In the current credit crunch, companies have to come up with increasingly creative ideas to retain and enthuse their staff. Melanie Fotiades explores how organisations can motivate their staff to deliver exceptional service through non-financial rewards

Being part of a Formula One pit crew is one of the most exhilarating jobs in the world. They are an integral part of the action and critical to the ultimate performance of the race. Yet their job is also one of the most hazardous. Despite the potential risks associated with the job, such as racing cars approaching them in excess of 50km/h or cars suddenly going up in flames right in front of their very eyes, these highly skilled individuals get no danger money. And it is practically impossible for them to obtain life insurance. Yet few pit crew members would change their job in the pit stop for anything else. How many companies can claim that kind of passion, motivation and loyalty from their staff?

Although you don’t want people to unnecessarily risk their lives for your company, wouldn’t it be a nice change to be able to win staff’s loyalty and commitment without having to offer yet more money? Let’s face it, in today’s credit crunch, companies need to come up with increasingly creative ideas to not only retain, but also to inspire loyalty and motivate their staff.  Recent trends in the UK show that organisations are increasingly focusing efforts on building general buy-in to the company and its values, rather than developing competitive reward packages. According to the latest Grant Thornton Recruitment and Retention survey1, 65% of UK businesses said that ensuring that all employees understand the company’s direction and values was a key retention strategy, compared with 47% who are looking at improving reward structures.

Money, undoubtedly, is one obvious way to retain and motivate staff, but when resources are limited, businesses have to look for new ways to inspire loyalty. One answer lies in taking a fresh look at really understanding employees’ needs, and offering other non-financial benefits that lock into how staff are actually motivated. Organisations can do this is through a total reward framework, which builds upon four basic areas of what is seen to be important to employees and is part of an overall motivational mechanism observed in well-performing organisations2. See diagram opposite.

As outlined in the diagram below, there are significant non-financial levers that organisations can implement or develop, without diminishing the relationship with the employee. Obviously, each organisation is going to attract a wide variety of staff with differing needs.  With this approach a number of interventions are available, so it’s certainly not a case of implementing a ‘one size fits all’ solution. A recent survey carried out by the CIPD3 revealed two areas that organizations could focus their attention to successfully inspire loyalty – effective management, and development.

The research revealed that the behaviour of front line managers has a direct impact on employees’ level of job satisfaction and performance, to the extent that it could become the main factor for staff leaving.  Limited opportunities to train or develop were also major reasons cited for staff leaving. By taking these factors into account, organisations can take some practical steps to retain staff. As stated, this has to start by actively listening to staff and understanding their needs.

Diagram 1: Total Reward

ER Consultants recently helped one professional services firm by successfully reviewing the organisation’s reward strategy. Through staff focus groups, we found that professional and peer recognition was just as critical to staff as pay. Being given the opportunity to carry out research and having the opportunity to publish articles in their field, meant more to them than moderate financial incentives. The new reward strategy has been extended to reflect such needs.

As a result, the business has considerably improved its retention rate. There are several practical steps firms can take both at an organisational and management level that can help win staff’s loyalty and commitment.

Winning loyalty at the organisational level
Set a shared strategy and goals with your staff in real terms: This isn’t about creating esoteric statements.  To have everyone focused on delivering the required business outcomes, set some tangible goals that are shared amongst the workforce, which you can achieve together.

Renew your focus and agreed behaviours:  Establishing a renewed focus should not just be about setting hard targets, but also being clear about how you would like to achieve them. Clear behavioural principles and boundaries need to be set, so that the creativity and talent within your organisation still has room to flex, test and thrive.

Create a shared understanding of what ‘good’ looks like: Develop a means to recognise and assess high performance that is clear and consistent across the organisation. This will ensure that there is a means to objectively identify a pool of high performing staff.  Such capability in an uncertain environment would be a powerful asset. These standards should also feed into recruitment as well as your staff development strategy.

Recognise the right behaviours and let staff choose how to be rewarded: To ensure employees remain focused on shared goals, organisations need to reward the right behaviours. One approach could be to provide a choice of relevant flexible benefits from which employees can choose in order to enhance their remuneration package or alternatively provide a lump sum payment in order to purchase discounted goods and/or services. Whichever approach is adopted, it is vital that the link between behaviour and reward is reinforced; otherwise the impact is quickly forgotten.

Winning loyalty through managers
Involve managers: In the quest for improving retention, it is vital to involve management as they have a direct influence on staff performance. Managers need to buy-in to any new approach and be involved early on in the development of enhanced retention mechanisms to ensure that it is appropriately framed and cascaded to every staff member in the organisation.

Create development opportunities: Look at varying opportunities for individuals to develop their skills and their career. If promotion or an increase in pay is not feasible right now, give them an opportunity to work in another area, exposing them to different aspects of the business and providing variety to their work.  Coaching and mentoring within the organisation is also another way to develop staff. As outlined in the article on page 14, short focused learning sessions can also be used to target specific business critical behaviours.

Be flexible with staff working hours and location: If your employees are committed to the shared goals, being flexible about where they work and the hours they work is another powerful way to build that sense of trust, shared ownership and, ultimately, loyalty.

Establish recognition schemes that balance team and individual achievements: This will reinforce the notion of shared goals. At this level, this could be awards such as certificates or vouchers, which link the individual or team to the specific behaviour their manager would like to reinforce. It could be a relatively small investment, but a critical signal that the right behaviours are recognised and again, in a way that employees would like to receive it. ER Consultants has helped several clients implement recognition schemes with significant success. See case study below.

Winning strategies?
By involving staff and being creative with your reward strategy, you can create an environment that truly differentiates your organisation from your competitors. And whilst these non-financial approaches may not necessarily achieve the passion and love for the job of a pit stop crew, they will inspire the kind of loyalty and commitment you find in workplaces where people genuinely feel happy and motivated.

Rewarding Effort
ER Consultants has helped several clients implement recognition schemes with great success. We recently helped a housing sector employer implement a new reward strategy to encourage staff to adopt the appropriate corporate values and behaviours and to improve business performance. The following mechanisms were introduced to complement an effective performance management process:

•    A recognition scheme (points or vouchers) to recognise improvements in core values and behaviours that could be awarded by line managers;
•    An interim bonus or award for reaching milestones linked to an end of year performance target;
•    Development of specific team based incentive schemes, for example, where ideas and improvements developed by teams are rewarded by their line managers.

The revised strategy now focuses on empowering managers to give immediate feedback to their staff on desired behaviours both as a team or individual through providing points that they can exchange for discounted goods or services. The model for ‘what good looks like’ and examples were established in consultation with ER Consultants, to ensure consistency across the organisation.

The results: Managers now have the ability to reinforce behaviours immediately, right down to the front line; staff receive constant feedback and have a choice on how they are rewarded.

For more information, contact: Melanie.Fotiades@erconsultants.co.uk


References
1 Grant Thornton Recruitment and Retention: The quest for the right talent, International Business Report 2008
2 The Enthusiastic Employee – How companies profit by giving workers what they want, Wharton School Publishing (David Sirota, Louis A. Mischkind, Michael Irwin Meltzer) 2005
3  CIPD Recruitment, Retention and Turnover survey, 2007