Niki is Insperity's director, service operations. She specializes in employee onboarding, human capital management and HR infrastructure.
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After the Bureau of Labor Statistics reported productivity rose sharply in 2020, businesses may be concerned that they'll soon see a decline. With the BLS reporting that “total factor productivity” decreased by 1.2% last year, it may be time to consider new initiatives to excite and motivate employees. One option is implementing performance-based incentives, including referral bonuses, performance-based bonuses and formalized awards and recognition.
Referral Bonuses
While referral bonuses are typically part of a company’s recruiting strategy, these programs can raise productivity for several reasons. First, when a successful and high-performing employee refers a friend or former colleague for an open position, that often signals the candidate's a good fit for the role's qualifications and has the abilities an organization needs. In many cases, employees only refer individuals whose competency they believe reflects well on their own judgment. As a result, these candidates are more likely to be high performers who will raise the organization’s productivity overall.
Second, if a referral candidate receives and accepts an offer, that can raise the morale of the colleague who referred them. The referrer usually has a close relationship with the candidate, which can ensure they work well together, and they'll also feel a sense of pride in contributing to recruitment and organizational growth. That can increase engagement, which leads to better productivity.
Performance-Based Pay
Adopting a performance-based pay strategy can help employees from stagnating and encourage initiative, considering employees who receive the same compensation no matter their performance may not push themselves as hard. In particular, once employees reach a point in seniority where their next promotion may feel far away, performance-based bonuses can increase motivation and incentivize higher performance.
Some businesses divvy up bonuses based on the performance of the company as a whole, determining amounts based on experience, job title or simply dividing funds equally across the workforce. One option to determine whether annual bonus amounts relies on performance-based data. Another approach might be setting salary levels for every role dependent on job grade, with employees with the highest job grade receiving the highest pay.
Awards And Recognition
Employees don't just want higher compensation; they want recognition from leadership for the work they accomplish. With that in mind, consider employing awards and recognition programs that reward and motivate your workforce. These could be distributed on a monthly, quarterly or annual basis based on productivity, contributions to culture or any number of factors you believe are critical to productivity.
In addition to recognition coming from the top down, invite employees to publicly praise their colleagues as well. This could be as simple as nominating each other for awards, like “Biggest Team Player,” or sending someone a company-funded gift card to honor their hard work and contributions. These programs will help create a culture that values achievement, which encourages employees to stay productive.
Leaders who feel concerned about employees’ productivity can navigate these challenges with ease by pursuing a strategy that incentivizes achievement. No matter the method, it's important to ensure any choice fits the organizational culture and is clearly documented. Communicating how incentives are awarded is as important as the initiative itself. That's how business can increase engagement and set employees up for success.
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