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Managing Staff

Is Cash King? The Psychology of Incentives

If you are considering implementing an incentives scheme, consider approaching specialists that offer a variety of possible solutions. Their experience and understanding may prove to be vital!

David Sand

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In addressing the incentives space, it is perhaps prudent to examine the age-old question that arises time and time again: “why not just use cash?” Those in the business will answer that without hesitation and point out that non-cash awards are undoubtedly the way to go. But why is this?

Why do tangible awards work more effectively than simple, cold, hard figures in an ever deflated bank account? Intuitively, one may think that simpler is better, and that cash will always be king. But, as with many things that seem obvious, there is more to the incentives space than meets the eye.

Related: 5 Surefire Ways to Get Clients to Pay on Time

The Incentive Research Foundation (IRF) produces in-depth and insightful research, and we’ll be looking at some of their findings in this article. Specifically, the whitepaper examined is titled, “The Benefits of Tangible Non-Monetary Incentives” by Scott Jeffery, PhD and the idea is to represent some of the whitepaper’s highlights.

The research presents four psychological factors that tip the proverbial scales in favour of non-cash incentives. The first two (Evaluability, Separability) relate to how a participant perceives the value of an award. The second two (Justifiability, Social Reinforcement) contribute to the actual way an award brings value to an earner. Let’s jump right in…

Leaving an indelible mark

If I write “Relaxing Island Retreat”, you might visualise beautiful beaches, warm blue waters and stress-free leisure time. Along with these imaginings, you will also probably feel positive emotions and wish that you were there right now, sipping a long island ice tea.

In stark contrast, if I wrote “R20 000”, all the great images and positive vibes evoked by the island retreat would fade into the background and you may think about paying debts, bills, mortgages, and etc. This is pretty mundane stuff.

The psychological effect between the two is marked, and the first leaves a much deeper impression than the second. Simply, the psychological impact of a tangible reward is much greater than the impact of a cash remuneration.

Separating rewards from normal pay

The idea here is uncomplicated, and the suggestion is that people tend to view cash bonuses as being part of their remuneration package, while tangible rewards are seen as distinct from normal pay.

In other words, tangible awards are perceived to reflect the fact that the participant has gone above and beyond normal expectations, rather than simply working for extra pay.

Justifying it

This idea reflects the truth that people are conscientious about spending habits. One can easily imagine someone saying, “Sure those golf clubs are beautiful and exclusive, but I can’t justify the expense”.

If, however, the golf clubs are earned through a rewards programme, the participant can enjoy them without any pangs of guilt. The tangible award is earned through hard work, and is seen as an enduring and physical trophy. As Jeffrey’s points out, “earning the incentive eliminates the need to justify its purchase”.

Social reinforcement vs personal opinion

One of the most important rewards for a job well done is acknowledgement from one’s peers, supervisors, family, and friends. This social reinforcement comes from others knowing about the good performance.

Whereas the details of one’s financial standing are often a personal matter not open to public discussion, a tangible reward can be the topic of a conversation and doesn’t violate any social taboos.

The idea of trophy value is powerful here, and a physical object serves to remind both oneself and others of the achievement. Cash simply lacks trophy value.

 

The cash vs reward debate is a hot topic in companies looking to implement incentive solutions, and no end seems in sight. Research, however, strongly suggests that tangible rewards like travel, experience, merchandise and gift cards can have more of an effect on motivation than impersonal cash.

Related: How Staff Training May Help Increase Your Turnover

The reason for this doesn’t necessarily belong on the plane of the practical; rather, the distinction lies in the realm of human psychology, so it is human psychology that should be taken into account right from the outset.

Additionally, there are compromises that combine cash with physical rewards; one such alternative (like our Kudosh card programme) is a branded card that allows one to buy products at any POS that accepts MasterCards. These cards can also be used for online purchases.

If you are considering implementing an incentives scheme, consider approaching specialists that offer a variety of possible solutions. Their experience and understanding may prove to be vital!

David Sand – CEO and founder of UWIN IWIN (Pty) Ltd -1994, with offices in South Africa, Kenya, Egypt, Ghana, Nigeria, India and Brazil. 2013 Global President of Site Global, the professional association for leaders in the motivational events and incentive industry. Regarded as a pioneer in the field on online incentive point banking and online loyalty, recognition and reward fulfilment. David is also the founder of the Youth Employment Index a non-profit company that addresses youth employment issues in Africa.

