Many managers assume that improving productivity by raising morale is a long, slow process. But rewards and recognition programs can increase productivity in the short run as well. The trick is finding concrete ways of showing an active interest in employees, and their desire for a job well done.

This finding actually has a name: the Hawthorne Effect (named after the Hawthorne Works, a Western Electric factory just outside of Chicago). GE ran a series of studies for Western Electric at this factory in the 1920s and ‘30s, measuring employee engagement and productivity. GE was interested in what effects lighting had on workers doing assembly work.

The results were really odd: employees worked harder with any change in lighting, up or down. The boost would fade after a while, but would return when other changes were made.

Indeed, just about any change resulted in a small boost in productivity. Even undoing previous changes and returning things to normal.

After a while, researchers figured out what was going on. It wasn’t the lighting changes that were affecting the work. So long as there was enough light to see, lighting levels had little effect on worker output. It was simply the fact that the workers were selected, put in a special room, had their work monitored, and were interviewed by management.

In short, productivity increased when management took an active interest in what the workers were doing.

When these experiments were first conducted, people thought they were a failure. Not only did work environment matter little, but the researchers themselves skewed the results.  But they’re far from being a failure if we think about these studies in terms of employee engagement: employees do often improve their behavior right away when supervisors take an active interest. So there is a way to get more work, and better work, in the short run.

Still, there are cases where the wrong sort of attention can worsen work as well.  Employees can view the added attention as having an ulterior motive, or worse, see it as micromanagement.  The trick is finding the best ways to take an active interest for positive employee engagement. Or, in other words, how to recreate a positive Hawthorne Effect.

So how can you do this in your organization?

1. Pay attention, be supportive. If employees know that their performance is being measured, they will behave differently. Being supportive will change behavior for the good.
2. Tell them why you’re watching. Employees don’t always trust management. Let them know you’re keeping tabs so you can reward good work. And not, for example, to look for an excuse to lower their base pay or cut funding.
3. Reward good work often. If employees know that good work is rewarded often, they’ll have reason to keep output high. Frequent rewards also show that management is paying attention. Just be sure to keep things fair.
4. Give frequent, directed feedback. Don’t make them guess. Tell them what they can do to improve. Be specific.
5. Use praise and recognition. Beyond feedback, use praise and public recognition to single out employee efforts.

When management shows an active interest in employees and the work they do, there can be change for the better. So, the next time your organization is considering changes to improve employee engagement, look at the bigger picture, not small details like lighting.  Try taking an active interest with a more personal employee incentive program.

This article is the seventh in our Motivation in Mind series, an in-depth look into the psychology and neuroscience behind employee motivation. It seeks answers to questions about human motivation and how that motivation is shaped by the way people perceive, feel, think, act, and learn. More than a digest, news feed, or “how to” series, Motivation in Mind challenges assumptions about employee goals, conduct, and behavior to arrive at a more sophisticated understanding of corporate/employee relationships.

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Which is good news, because encouraging healthy habits is good for a company as well as individuals. According to one Gallup survey, unhealthy and overweight employees accounted for 450 million days of work lost total over the course of a year. To put this in perspective, that’s roughly three days of work lost for every single person in the U.S. workforce.

Numbers like this have moved businesses to try a number of wellness programs over the years. Some have been successful; some haven’t.  When it came time for Intelispend to adopt a program ourselves, we looked at some of the best practices that have emerged during this time. Our program, LiveHealthy, drove employee engagement by offering up to $150 in rewards for participation in wellness activities. The rewards were loaded onto one of InteliSpend’s co-branded prepaid DirectSpend® cards.

The results were immediate and impressive. We had 77% participation in completing the Health Risk Assessment and screening, 67% participation in the latest walking program, and several people who quit smoking. 82% of program participants surveyed agreed that the LiveHealthy program has had a positive impact on their health and well-being.

Even more telling is the bottom line: health care costs are down 2%, a far cry from the industry/region’s 6.2% rise in costs.

For more details, you can read the extended case study. The main point is that LiveHealthy is a fine example of following the 7 best practices for wellness programs. These 7 best practices tend to follow common sense, aligning with the rules that apply for any incentive program. Still, it’s a good exercise to see just how these practices work for wellness programs:

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Employees are people, and different people have different personalities. We know this. But can we use this fact to help us fine-tune human resources programs and policies? For example, can an employee rewards and recognition program be tailored to fit individual personalities?

