Motivation and incentives
Motivation and Incentives
Just how important is money when it comes to incentivising hard work and retaining executive talent? We sat down with Hanover Fox’s very own Mark Rowley to discuss the subject that, at least in the UK, has always been rather taboo.
“Pay satisfaction and job satisfaction are different things,” says Mark. “But to be fair, they go hand-in-hand. We all want to get up in the morning and earn a good day’s pay, we want there to be a good mechanism of bonus and potential beyond that – but that doesn’t mean you have job satisfaction.”
Pay satisfaction isn’t always the most important factor when searching for a new role, and in fact, highly paid individuals by and large don’t move jobs simply to earn more money; often they’re looking for new challenges.
“Over many years, I’ve interviewed candidates and people who have been very highly paid but didn’t enjoy what they were doing. And that’s the reason why we’re meeting them in the first place because they have reached the buffer. They have taken a relationship to a certain level and they need to move away from that. They need a fresh challenge. They need new personalities. They need new products, and they need to see their career moving further forward,” Mark says. “Pay is a big thing, don’t get me wrong. But it’s the satisfaction around the job content and the people you’re with which remains the dominant factor. Really, it is becoming much more attuned to career development moving forward.”
Increasingly employers are offering executives variable financial incentives, such as stock options, to keep employees motivated, but this is not without its own issues.
“It can bring out the good and the bad in people. There will always be that element of individuals who will see, particularly within the short-term gain, what can be achieved by a little bit of financial reporting manipulation. It’s a shame it does happen, I think probably it’s getting less because there is much more compliance around it now. And transparency is much more of a common feature.”
There’s no hard and fast right or wrong way when putting together performance-related activity and benefits because every individual will have their own agenda.
“A performance-related package for an engineering mindset will be very different to a commercial one. But it’s identifying which trigger points are suited to an individual, making sure that they’re always reviewed and always updated when necessary and speaking to people. It is fine saying our benefits are A, B and C – but let’s have some communication,” Mark says and thinks it’s down to the individual. “You know, what would you find as a middle manager to be a motivational factor? What is it that you would like to see in a benefits package to really put the spring in a step [of someone] to come to work in the morning?”
Of course, benefits don’t have to be financial incentives – workplace benefits can be around flexible hours, working from home and so on, with an increasing focus around well-being becoming more important.
“You’d be surprised how many people won’t be so interested in talking about the financial side when negotiating for a new role, but rather they’ll be talking about the softer benefits. These could be benefits based around childcare, or health issues. Everybody has their own agenda.”
Benefits aside, sometimes the best motivator is instilling the desire to be number one in your team.
“If you look at Lee Iacocca, he made a great success during his time at Chrysler. Clearly, he had that desire, which then trickled down to the senior teams around him and on further to the design teams, the engineering teams, the production. And it worked,” says Mark. “That was his personal drive and motivation. If you take that example, but you put it into other individuals who have different aims/agendas/motivations – if we could all harness and channel that motivation into our own functionality and own work environments – a lot of companies would move forward more swiftly and more quickly than they currently are. But as I say, it’s identifying that with individuals. What is their motivation?”
Technology now allows performance to be instantly analysed and some argue that the rise of things such as cryptocurrency will alter exactly what incentives people expect in return for their labour.
“Technology allows us to do this now. It is very straightforward. We all have portals, we all have dashboards, and this information could be analysed quite swiftly,” Mark adds. “I think, over the next five years it’ll happen more. You’ve got to look at cryptocurrency as well. I mean, that’s taking a stance. When you put the lights on Elon Musk saying that he might be able to sell cars to crypto-investors, then you can filter that into the working environment and pay and rations as well. How’s that going to alter the landscape in five years? I think we’re on the verge of change and that change is now beginning to happen.”
Finding what motivates an individual or a team, in general, is hugely important for any manager to hone in on, as these are the things that drive people forward to deliver much more effectively and efficiently.
If there are any motivation factors that you’d like to discuss with us, or you’d like to delve more deeply into this subject, then please don’t hesitate to drop us a line.