Managing Staff

7 Simple Steps To Strategise For 2019’s Success

To make that happen you will need to start strategising soon. So let’s talk about how all of us can create effective team strategies for 2019.

Revel Africa

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With the buzz and hoopla in full swing this holiday season, as managers and business owners it’s good to remember that the new year is right around the corner. We all want next year to be better than this one, and you probably have a few improvements in mind that you want to see come to fruition.

To make that happen you will need to start strategising soon. So let’s talk about how all of us can create effective team strategies for 2019.

1. First, clarify your goals

To know what the new year should look like, start by understanding what this year was like. Pull reports now while data is fresh, and look at this year’s performance. Identify the changes you’d like to see in the upcoming year.

Then you can clearly see what you want your team to achieve in the new year:

  • What specific metrics need work?
  • Do you want to see an increase in overall revenues by a certain percentage?
  • How about improving productivity and cutting costs?

2. Time to plan

Once you have an idea of what needs changing you can work out the details of how you will achieve it.

Consider the SMART acronym when putting your plan together. Is your plan:

  • Specific (simple, sensible, significant).
  • Measurable (meaningful, motivating).
  • Achievable (agreed, attainable).
  • Relevant (reasonable, realistic and resourced, results-based).
  • Time bound (time-based, time limited, time/cost limited, timely, time-sensitive)

As leaders we need to lead with clarity and decisiveness, but we will do well to gain the input and ideas of those we lead.

Once you have your plan in place, you can bring in your team.

Related: Planning A Year End Function On A Budget? Five Fabulous Tips To Get The Most Bang For Your Buck

3. Book a break-away meeting

Plan your meeting after the holiday season has passed. The start of the year is a good time, as everything has calmed down, minds are fresh, and people are ready for vision. So, early in January, bring your key management team together and let them know you would like to discuss the goals for the upcoming year.

Plan a meeting away from the office so that the usual distractions are eliminated, and you can all focus on the key objectives. Sometimes we need help arranging these things, like finding a great venue, arranging food, including ice-breakers, creative starters and games to get the juices flowing, and so on. This is not your core skill set, so consider hiring an event planner and an MC to keep the day on track, so that you can focus on the main thing – getting the team focused and energised for success in 2019.

4. Setup the meeting agenda

Start the meeting by bringing everyone up to speed by reviewing last year’s stats. Show the results that you reviewed and allow them to see where the areas of success were, as well as the areas that need attention. If you haven’t already, recognise the team members who stood out in various important aspects of the business. This is tremendously motivating and encouraging.

Get a conversation going either in small teams, or around the table where ideas are brainstormed for how to solve the areas that need improvement. Find out from the team why they think the business struggled in these areas, and how they think improvements can be made.

Your agenda could cover these conversation starters:

  1. What are the three most important objectives for this year. Think “big picture” here, things that touch on profit and future achievement.
  2. Who is responsible for each of these?
  • What will you do?
  • How will you do it?
  • By when will you do it?
  1. Break the year up into monthly metrics and put quarterly goal-planning reviews on your calendar. This commits you to pause and measure every 90 days, while keeping a close eye on profits, clients, projects, revenue in 30-day intervals.
  2. Link up. Remember, lone wolves starve to death. Think about who can you partner with in 2019 to reach your goals – who are your advocates, allies, referral sources, and potential joint venture partners who can help you leapfrog over obstacles and who complement your own products and services. Get contact details and build your relationship with them so you can collaborate more closely – starting right now.

Remember to take breaks that are fun and creative in order to unhook from this intense deep dive into strategy. You don’t want to burn out your team right at the start of the year. Keep snacks, water, and activities going so that they have fuel to keep on but start the year motivated and positive.

5. Draw up the final plan

Once done, it is time to go through all of the input you have received to supplement your strategies, and draw up the final plan. When your final plan is ready, bring the remainder of your team together and lay out the plan for 2019. This can be done via a video recording, Skype, an email, a meeting, or one-on-one conversations, depending on the size and locations of your team. Be clear about what they need to bring to the table in 2019 and how it will be measured. Then ask for a commitment from each team member to work toward the improvement in the coming year.

6. Tracking and Measuring

Once the team is committed and bought into the 2019 strategy, you’ve only just begun. Set policies and procedures in place to track progress, provide updates, and hold people accountable to their commitments. Some managers might opt to check the metrics daily and send out weekly updates, while others may check weekly and send out monthly updates. Whatever you decide, consistency is key to ensure you stay on track to achieve your goals in 2019.

