Creating Motivation Beyond the Paycheck

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Introduction

In today's workplace, both management and employees highly value and actively pursue work fulfilment. However, this concept often presents a dual perspective, much like a coin with two sides. 

While management expects employees to engage at levels that ensure the company meets the planned and budgeted results, acting conservatively with costs in uncertain and dynamic market conditions to secure the company's long-term survival, employees look for a work environment that fosters motivation, fulfilment, and happiness. 

Therefore, when it comes to reward and motivation systems, both organizations and their employees broadly aim for work fulfilment. Generally, both management (representing the company) and employees agree that work fulfilment contributes to creating wealth and well-being for both parties. However, in practice, this often results in conflicting perspectives: management tends to be conservative about spending on reward and motivation systems, whereas employees usually have a strong preference for financial incentives.

This is why, often middle (or project) managers find themselves in a situation where they feel blocked: they know they need to increase the motivation of their people, but have their hands tied by the lack of financial means. In this case, middle management is confronted with the need to implement non-financial incentives, however, often they see their attempts failing.

This article doesn't aim to explore non-financial ways to motivate employees. Those are plentiful online, and I've also compiled twenty low-cost strategies tailored for engineering and professional services contexts [HERE]. 

Instead, it focuses on addressing the common mindset barriers that managers face when defining and implementing these strategies, which can often lead to implementation failures and outcomes contrary to what was intended.

Setting the Scene

As with all management frameworks, organizational models of reward and motivation are theoretical constructs designed to encapsulate the ideals of fostering motivation and rewards in a perfect workplace. While these models include principles similar to those of financial reward systems, non-financial alternatives face even greater challenges. 

These challenges arise from both the company's (read management’s) and the employees' perspectives and are deeply influenced by the mindset with which these non-financial motivation systems are defined, deployed, and utilised by managers and employees alike.

Still, the working world is far from ideal. Consider the following:

On the company side:

Varying Needs for Awareness and Sophistication: Not all companies require the same level of awareness, sophistication, and attention in applying these motivational ideas. Organizational cultures differ, and not every company sees the need for such measures, often accepting high turnover as a standard operating procedure.

Disconnection at the Top: In larger companies, the significant distance between layers of management can lead to senior leaders becoming emotionally disconnected from the working conditions of employees. This disconnection often results in a push for cost-effectiveness that can deteriorate working conditions, sometimes to the point of abuse.

Cost-Effectiveness Over Immediate Needs: Anchoring their decisions on cost-effectiveness, management may delay decisions on initiatives with uncertain outcomes.

Inaction due to Uncertainty: Uncertain of what action to take or lacking confidence in their abilities to communicate, persuade, or successfully implement these ideas, management may choose inaction. They prefer to manage a known turnover, despite its painful and energy-draining nature, under the belief that “it is normal for people to leave and come” in a company.

Underutilized Metrics: Despite living in the 21st century, not many companies internationally treat turnover and employee retention as performance indicators of organizational health. Even when they do, it is often under social and CSR pressures, without a genuine strategy at the middle management or lower levels to utilize these metrics effectively, particularly when budgets for rewards and motivation are shrunk or even cut.

On the Employees' Side: 

Expectations and Misalignments

Employee expectations can also pose challenges. There is a prevailing assumption that any modern workplace should offer a series of benefits, ideally financial ones, however, in the absence of these, some non-financial benefits should be present. Often, employees lack the broader perspective that every decision in a company is driven by the returns it can generate. Consequently, the absence of at least some non-financial benefits can be perceived not just as a missing right they are entitled to, but as a disregard for their work, contributions, and value.

Another issue is the frequent misalignment between the company's objectives and the personal goals of employees. Without clear communication about the social contract between the company (as articulated by management) and its employees, there is a gap in understanding. Employees may not recognize that management decisions, irrespective of how beneficial they are to the workforce, are made only if they align with the company’s short-, medium- and long-term goals. This misalignment can result in motivational incentives that do not resonate with the personal or career aspirations of some employees.

Moreover, employees today seek personalization. Many derive their self-esteem from how their work and contributions are perceived in the workplace. A lack of personalized reward and motivation measures can be interpreted by employees as an implicit signal of insufficient performance, negatively affecting their work fulfilment and self-esteem. Without self-awareness and ongoing personal development, this misinterpretation can lead to a narrative of victimhood, further demotivating them.

In our materialistic society, tangible rewards are highly valued. While I am not here to judge whether this is good or bad, it is clear that without a baseline of financial incentives, non-financial rewards may only be effective temporarily.

For the reasons discussed, when a company’s budget does not allocate specific financial incentives, middle management often finds itself constrained in motivating their teams and maintaining unity. Nevertheless, middle managers can still employ creativity to motivate their teams. The absence of financial incentives doesn’t automatically lead to demotivation, nor does it prevent middle managers from fostering an environment conducive to motivation.