And is it worthwhile to do so?

The answer to “Can it be done?” is yes.  Technology has developed. Rewards and recognition platforms are more refined. It’s now easier than ever to find an alternative to “one size fits all” programs. And naturally, personality is one dimension that could be used to customize your program.

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Retaining your talent requires much, much more than just maintaining the status quo. An improving economy means that people aren’t just “thankful to have a job.” More employees are exploring their options for a more satisfying job, and recruiters know this. So you can expect to see more recruiters trying to steal your best employees.

And yet, too many managers assume that a decent work environment and standard benefits will be enough to keep talent sticking around. If people aren’t complaining, the logic goes, then the company must be a great place to work.

But just because your employees aren’t complaining doesn’t mean that they’re “wowed,” either.

Take service anniversaries, for example. In one report, employees rated their service anniversary programs and future plans. Those that rated service anniversary programs as effective planned on staying at their company 4.1 years longer, on average, than those without a program. Even more telling, they planned on staying an average of 2.2 years longer than employees that had a program, but rated it as ineffective (Cicero Group, 2010). In other words, a good service anniversary program can encourage employees to stay twice as long as a so-so one.

So your employees might not actively complain about getting a gift for their years of service. Who would?  But if the “wow” isn’t there in your service anniversary program, you’re probably missing out on an opportunity to boost retention. So how do you give service anniversaries the “wow” factor? The answer will be unique to every company. But there are some good general guidelines for breathing new life into any service anniversary program:

1. Make it memorable. A service anniversary reward shouldn’t just be a cash bonus or a nondescript lapel pin that’s quickly forgotten. It needs to be something that the employee can actually experience and remember.
2. Make it meaningful. A reward will mean much more if it’s personal. But remember: whether or not a reward is meaningful has a lot to do with context. So be sure to recognize your employee’s specific accomplishments, using both rewards and recognition.
3. Make it a celebration. Find a way to celebrate the employee’s work. Make the presentation of the reward part of a bigger experience.
4. Make it simple. Catalogs and complex points systems both have their place in corporate programs. But don’t let your service anniversary program get too bogged down with merchandise choices and point conversions. The focus is on the employee and her or his accomplishments. Nothing kills a party quicker than another complex corporate program.

Consider your own strategy for talent retention. Does it include a service anniversary program that is memorable and meaningful? Does it have rewards and recognition? Does it include celebration? Is it simple and straightforward?

Or could your service anniversary program use an overhaul?

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Part of this complexity comes from the fact that emotions play a large role in workplace behavior. Some emotions, like camaraderie or appreciation, are positive and uplifting. Some are, well, darker.

Envy is a great example of one of these “darker” emotions. When envy crops up in the workplace, it can disrupt teams and allow gossip to fester. It can also curb employee effort. Allowed to grow, it can affect the overall office environment. All of this, in the end, undermines the organization.

The real problem? Envy is difficult to pin down. It is not something that can be easily measured. Few employees admit to feeling it. And even if they did, its impact on an organization can be subtle and indirect.

Even worse, there is little agreement about how to manage it. A great example comes from an article in the Money section of The Guardian. After explaining the need to recognize and tackle envy in the workplace, it gives this advice for managers that become the target of envy: “The best thing is just ignore it. Distance yourself. It’s their problem.” So much for recognizing and tackling.

But recognize and tackle you should. And especially if you have a hand in programs for employee incentives and recognition. After all, these are supposed to encourage good work and good ideas. But one employee’s rewarding experience can end up being another’s fuel for envy. With a few guidelines, though, your incentive program can actually help fight workplace envy:

