Will my job exist in the future? Is my current position secure? These are questions employees at all levels often ask themselves. As difficult as it may be to assess your own prospects, the task becomes almost impossible when you have to assess those of others. What’s the best way for a sales manager or HR executive to respond when employees come anxiously forward with these questions? Furthermore, how can leaders support employees who might feel undervalued and doubtful about their future? When top talent or great promise is at stake, can a long-term solution be found in offering a bigger bonus? Can a traditional incentive compensation plan clear their doubts?
With technology’s capacity to apply logic, knowledge, analysis, and even intuition to everything around it, from a game of Go to a coffee-selling robot, the fear that your best skills and talents are becoming obsolete is natural. Whether you’re a gifted salesperson, a young marketing executive or a seasoned product manager, your career path is not easy to anticipate. Fortunately, most modern companies value their staff, and strive to secure great people rather than offer “great jobs.” Top talent is difficult to attract and attain, and even more difficult to retain, so the inherent worth of a motivated, hard-working employee can’t be underestimated.
Many companies already offer nonfinancial benefits to their top performers, but few managers consider them part of a larger scheme of overseeing a successful team, and even fewer make them widely available to their entire staff. This leads to less engagement, and, consequently, to less productivity and trust in the company’s management.
Incentive compensation management can definitely help improve your employees’ motivation, but it’s not enough to ensure their long-term commitment. To succeed at that, you need to blend incentive compensation with your general strategy, involve your HR department, and think outside the box. In fact, you have to behave with the understanding that the box no longer exists, and break down the barriers between your employees’ investment in work and their investment in living. Treat one as the extension of the other. For example, you might consider establishing a personalized career development plan for your employees, one that involves a wide array of nonfinancial benefits, including professional courses, personal development classes, and social events for the entire team. These may include happy hours, volunteering possibilities, running or other exercise groups, after-work outings, and competitions.
Before you begin to map out the kind of strategy outlined above, ask yourself if it’s possible for you to integrate nonfinancial rewards into your current compensation plan. If so, what do different types of rewards bring to the table at your particular company that a conventional bonus system does not?
1. Nonfinancial Rewards Open up a Dialogue
Sometimes, conducting individual interviews is impossible due to the size of your company. But that doesn’t mean you, as a manager, shouldn’t find out what your employees value in a work environment. Consider using an online platform to get feedback, or request help from HR and the leaders of other departments. The mere fact that management is interested in an employee’s career path and aspirations will help consolidate the latter’s trust.
Because people spend most of their time at work, sometimes more than 45 hours a week (according to the Washington Center for Equitable Growth), they tend to look for companies that can provide a friendly environment in which employees can relate to their colleagues in terms of personal development and non-work related activities. Bringing people together makes a company stand out.
Furthermore, knowing what employees want in terms of training and courses can also help you better understand the availability of your current resources and even reveal possibilities for expanding your employees’ expertise. Making sure the employee-management dialogue goes beyond compensation issues is a necessary step to building a solid company culture.
2. They Increase Loyalty
Now, let’s say you’ve set attainable goals, increased individual bonuses, and started a real dialogue with your employees. Things seem to be going well, yet employee turnover is as high as ever. At this point, you might be getting the impression that your employees are stuck in a rut and want to explore other job opportunities. You have it in your power to help them feel valued, and to thrive. But again, you need to think beyond financial rewards, and either find or create the types of incentives your employees will respond to.
No matter what conventional wisdom might say, your best production people, sales reps, and marketing specialists are not always on the lookout for a raise. They might be in search of something more personally meaningful. Some might indeed be ready for a promotion, but are unsure about their ability to cope with more responsibility or handle a leading position. Their fears could be dispelled with extra training, or even formal education.
Others may, without even knowing it, be ready for a lateral move within the company. Your leaders should be able to identify these people and create suitable opportunities for them. A shadowing program, for example, which allows an employee in one position to learn from someone in another, can be energizing; similarly, an in-house test laboratory, which gives employees direct contact with your products while familiarizing them with the work going on outside their respective departments, can help create a new sense of purpose and unity among members of your staff. These types of programs make the difference between a good employer and a category leader.
Many employees will gain great satisfaction from participating in non-job-related activities that they’ve never had the courage to pursue on their own, but which, with a little push or as part of a team, they’d take on with spirit. Also, companies can offer volunteering opportunities; after all, it’s as true as ever that “doing good means feeling good.” These same companies might encourage book clubs or sports clubs, or even activities that may include competitions with other companies.
In some cases, a company can even help its employees achieve what they consider to be “impossible” in terms of personal goals. For example, an ardent biker might have a few personal records to break, records which become much easier to attain once a few of his colleagues and his employer are in on the challenge.
3. They Increase Specialization
Since we are part of a constant technological boom, gaining essential skills and abilities might require more than practice alone. In fact, a 2015 Harris Poll, referred to by The Society for Human Resource Management, claims that 36 percent of workers worry about their ability to acquire new skills, while another 36 percent believe their current skills won’t help them earn a promotion. Some employees will need the company’s help to tap into areas of their skillset that they aren’t routinely encouraged to draw on. With targeted courses and a tailored approach, the company can build the employee’s latent potential and put his or her skills, whether newly developed or deeply entrenched, to work. These skills will undoubtedly yield benefits all around.
4. They Offer a Dependable Recruitment Pool
If a valuable employee feels the need to expand or even change his or her current position, management can, instead of feeling threatened, approach the situation by offering guidance and by progressively training that person for the role he or she aspires to. The company might even promise a different position to the employee on a contingency basis, should one open up. Often, offering employees the chance to practice their skills on a small scale can be enough to secure their loyalty. Not only does offering flexibility benefit the employer, but it also helps prevent employee burnout.
5. They Boost Your Employer Brand
Finally, nonfinancial rewards and a clearly communicated employee development plan will turn your company into a highly-desired workplace, the perfect environment for employees to expand their horizons.
Job security is only one of the questions that may trouble your employees, and a motivating incentive compensation plan only offers some of the answers. However, once you align it with your general strategy, you can move onto expanding the capabilities of your existing sales compensation platform to integrate nonfinancial rewards. Implementing these changes is both a visionary and necessary move that will ensure the top performers in your organization today become the company leaders of tomorrow.
Make Complexity Work: How to Turn ICM into a Competitive Advantage
With so many moving parts, managing incentive compensation is complicated. But the best ICM plans are those that embrace complexity and turn it into opportunity.