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Let’s talk incentives! 💸 Material and non-material incentives both play crucial roles in keeping your team motivated.

Material part is usually covered by Labor Remuneration System (LRS). But don’t underestimate the power of perks like an individual development budget, or that free holiday trip for internal contest winners 🍹; they are also categorized as material, although “flavored” with a non-material component.

Now we all know that money talks, but is it really saying what you want it to? Here are a couple of thoughts:

1. Linking pay directly to performance does not affect the efficiency of most hired employees. Money per se is not the main motivator; the main motivator is the desire to keep the job – if it is attractive enough. Of course, the relationship between reward and effort is a factor in this attractiveness; however, it is only one factor. Ultimately, attractiveness of the employer as a whole is what defines the attractiveness of the job.
2. If you do want to link remuneration to results, remember that “soft” (subjective) evaluation is just as valid as a hard, quantifiable one. Of course, hard criteria are a) more convincing and b) easier to use. However, not every result can be quantified. Therefore, a complete rejection of subjective criteria is a violation of managerial logic.

Non-material incentives are those tools that have a purely emotional meaning. For example, when you award an employee with a corporate badge of honor, or make a company-wide mailing listing their achievements and expressing gratitude. The main thing to remember here is that the non-material incentive should correspond to the leading motive of the employee, and everyone has different leading motives (priorities, values). One values recognition, another values status, yet another values family relationships. A “common measure” does not work here.

#EmployeeIncentives #HRStrategy #WorkplaceMotivation #Compensation #Leadership