developed, and that it is realistic in line with what they have the potential to achieve in the company.”
Clarke adds that employees must first understand both the reward strategy and the future direction of the organisation; secondly, understand what they need to deliver; and thirdly they must be able to see that they are being valued and recognised for delivering what is expected.
“If you, as an employer, get those three simple steps right,” Clarke says, “you’ll also see your employees’ motivation and engagement increase.”