A leader early in my career told me “Your most valuable assets walk out the door every day, your most important job is to make sure they come back tomorrow.”
Employees, teammates, associates, staff. What every name they go by; your people are the most important assets of the organization. More important than capital, more important than brand, and yes, even more important than members. We know that organizations with engaged teams operate at a much higher effectiveness than firms without engaged teams. Yet a Gallop study reports that, on average, only about 34% of employees are engaged, and that 12% are actively disengaged. 66% of the most important asset of firm is either not engaged or actively disengaged – talk about a management challenge and a massive opportunity!
Changing those numbers should be a top priority, but how to start? Setting goals, rewarding successes and recognizing engagement is an important part of an effective culture, and we have used Behavioral Economics to provide our clients with several insights into the way employees react to various engagement efforts. Successful programs include several concepts:
- Praise is important, but it’s not enough. An effective program includes public recognition and celebration and incorporates a reward. Celebrate those moments as broadly as possible; include them in your social media and member communications.
- Cash is often not the best motivator in recognition programs. In surveys people report that they want cash rewards, but studies have consistently shown a much higher lift in performance when non-cash rewards are used. How much should you allocate to non-cash recognition programs? Top performing financial institutions budget around 8% of employee compensation for their recognition programs.
- Establish clear goals and provide an effective and easy way for the staff to track progress. Employees need to know what is expected and have access to regular updates to show them the progress they have made toward the goals. Don’t keep them in the dark.
- Team goals are often more effective than individual goals. Putting teams to work on goals can create a powerful multiplier effect that is often lost when individuals feel they are pitted against others in the organization.
- Set shorter term goals. We are often focused on annual targets, but behavioral economics shows that the closer we are to a goal the more motivated we are to reach it. Convert your old annual targets into quarterly, monthly, or even weekly or daily goals.
- Make sure you are recognizing and rewarding as close to real time as possible. Don’t let time evaporate the linkage between the desired behavior and the reward.
- Consider a reward option that allows a winner to contribute their award to a charitable organization. You might do this by converting a non-cash award to a cash equivalent for donation, or by converting the award to paid time-off allowing the winner to volunteer at a charity. Studies show that philanthropic activities are becoming increasingly important to your team.
An effective culture is key to employee engagement and there are several areas that drive the creation and nurturing of culture. The way you recognize and reward will tell your teams what you value; make sure your programs do that effectively.