However, to achieve this, middle managers must confront and overcome ...

...Several mindset challenges

1. Motivating Others Amidst Personal Discontent

As a middle (or project) manager, feeling demotivated or let down by upper management due to a lack of financial and/or non-financial incentives does not justify ceasing to motivate your team. You need to learn to motivate yourself. Only so you will be able to not let yourself be influenced by external persons or circumstances and act aligned with your true self.

True motivation stems from the inside. No external reward will sustain long term your motivation until you identify your reasons for being in your role: why you chose to be a manager in this company, in this market, in support of this product or that solution, and what makes it important for you to stay connected with this job, this brand, and this professional life choice.

Do not cease to find new answers to these questions. Your motivation is on as long as you generate new answers perfectly aligned with your long-term vision for your life. And be aware that you are allowed to shift the long-term vision for yourself to suit even better your life stage.

2. The Misconception That Only Financial Incentives Are Effective

As a middle manager, you might distrust non-financial rewards if you are personally frustrated by a lack of financial recognition or believe that only financial incentives are effective. This mindset can lead to resistance against internal initiatives to develop non-financial incentives. At both unconscious and possibly conscious levels, you might even sabotage these efforts. 

This belief is often entrenched in organizational cultures that prioritize financial results. In such environments, it becomes extremely challenging to implement non-financial incentive measures if - mimicking the organisational culture’s logic - everyone measures their worth solely through monetary gains.

3. Expecting Immediate Results from Non-Financial Incentives

Managers might expect non-financial motivation strategies to yield immediate improvements in morale and productivity. However, the effects of such strategies typically take time to become apparent. Employees need time to adjust and appreciate new forms of motivation, such as in-house training, idea sharing, mentoring, and opportunities for professional growth. These initiatives often push employees out of their comfort zones, requiring them to integrate new knowledge into their daily operations and decision-making processes. This adjustment involves a learning curve where individuals may initially feel uncomfortable before they gain confidence and pride in their new skills. For managers, this means investing additional effort in supervision, as well as providing emotional and technical support, which can be exhausting and may lead to self-doubt regarding the effectiveness of the chosen non-financial incentives.

4. Believing Non-Financial Incentives Are Cost-Free

The adage "there's no such thing as a free lunch" applies also in the realm of non-financial incentives. Although these initiatives may not require substantial financial outlay, they are certainly not without cost. As a middle manager, you should be transparent about these costs and secure an in-house sponsor who can support you when additional resources are needed. This support becomes critical when non-financial initiatives compete for resources with other commercial projects.

Additionally, managing your own manager's expectations about what is involved in defining and implementing non-financial measures is crucial. You may need to negotiate for initial or additional resources and be prepared with a structured, data-backed argument to present your case for non-financial motivational initiatives to the ultimate decision-makers.

Furthermore, educating C-level managers who will ultimately approve these decisions is essential. Senior managers who have never defined or implemented such measures or who might have formed themselves on other periods when employee motivation was assumed to be present, may have misconceptions about the costs involved. It's important to highlight the hidden costs - such as time, teamwork, and collaborative effort required at the management level to roll out these initiatives, the opportunity costs of diverting in-house capacity to support the logistics of defining and deploying non-financial incentives as well as the potential long-term benefit. 

As a sponsor, your manager needs to understand both the potential benefits aligned with organizational objectives and the associated costs to confidently approve your proposal for a non-financial incentive.

5. Assuming Non-Financial Programs Are Self-Sustaining

It's a common misconception that non-financial incentive programs can run autonomously without further intervention. This expectation is unrealistic and you need not only to know it but also to understand what it means in practical terms.

Non-financial initiatives require robust support from senior management to be seen as valuable by employees. Consistent and clear communication is essential to underscore the value being provided. In the absence of such communication, there is a real risk for employees to not accept nor recognize the value received.

Additionally, these programs demand frequent monitoring and ongoing support from the responsible middle (or project) manager. Employees are more likely to perceive these incentives as valuable when they are actively engaged and held accountable for their development resulting from these initiatives. They understand their effort to consume the non-financial benefits is seen, matters and is highly appreciated by the management.

Without genuine commitment from both senior and middle management and continuous communication about the benefits and effectiveness of these incentives, the intended recipients may begin to view these efforts not as perks, but as additional tasks. This can lead to increased demotivation rather than the intended positive impact. Continual engagement and reinforcement are crucial to ensure that non-financial incentives are not only appreciated but are effective and facilitate the company's long-term objectives.

6. Believing Non-Financial Incentives Can Replace Financial Ones

Managers might hope that non-financial incentives could completely substitute for financial rewards such as raises, bonuses, or other monetary benefits. While these non-financial incentives can greatly enhance job satisfaction and commitment, they typically cannot replace the motivational impact of financial compensation, especially in highly competitive industries. 

