How to Incentivize The Right Way
Why are traditional approaches to employee recruitment and retention destined for failure in the new economy? Because they ignore what neuroscience tells us about what forms lasting bonds between people and the workplace.
Businesses routinely focus on the “offer,” money and benefits. In today’s creative workplaces, many companies are now showcasing more unconventional incentives such as recreational games in the office, kitchens stocked full of fun snacks and drinks, or opportunities to work remotely. While on the surface, these perks may make some employees happy, they do not necessarily create the emotional bonds that connect employees to the organization.
The Impact of Talent Shortage
After more than 90 months of continuous job and economic growth, capable talent in industries ranging from construction to agriculture to high tech is scarce. This scarcity has not only put rising pressure on wages, it has created expectation inflation in the eyes of many employees. Gone are the days when the majority of new entrants to the job market grab the first offer with a sigh of relief. Demand is high; choices are increasingly abundant.
The temptation for employers worried about staffing for growth is to keep sweetening the deal. That seems to make sense in an economy with more than 6 million unfilled jobs. While new recruits may be drawn in by the initial offer, in the end they stay not because of what they got, but because of how they feel.
The growing talent shortfall has generated lots of interest about how to better satisfy employees, and there is little question a happy person outperforms a grump. So why not cram the corporate culture with foosball and other perks?
What Does This Mean For Leaders
Employee satisfaction is the wrong entry point for creating sustainable, high-performance workplace environments. Why? Because satisfaction is just an attitude, and it can be hard to satiate over time as this morning’s perk becomes this afternoon’s entitlement. Attitudes can also pivot on a dime. One minute people are thrilled with across the board wage hikes, the next minute the positive sentiment balloon bursts when someone spreads the narrative, “yeah, it’s nice, but they finally just caught up to where they should have been years ago…”
Employees thrive when they are engaged at an emotional level with what they do at work and who they do it with. We are wired this way at birth - to form trusted, reliable relationships with others that in turn delivers a felt sense of unparalleled safety and fulfillment. Stated differently, satisfaction is an attitude born from an emotional experience; employee engagement is the emotional experience.
Humans crave positive social interactions. When employees feel positive emotions, born from these safe and secure social connections, they can think more clearly and creatively. When they feel supported and trusted, they can forge strong connections with other employees and their managers.
Therefore, the right entry point for increasing - and maintaining - retention is to encourage a workplace culture where employees are engaged and thriving, surrounded by health-giving relationships and where the path to success is predictable and consistent, and accountability is assured by a shared sense of social identity rather than by bribe systems, hierarchy, and punishment.