1. Try to be aware of negative emotions, like envy. These might come across as attempts by employees to undercut one another. Or they might show up as gossip at the water cooler. Or as attempts to pass off others’ accomplishments as being inevitable accidents, not the result of hard work and talent. Be on the lookout for these early warning signs.
2. Keep the bonds tight. A recent study from UBC Sauder School of Business claims that much workplace disruption is caused not just by envy, but by envy fueled by workplace isolation. Make all employees feel that they are part of the team, and valued as such.
3. Monitor competition carefully. Internal competition can be a great tool for pushing employees to work harder. But when hyper-competition leads to envy, that’s when the problems start.
4. Make employee incentives and recognition plentiful. Envy creeps in when people compete for scarce resources. So, if incentives are scarce, or if credit and recognition are hard to come by, employees will undermine each other. But if everyone can work hard and be rewarded, employees will focus on their own efforts. And that’s the goal.
5. Take a hard look at your incentives and recognition. Are you being fair in distributing rewards? Are you finding ways to recognize everyone who works hard? Do you give regular feedback? Regular praise and recognition? Employee incentives and recognition should be both plentiful and fair.

If employees feel envy, it will hamper good work and goodwill if allowed to fester. A mix of awareness, fairness, and generosity with incentives can fight it.

This article is the fifth in our Motivation in Mind series, an in-depth look into the psychology and neuroscience behind employee motivation. It seeks answers to questions about human motivation and how that motivation is shaped by the way people perceive, feel, think, act, and learn. More than a digest, news feed, or “how to” series, Motivation in Mind challenges assumptions about employee goals, conduct, and behavior to arrive at a more sophisticated understanding of corporate/employee relationships.

The post Employee Incentives Can Foster Envy. Or Fight It. appeared first on InteliSpend Prepaid Solutions.

Sociologists call this “equity theory.” Basically, equity theory says that employees try to keep their work, and the rewards from it, in line with others. So if an employee thinks slacker coworkers are rewarded, that employee will slack off as well. And on the flip side, an employee would work hard for very little return, if that’s what everyone else is doing.

This is where the complications begin. When you look at employee incentives with equity theory in mind, it’s not a simple this-for-that motivation scenario. Modern neuroscience studies show that employee incentives are either more or less motivating, depending on how fairly rewards are distributed.

In one intriguing study, pairs of subjects were given the same “starting pay.” But one subject also received a substantial bonus. (Not exactly fair, is it?) Next, both subjects received more pay for performing a routine task with equal effort. To observe response to fairness, experimenters recorded brain activity while the subjects rated how rewarding each payment was. Findings were unsurprising for the un-bonused subjects: reward-related brain activity was higher when they received a payment.

But here’s the twist: in the bonused subjects, reward-related brain activity was highest not when they personally received a payment, but when the other participant did. In other words, both subjects seemed to be rewarded when pay was equal. Fairness mattered.

What does all this mean? That unfair employee incentives could be discouraging, instead of motivating. Or even the perception of unfair employee incentives. Fortunately, it’s simple to make sure fairness works in your favor. Just keep the following items in mind as you plan and implement your employee incentives:

1. Employees are sensitive to what’s fair. So reward equal effort equally.
2. More highly paid managers might be more motivated by rewarding staff than receiving rewards themselves.
3. Peer-to-peer recognition is doubly rewarding, because it gives employees the power to right perceived imbalances.

Yes, commonly accepted beliefs about incentives might overlook the complexity of the human brain. No, it doesn’t have to be complicated to address the problem. But doing so can have a big impact on results. Will you be re-evaluating with this in mind soon?

This article is the fourth in our Motivation in Mind series, an in-depth look into the psychology and neuroscience behind employee motivation. It seeks answers to questions about human motivation and how that motivation is shaped by the way people perceive, feel, think, act, and learn. More than a digest, news feed, or “how to” series, Motivation in Mind challenges assumptions about employee goals, conduct, and behavior to arrive at a more sophisticated understanding of corporate/employee relationships.

The post Employee Incentives: Be Fair or Risk Demotivation appeared first on InteliSpend Prepaid Solutions.

In response, companies are trying everything to make their wellness programs work. One survey from the National Business Group on Health found that 86% of employers are planning to use financial incentives in their wellness programs in 2013. But the surprising finding here is the number of employers turning to penalties, such as higher premiums, to urge screenings and change health habits. This same group found that the percentage of employers planning to impose penalties is likely to double to 36% in 2014.

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“Incentives must be genuine, meaningful, and important.”

Statements like this are extremely common in the employee incentives industry. In fact, they’ve become like proverbs: often repeated, readily agreed to, but sometimes lacking in the details.

