The average disengaged employee costs your company up to 34% of their salary every year, according to Gallup research. If you assume professional salaries average out around 60k, each disengaged employee costs your company over $20,000. Employers have been well aware of the disengagement trend for at least the past five years. But most companies still struggle to identify measurable ways to improve engagement.
Employee engagement is a complex mix of interest, purpose, energy, and devotion that’s often hard to quantify—but the most crucial contributing element is motivation. And employee motivation is a metric we can easily isolate and improve.
Traditional performance management strategies are used almost ubiquitously to increase motivation and performance in the workplace. Department heads set goals, employees try to meet them, and take part in an annual assessment where they receive consequences or rewards according to their progress. This outdated system is losing popularity fast. Not surprisingly, research shows that only 20% of employees feel motivated by the way their performance is being managed.
It’s time to rethink the way we incentivize, recognize, and reward employees for their hard work—starting with a revamped goal-setting process.
Better Goal-Setting = Better Performance
We’ve all been taught how to set S.M.A.R.T. goals. Professional leaders are adept at designing employee goals that are measurable, specific, and attainable. But where companies fail is in assuming goal-setting must be a top-down process in order to be successful. According to Gallup, only 30% of employees report that their managers involve them in goal-setting—but those that do are 3.6x more likely to be engaged than their coworkers.
Your company needs comprehensive metrics. You depend on company-wide goals that drive the business forward into greater profitability. But employers who fail to involve their employees in the goal-setting process end up setting goals that feel fabricated or arbitrary to the team members they’re trying to motivate. And by setting goals from the top down, you’re communicating to employees that you don’t trust them to make good judgment calls about what really matters to the success of your business.
Every time you set metrics on a company-wide scale, speak with your employees first. Let everyone from your management staff to your entry-level techs have a voice in your company-wide goals—and educate them all on which goals will result in greater success for the company as a whole.
On an individual level, try goal-setting in one-on-one meetings that encourage each employee to set goals that matter to them. They’ll be significantly more motivated and have a much higher probability of earning the incentives you provide at the end of the year.
The Problem With Traditional Performance Management
That’s the other crucial half of the performance management balancing act: the incentives you provide after the goals have been met. Most companies still rely on the annual performance assessment to do most of their incentives. It’s both a negative and a positive incentive—either an employee walks away from the conversation with a raise, or they walk away with a performance improvement plan. From an employer perspective, this positive/negative combo might seem like a win-win.
The problem with traditional performance management strategy is that it’s overwhelmingly punitive in nature. Most employees dread their annual performance reviews—even those who know they’ve done really great work all year. Employees who consistently receive praise and monetary rewards still feel nervous walking into annual review meetings.
In today’s culture-focused corporate workplace, traditional performance management tactics just don’t fit.
How to Incentivize Employee Motivation and Performance in the Workplace
Instead, try incentivizing your employees through a meaningful rewards program. We’re not talking about the annual travel rewards or points systems that only reward the top 5% of your workforce. We’re talking about metrics-driven programs that actually result in increased employee motivation and performance in the workplace.
The best employee incentive programs are designed specifically to fit the needs of your company. They’re based on measurable, attainable goals that you and your employees set together. Earning rewards is a monthly or quarterly occurrence, rather than a once-per-year event, for every single employee on the floor. And employees are incentivized by high-value rewards that come with bigger bragging rights than your annual president’s club award.
A successful incentive program balances the yin of proper goal-setting with the yang of high-powered rewards. Try using a program like this in place of your performance management strategy and see how much you can improve employee motivation.
There’s no instant solution that will improve employee motivation and performance in the workplace overnight. But implementing a killer employee incentive program might be the quickest way to reach that goal. A custom rewards system will help your company reframe the way you set goals and monitor yearly progress on both an individual and department level. If you need to revamp your performance management system, try starting with the power of meaningful non-monetary incentives. Your employees—and your profit margins—will thank you.
At Inproma, we understand what employees really want. They’re looking for work experiences that motivate them and reward their diligence over time—and we’re providing those experiences through fully custom employee incentive programs. Let us show you how a great incentive program improves employee engagement and comes with a high ROI to boot. Let’s talk.