Motivators: Which ones work…and why?
Non-economic motivators have a long history and have always been used to bolster workers’ pride. These include preferred parking places, service awards, special recognition for those reaching certain milestones, service lunches and Christmas parties. Although they offer little positive motivation, their absence or curtailment is resented, which perhaps explains why, as the charts show, companies continue these efforts although they question their effectiveness. These efforts should be continued because they sustain employee morale. However, they have little direct effect on workers' daily effort or on-the-job behavior.
Most executives expect economic rewards for their own better performance. Their performance might be improved company profitability, increased per-share earnings, or higher stock prices. As the 2005-2012 charts show, astute concrete industry executives have learned what is good for the goose is good for the gander, and are extending economic incentive programs deep within their organizations.
Profit sharing plans are widespread, as are merit raises and discretionary year-end bonuses. Unfortunately, many merit raise programs are disguised general increases (if everybody “earns” the same "merit raise," where’s the merit? Or motivation?). Most year-end bonuses are based on whim or ill-defined, illusory criteria.
Many executives think their discretionary bonus programs are quite effective — perhaps because they are the ones who authored them. Sadly, vague programs produce vague results, rather than specifically focusing employees on daily performance. Year-end bonuses are popular — nobody rejects them. But if asked, few employees can answer the questions: What specifically did you do to earn your year-end bonus, and why did you earn the amount you were given?
Economic motivators influence day-to-day employee behavior effectively if they are easy to understand and match the short-term horizons of the workers whose efforts they are designed to affect. Employees may not have a “line-of-sight” long enough to equate what they do today with an ill-defined year-end raise or bonus, to say nothing of a profit sharing plan paid 20 years from now on retirement.
The precast executives whom I interviewed reported pay-for-performance programs with frequent payouts coupled with vigorous supporting communications efforts are the most effective in “engaging” employees to focus on daily productivity requirements, and in reinforcing their desire to cooperate with management in eliminating waste. That short-term rewards are effective is not surprising when Wal-Mart, America’s biggest retailer, reports the number of customers living paycheck-to-paycheck “remains pronounced,” due to “continuing economic pressures.” (WSJ Aug. 16, 2012). This need for immediacy perhaps explains why, as the charts again show, precast producers feel their deferred reward programs are becoming less effective.
As the charts show, the survey found gainsharing was the most effective short-term motivator of them all. Gainsharing is a group pay-for-performance program under which employee performance is quantified and given a dollar value. When it improves, the value of the improvement is split with the workers. So for every dollar paid out to workers in gainshare bonuses earned by specific measures of short-term performance a company saves a like amount in higher productivity (more panels per shift, say), better quality (fewer surface defects and time consuming repairs, for example), and improved safety (reduced workman’s comp costs). Since gainsharing plans provide pay-offs earned on a short term basis (often monthly), employee notions that gainsharing is an entitlement are negated.
Engagement: The forgotten side of gainsharing
Sadly, many executives think workers on the lines respond automatically to a gainshare bonus. This is erroneous; effective gainsharing plans do require "engageonomics,” i.e., a vigorous communications program to engage workers to cooperate in improving production efficiency and product quality.
Employees welcome opportunities to earn extra money, now more than ever. Although no company singled out communications as a motivational tool, it is at the root of employee satisfaction. With gainsharing, frequent communications to employees regarding quality, productivity, and customer service engaged them to do their best in keeping their jobs secure — and their employer able to bid new jobs at competitive prices. Workers want to contribute, want to be successful. When they see management honestly soliciting ideas to work smarter by identifying and removing impediments to productivity and then responding to them, workers realize their efforts are important — and valued. Call it motivation, involvement, or engagement, whatever! The process is effective.
Adding it up
The subtleties of persuading employees to make increased efforts are lost on many executives who focus on computer print-outs to check costs and production schedules and ignore the importance of good employee communications.
Many concrete industry executives have little time to debate what is effective — economic or non-economic motivators. They need immediate, practical answers on how to boost productivity so they can submit competitive job bids and stay in business. The charts show the most successful companies use both ways — first providing group economic rewards to workers working as a team to help achieve company productivity goals; and second, using effective engagement efforts — communications programs to reinforce the economic motivators and create a sense of unity.
Injured by the Great Recession of 2008-2009, scarred by the anemic recovery, and fearful of the future, today's employees are oblivious to buzz words but can best be convinced to try their best when they find their rewards in their paychecks.
What are you doing to give them the rewards they value so highly?
Contact Dr. Woodruff Imberman, president, Imberman and DeForest, Inc. at info@IMBDEF.com or www.IMBDEF.com for further information on creating a high-motivation workforce, or details about gainsharing.