This is likely due to an unspoken assumption that personal gifts are meaningful, while other incentives are less so.  And so much of the industry focuses on the rewards themselves: what the reward is, its dollar value, etc.

These are important considerations, no doubt. But at InteliSpend, we also recognize that for rewards to be meaningful, you need to pay close attention to the reward and the context.

Why context? We know from cognitive psychology that people are always interpreting the world around them. We attach meaning to things as we perceive them. Though perhaps obvious, these facts tend to make us think of the mind as being organized like a computer: our senses provide “input” to our brains, which then process the incoming information, and in turn produce an “output,” or behavior.

The real, full story from cognitive psychology shows us that the mind is a bit more complicated than that. Though information comes in from the senses to be processed, it flows in the other direction as well. Thus, our perceptions are influenced by what we think, how we feel, and what we remember. In other words, context.

You probably read the words “The Cat.” Good! That’s how 99% of the reading population would read those words.

But now, focus on just the “H” and the “A” above. Notice anything? You probably have, namely, that they are actually the very same shape.

Whether or when you noticed this does not matter. What’s intriguing here is that everyone can read these words clearly and easily, without delay. This is because we don’t just see the shape of the letters as they are in themselves. We actually see them as different shapes depending on which word the letter is in. Surprisingly, our brains figure out what the word is first and then this influences how we see each letter.

The effect is pretty pervasive: almost all perception works like this. And so, if meaning is a matter of perception, and perception is heavily influenced by context, meaning is, in part, a matter of context.

How does this apply to incentives and rewards? Whether or not your employees find an incentive meaningful will depend, in part, on the context in which they are earned and given. For example:

1. Rewards for specific behaviors will work better than rewards given for a vague “job well done.” If you reward for a specific behavior, your employee will see the reward as recognition for her contribution. If you reward just for a job well done, without mentioning specific behaviors, you risk the employee seeing the reward as a mere afterthought. What the reward means depends on how the employee sees the purpose and goal of the reward.
2. If incentives are given to individuals and teams that earn them, employees will associate them with high performance. They will see those rewards as something attainable, though with effort. In other words, your rewards become trophies.  If instead rewards are given to everyone regardless of performance, they will be seen as entitlements. (Even worse, if they are given to the employee with the most inside connections, they will be seen as “pet” gifts.) The social context of who gets the rewards, and why, influences their meaningfulness.
3. Rewards work better when they are memorable. The same reward can have a brief effect when simply handed out at the end of the day, but have a lasting effect on behavior when given publicly, with recognition from management and peers. So the context of how the reward is given can influence how long its effect lasts.

As much as we’re partial to reward cards at InteliSpend, we also recognize that our solutions do not work in a vacuum. How people perceive their rewards is rooted in certain truths about how our brains work. And our brains are always sensitive to context. So: are your rewards as meaningful as they could potentially be?

 

This article is the third in our Motivation in Mind series, an in-depth look into the psychology and neuroscience behind employee motivation. It seeks answers to questions about human motivation and how that motivation is shaped by the way people perceive, feel, think, act, and learn. More than a digest, news feed, or “how to” series, Motivation in Mind challenges assumptions about employee goals, conduct, and behavior to arrive at a more sophisticated understanding of corporate/employee relationships.

The post Making It Meaningful: Employee Incentives and the Power of Context appeared first on InteliSpend Prepaid Solutions.

As a whole, businesses have tried everything when it comes to safety incentives, and by now some “best practices” have emerged. These best practices are not complicated.  But without them, you could actually be putting employees at risk. The 8 most critical:

