Incentive programs are woven into the culture of modern business practice. They are intrinsic to how some companies approach motivation and often serve as their only employee-focused system.
However, it’s a widely debunked myth that incentive programs are about the employees.
The truth is that they’re usually about money.
And yet, thought leaders in the productivity and employee motivation industries continue to tell businesses that if they want to succeed, all they have to do is tie a carrot to a stick and place it just out of their team’s reach.
Why is that?
Employees Aren’t Laboratory Animals
Many thought leaders, business gurus and C‑level executives stand behind this practice because that’s what behavioral theory dictates. Animals in laboratory settings will work harder if it earns them something special. Why wouldn’t human beings work in the same way?
Because human beings are not lab rats hunting for a block of cheese to satiate induced hunger. Human beings aren’t just motivated by money anymore. They’re motivated by happiness, freedom, humanitarian and social causes they value. Companies can’t just hold up a fistful of cash and call it successful employee management. They must reinvent the way they approach motivation.
The essential mechanics of employee retention and inspiration are fast-changing, and conventional incentivization is a relic of the past. Here are five problems with incentive programs that are impossible to ignore.
1. Money Isn’t Motivating
The idea that people aren’t motivated by money anymore shouldn’t be confused or conflated with “people don’t value money.” 84% of Americans are financially stressed. Fair and adequate wages should remain the goal for all businesses. Money is still necessary — it just isn’t motivating.
When asked what people care about most, money ranks relatively low on the list. There’s no reason to believe that financial incentives promote better performance or more work. Instead of waving money at their team, employers should think of new and innovative ways to provide the things that actually matter to their employees.
2. Less Motivation, More Stress
The drive to achieve is fundamentally human. So, if an employer sets a goal, their employees will (usually) do everything in their power to reach it. This can be problematic for two reasons.
Employees will push themselves in ways that can be emotionally and physically stressful, which can have a negative impact on their well-being. Not meeting these goals can make them feel deflated, undervalued and even more stressed. These issues can cause a severe drop in morale and can spread through teams like a virus.
Employers should promote an atmosphere that decreases stress and recognizes individualized talent.
3. Lack of Rewards = Punishment
Receiving rewards can feel great, but not receiving rewards can be a powerful demotivator. Employees may even begin to equate their ability to reach goals with job security. It makes sense, right? Why would a company keep someone around who can’t reach the lowest metric of optimal success?
That’s when incentive programs become damaging. Fear and coercion destroy employee motivation. If employees feel that their work is undervalued or that they may be in danger of losing their job, they’re more likely to look for employment elsewhere.
4. Competition Fosters Toxicity
Some incentive programs work to encourage competition between employees, which may create a toxic work environment. Employees should be driven to work together, not against each other. Productivity, motivation and overall job satisfaction may all plummet if/when employees are expected to work in opposition with each other.
Instead of incentivizing competition, employers should promote teamwork and camaraderie. This will result in happier employees, higher productivity and healthier working conditions.
5. Wellness and Well-Being Are Not the Same Thing
Wellness programs are popular because they serve as a cost-cutting measure for businesses. They are created with the hope that employees will become healthier, thus saving money on potential medical absences and healthcare costs. Some companies have even begun to financially incentivize participation in these programs.
Human Resource Departments will coordinate with Wellness Incentive Programs, offering small amounts off of their healthcare premiums or other medically-related incentives.
The problem? There’s no data that supports the idea that these incentives or programs result in improved employee health. In fact, they are proven to have little impact on an employee’s health and well-being. So, why do companies provide incentive programs?
Obviously, people should be able to prioritize health and wellness. That’s a fundamental right to life. Being healthy can be critical to happiness, life longevity and freedom. Unfortunately, wellness programs are riddled with issues. They famously lack inclusivity, ignoring employee disabilities, dietary restrictions, cultural differences and financial constraints.
They simply don’t consider the whole picture. Their purpose is to promote diet and exercise, while what most people need is complete well-being. Companies should focus on providing physical, mental, emotional and financial support to their employees. This begins with understanding who their employees are and offering them benefits tailored to their individual lifestyles and needs.
What Is the Goal?
Companies need to think more holistically about what they’re offering their employees. Who do these incentive programs benefit, and what are their outcomes? Should companies be worried more about their bottom line or the betterment and wellness of their employees?
The answers to those questions are easy. Companies should prioritize employee well-being over the perceived, potential and minuscule financial gains they receive from problematic incentive programs. The truth is, they just don’t work for the modern employee. It’s time to try something new.
Offer Personalized Lifestyle Benefits
Fringe has a customizable lifestyle benefits program that is simple. Employers give points to their employees. Employees log into the platform and use those points to choose from over 100 different lifestyle benefit options.
Personalized benefits enable employers to motivate their team with benefits that actually matter to them. Plus, personalized benefits are proven to increase performance and job satisfaction. Rather than continuing to use tired methods that are inefficient and ineffective, revolutionize the way your employees are motivated. Contact us today to schedule a demo!