Employee engagement levels all over the world are at an all time low. According to this study by Gallup, titled, State of the Global Workplace , which looked at 142 countries and 180 million employees, only 13% of employees are engaged. Or, if looked at another way, this means that a massive 63% of employees are disengaged and a worrying 24% of employees are actively disengaged.
But, what does all this mean in terms of real, day-to-day behaviour?
Well, disengaged employees lack motivation and won’t be working as hard and won’t go the extra mile, meaning they will be less productive, while the actively disengaged are unhappy and will spread negativity to others.
Motivational crisis in the workplace
With 87% of employees feeling this way, it is fair to say that the modern work-place is broken and is experiencing a motivational crisis. This means it is all hands on deck in HR, and every area of HR needs to pull together to deliver strategies to drive up employee engagement levels from the critically low levels that they currently sit at.
- One area of HR that has not traditionally had such a strategic input into engagement and motivation is reward.
Why is this? Well, there has often been a bit of a turf war between HR and Finance when it comes to reward management. There is a battle for control. And, in organizations where finance leads the reward agenda, there can be more emphasis on numbers and less emphasis on motivational theory.
This is a limited approached to reward management as employees are motivated by not one, but two types of reward and these are
- Extrinsic (not part of the essential nature) and
- Intrinsic (belonging naturally; essential),
and financial measures only address the extrinsic need.
This means that with finance led reward agendas the intrinsic reward measures are more likely to be ignored and the business will be failing to deploy a total reward agenda.
It’s time for HR to lead and escalate the reward agenda
This is why the time is right for HR to step up and begin to lead and escalate the reward agenda and ensure a more holistic, total reward approach is adopted. This must addresses both extrinsic and intrinsic motivators. It is a perfect opportunity for reward professionals to take more direct responsibility for employee engagement.
Extrinsic and Intrinsic Reward Motivators
As we have hinted at earlier in the article a key way for reward specialists to boost employee engagement is to incorporate extrinsic and intrinsic rewards. As reward specialists, most of you will be very familiar with extrinsic rewards, like:
- Pay rises,
- Bonuses and
These of course do work and form a key part of a reward focused engagement strategy. But, modern day knowledge workers have been shown to also be motivated by four intrinsic rewards which they get simply from doing their job. These have the following four feelings associated with their jobs:
- Sense of meaningfulness
- Sense of choice
- Sense of competence
- Sense of progress
Intrinsic Rewards Overlooked
What you are probably wondering is which is most important to overall engagement? Extrinsic or Intrinsic? This research taken from an, ‘Ivy League Business Journal’, white paper, titled, “The Four Intrinsic Rewards That Drive Employee Engagement ,” shows that:
Over the last few years intrinsic rewards have risen in importance as key motivators, and extrinsic rewards have declined in importance.
In truth, both are still important but there is a continuing preoccupation with financial/extrinsic rewards at the expense of these psychological rewards among managers. This shows that the reward profession has a larger role to play in employee engagement, should it choose to accept it, and that is to educate managers and develop reward processes that deliver intrinsic as well as extrinsic motivators.
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Developing a strategic reward agenda
Of course, in order for reward managers to progress to a total reward agenda they will need to influence and engage key stakeholders both from within and outside the HR team. It represents an expansion of the reward role into job design, which can touch on many other areas of HR such as employee relations, organisational design and clearly it will also impact line managers.
This is why this total reward agenda may be best deployed as a strategic change initiative.
This will require the reward agenda leader to develop a process for devising, monitoring and tracking intrinsic, as well as extrinsic reward motivators.
Use BSC Designer to build clarity and focus around your strategic reward agenda
This is best done through the creation of a strategy map and KPIs which can be done very simply using a tool like BSC Designer. These strategy documents will form the basis of your discussions and communications with key stakeholders in the business. It will build clarity, purpose and a sense of commitment around your innovative reward agenda allowing you to initiate, drive and sustain it across the business.
Use BSC Strategy map to clarify strategy and alignment with corporate goals
For your reward agenda to be persuasive you’ll need to immediately demonstrate its relevance to managers and key stakeholders, using strategy maps from BSC Designer like is shown below. As you can see from the strategy map below, by moving towards total reward, (with intrinsic and extrinsic rewards), you will drive employee engagement/effort and boost productivity and output which will immediately show the stakeholders that your initiative is important to the overall strategy of the business.
Use BSC Designer KPIS to monitor and encourage change
As part of the reward agenda, the reward strategists will need to devise interventions to ensure that there is a focus on developing the intrinsic and extrinsic motivators. But, you’ll need to develop some KPIs so you can monitor the progress of your reward agenda and see how it is impacting corporate results. The relevant KPI here would be employee engagement and this is made up of 7 indicators linking to the employee’s intrinsic and extrinsic motivational levels. This is all represented in the KPI tree from BSC Designer shown below.
You can of course use the BSC digital dashboard as shown below to track and monitor your intrinsic/extrinsic reward motivation levels and to communicate this to key stakeholders to show progress and areas where there may be a need for more effort.
As you can see the modern reward professional has a very significant role to play in boosting employee engagement in the business. And this can be achieved by developing and deploying a modern strategic reward agenda which takes into account the contemporary shift in receptiveness towards intrinsic motivators and away from extrinsic motivators.
- ^ Gallup Survey; State Of the Global Workplace?, Steve Crabtree, 2013, Gallp World, http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx
- ^ The 4 Intrinsic Rewards That Drive Employee Engagement, Kenneth Thomas, 2009, Ivey Business Journal, http://iveybusinessjournal.com/publication/the-four-intrinsic-rewards-that-drive-employee-engagement/