Non-financial incentives are most effective when introduced as new offerings or used in conjunction with financial rewards. Over time, if these non-financial rewards become routine, they may be perceived as mundane or even burdensome, diminishing their motivational effect.

7. Assuming One Size Fits All

It is a common mistake for middle managers to assume that a single non-financial motivator will work equally well for all team members. In reality, individuals differ significantly in their personal preferences, career goals, and life circumstances, meaning a motivator that is effective for one person may not engage another at all. This fact of life is important to understand because it means that irrespective of how good a non-financial incentive may be, there will still be dissatisfied people and their dissatisfaction is based on how they perceive and read the world. 

However, it is crucial for middle managers to deeply understand their team members, including their professional development aspirations and personal motivators. Failing to tailor approaches to individual needs can lead to emotional disconnects between the manager and team members, potentially causing team members to feel unsupported and alienated. Even though, that is a personal perception that can still be shifted through honest communication about expectations and possibilities between the manager and their team members. 

8. Misinterpreting Resistance to Your Non-Financial Incentive Proposals

As a middle manager, you may possess a deep understanding of what motivates your team members, leading you to believe that your proposed non-financial incentive is the only viable option. However, it's important to reconsider this stance and view the situation from a broader perspective.

Consider that your proposed solution might need to be applicable beyond just your department, or perhaps your manager has reshaped your proposal to better align with the company’s long-term strategies and objectives. It’s also possible that a rejection of your proposal does not signify an outright refusal but rather a delay or a request for modification—perhaps it’s not the right time, or the format needs adjustment. It’s crucial to clarify the feedback from your senior managers to understand their perspective and reasoning.

Moreover, there can be many factors that make it challenging for non-financial incentive ideas to gain support within the organization. Good ideas often falter if they lose their initial advocate. As a middle manager, it is your role to stay resilient and optimistic, continuing to champion and negotiate non-financial incentives within the organization. Understanding and navigating these dynamics are key to successfully implementing and maintaining motivational strategies that resonate with your team and align with organizational goals.

9. Waiting for Top-Down Initiatives for Non-Financial Incentives

It's a common misconception that the initiation of non-financial incentives should always come from upper management. If you, as a middle manager, believe you have a valuable idea, it's important to take initiative rather than waiting for directives from above.

Even if you are not the final decision-maker, you can start by developing your idea into a mini-business case. Present this case to your manager or another sponsor within your organization, supporting it with relevant company data and aligning it closely with organizational strategies and objectives. If you do not have that data, use your manager or other suitable peer managers to support you with relevant info.

From my experience, well-founded proposals that are appropriate for your company's culture, and tightly connected with the company’s strategic or tactical goals rarely receive an outright rejection. Instead, they often lead to constructive discussions and potentially successful implementations. Taking proactive steps to advocate for and implement non-financial incentives can demonstrate your leadership and commitment to the company's success.

Navigating Beyond These Misconceptions

Moving beyond these misconceptions involves middle managers being on the receiving end of non-financial incentives and experiencing firsthand their positive impacts on professional or personal growth. 

Understanding and realistically managing organisational expectations and personal mindset challenges can help middle and project managers more effectively implement and sustain non-financial motivational measures. Doing so can lead to improved outcomes for their teams and projects, fostering a more supportive and motivating environment.

In conclusion, I would like you to consider the following questions to deepen your understanding and effectiveness as a leader in utilizing non-financial incentives:

Team Motivation: What truly motivates your team? Are you in tune with the individual goals, values, and interests of each team member, and how can you align these with non-financial incentives?

Impact of Recognition: How well do you understand the impact of recognition on your team? Do you regularly and meaningfully recognize and appreciate your team's efforts?

Supporting Autonomy and Creativity: Are you fostering an environment that supports autonomy and creativity? Have you provided opportunities for your team to take ownership of their work and express their ideas freely?

Effectiveness of Feedback: How effective is the feedback you provide? Is your feedback constructive and aimed at fostering growth, and how frequently do you engage in feedback sessions with my team?

Communicating Value: Are you effectively communicating the value of non-financial incentives? Do you clearly convey why and how these incentives are beneficial, and are you transparent about what the team can expect from these incentives?

Challenges in Implementation: What are the current obstacles you perceive in proposing, defining, and implementing non-financial measures in your workplace?

In case you have ideas about non-financial incentives you would like to implement but do not know how to build your mini business case or to support your idea in front of your sponsors, or

Maybe you already received the green light for the implementation of non-financial incentives but see your implementation efforts are going nowhere.

For anyone who wants to incorporate such incentives into your reward and motivation process, I'm here to support your success. Book a complimentary call and let's transform your ideas into an actionable plan you can present to your sponsor for approval.

Until next time, keep thriving!

Alina Florea

Your Management Performance Coach 

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