1. Successful safety incentives reward behaviors, not outcomes.  Rewarding an outcome, such as fewer reported injuries, can have a reverse effect: it might discourage reporting, instead of encouraging safe behaviors. So focus instead on what people must do to be safe.
2. Rewards should be issued immediately, or as soon as possible. This creates a more immediate emotional tie with the behavior, which in turn maximizes reinforcement.
3. Along with rewards, use recognition. Rewards become more meaningful when there is positive feedback. Recognition also makes rewards public, which shows other employees that the program works, and that the safety incentives themselves are attainable.
4. Get management involved. Not only should management get behind the campaign, it should actively be promoting and encouraging participation. When employees see their supervisors are serious about a new program, they are more likely to participate.
5. Repetition, repetition, repetition: Reporting and recognition might not be habit for your employees at first. Consistently remind them to report behaviors. And in return, you should consistently reward your employees for safe behaviors as well.
6. Don’t forget the other stuff, either. Safety incentives are a great management tool for encouraging safe behaviors. But they can’t replace training sessions and safety seminars. These are needed to give your employees the tools they need to succeed.
7. Don’t make it too complicated. “Thank goodness we have such a complex and nuanced safety initiative in place at this company,” said no one. Ever.
8. Don’t use cash rewards as safety incentives. Money gets put into a bank account or wallet, where it’s indistinguishable from any other income (and thus quickly forgotten). Think instead of something that has “trophy value”, that is, something that feels like a prize or a privilege.

The revamped safety program at Producers Assistance Corporation (PAC) is a good example of these 8 critical elements at work. This company provides contract personnel to the oil and gas industry, an area where employee safety is critical. To breathe new life into their safety program, PAC used reloadable reward cards to reinforce safe behaviors. These behaviors were things like attending a safety seminar, or addressing a possible safety issue. The overall format was that of a game were employees could earn, collect, and redeem points.

Management got on board early to promote the “game,” and successes were formally recognized by management as well. All in all, the program was simple yet exciting. It was also very successful: participation increased dramatically, and there was a significant decline in the incident rate.

So PAC’s program is a first-rate example of using these 8 critical elements (for more details, you can read the extended case study here). And they’ve had tons of success.  So the question for your organization: are you hitting all 8 critical elements in your company’s safety program? If you are, we’d love to hear your success story.  If not, consider incorporating them.  When it comes to safety, your employees are worth it.

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What makes the pyramid a hierarchy is that the needs must be met in order. A person cannot successfully meet the needs at one level until the needs at all the levels below it have been successfully met. Going up the hierarchy is like completing a series of challenges in a game before going on to the next level.

Maslow’s hierarchy has been an influential theory in HR, particularly when crafting employee incentives. This isn’t too surprising: the theory is simple, understandable, and makes some sense of human motivation. The important question is: are businesses actually using it correctly?

Maybe not. Hidden assumptions come along for the ride whenever businesses trot out Maslow’s hierarchy. A good example of the kind of assumptions I want to explore can be found in this appealing Forbes article. Without wasting words, we can see at least one of those assumptions in their main graphic:

So what assumptions are taken for granted here? Here’s one to consider. It’s true that, for employees, basic needs come first, then safety needs, then love/belonging needs, and so on up the hierarchy. The assumption, though, is that management should focus on the “lower” needs first, then move on to higher ones, using specific tools at each step. But why should this be true?

Sure, people aren’t going to focus on esteem and self-actualization if other basic needs are not met. But personal needs are not the same as company policies. In terms of company policy, then, focus on the top first. If your company provides challenge, opportunity, and the potential to grow and learn, your employee incentives and recognition programs will have a much greater effect.

Plus, effective incentives and recognition can be used to shape employee behaviors, which can help meet needs all the way down the hierarchy. For example, team bonding can be enhanced through a peer-to-peer recognition program. Physical safety can be enhanced when there is a good workplace safety program that rewards safe practices. Economic safety is secured when a sales team is motivated to hit its sales numbers.

Every time we unearth an assumption, we create an opportunity to revisit and improve our existing programs. Companies need to focus first on employee self-actualization and esteem, drawing on as many resources as possible to meet these needs in its workforce. And those resources should revolve around recognition and reward, not just compensation, even if one is focusing further down the hierarchy.

This article is the second in our Motivation in Mind series, an in-depth look into the psychology and neuroscience behind employee motivation. It seeks answers to questions about human motivation and how that motivation is shaped by the way people perceive, feel, think, act, and learn. More than a digest, news feed, or “how to” series, Motivation in Mind challenges assumptions about employee goals, conduct, and behavior to arrive at a more sophisticated understanding of corporate/employee relationships.

The post Using Maslow’s Hierarchy for
Employee Incentives:
Chances Are, You’re Doing It Wrong appeared first on InteliSpend Prepaid Solutions.