7. Invest in resources for success in 2019

As this year winds down, commit yourself to leading, motivating, and inspiring your team to work together towards your common goal. Plan how you can come alongside your managers to ensure their success by offering mentoring, support, training, and whatever resources they need to achieve these goals.Their success is ultimately your success.

Similarly it might be a good time to invest more into your own growth – consider a mentor for the year ahead who can help take you past your own limitations and rutted thinking. Read books on leadership and other’s business successes; plan three mini-holidays in the year to keep you sharp and focused. Remember you can only give to others what you yourself have.

This simple yet effective strategy can be applied to whatever type of business you are in, and can help you gain the buy-in of your vision by your team and make 2019 a year of achievable success.

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Managing Staff

The Value Of Employee Growth

When you’re running a fresh and shiny new business, how do you ensure your employees feel like they have a place to go?

Chris Ogden

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Investing into the future of an employee is a complex task at the best of times. Well-established organisations battle to manage employee expectations and growth trajectories so what options does a startup have when it is still finding its feet? While having an agile and energetic young company is often enough of a drawcard for talent, you still need to create pathways that are unique to your business and that allow for employees to grow, both personally and professionally.

Step 01: Embrace difference

Recognise that your business is made up of a variety of different roles and that each one offers different employee pathways. You need to find the pathways and roles that suit an employee’s personality and their idea of where they want to grow.

It’s in seeing these differences and embracing them that you are already providing your employees with a voice and showing them that they are heard.

Related: 5 Benefits Of Turning Your Employee Into An Intrapreneur

Step 02: Be inventive

Find a way of creating growth opportunities even with the few roles you have in your business. For example, you could create a methodology that has tiered levels within a specific role. Then a person has opportunity to expand their skills and responsibilities in that role. This would work for roles that are fixed, like an office admin, or for roles that are flexible.

Step 03: Finance and responsibility

Outline how a person can grow financially and show them the additional objectives and responsibilities their role offers. Some people aren’t just about the money, they want more to do and they don’t want to be bored.

Step 04: Key Performance Indicators (KPIs)

It is essential that you measure people so that you can create opportunity for them. Tell them their KPIs so that they have benchmarks and everyone has expectations. This allows you to let people know when they are or are not doing well.

They can assess their performance properly and there is no risk of people having differing expectations that impact on ability or role. You must openly and honestly review employees and yourself.

Related: 6 Ways To Build Your Business With Employee-Entrepreneurs

Step 05: Encourage mentorship

It’s really worth encouraging people to guide or mentor one another. Some people may stay in your business for years, some only for a few months, but you want to see them all grow. By creating an environment that inspires people to mentor and guide one another, you’re ensuring that every person in your business is given a chance to teach and to learn.

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Managing Staff

Peak Performance: How To Get The Best Out Of Your Business Team

Understand and more importantly apply the following to your business and you too can dramatically improve the experience of your employees and ironically, with that people over profit approach attain profits never seen before.

Dirk Coetsee

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“Sell your cleverness and purchase awe”

Rumi

Under the periphery of Leadership and humanitarian philosophies lies the reality of people not always being understood nor treated well in their workplaces. Albeit that lip service is often paid to a people over profit Leadership style few entrepreneurs or companies bring it to life to its fullest potential.

Those select few leaders whom have had the awesome experience of leading business teams that are inspired, constantly learn new skills and sharpen existing ones, are change adept, with behaviours aligned to the business vision, and solving problems within a ‘family environment’ of mutual trust and respect have indeed ‘sold their cleverness and have purchased awe’.

Understand and more importantly apply the following to your business and you too can dramatically improve the experience of your employees and ironically, with that people over profit approach attain profits never seen before.

Related: Peak Performance: Multiply Personal And Team Business Performance

If it is to be it is up to me

tony-robbins

The author totally agrees with Tony Robbins who states that “Business is 20% technical and 80% psychology”. The state of your business and the performance of your business team is so much dependent upon your state as an entrepreneur, business owner, or investor. Your psychological  state as a tapestry weaved together by your thinking, beliefs and behaviours influences all aspects of the business.

If you demand states of positivity, peak performance, massive and confident actions from your team you yourself better embody those states day in, day out.

Luminaries and leaders such as Jim Kwik (Brain and learning expert) , Tony Robbins (World leading Life coach and Billionaire entrepreneur) , Ed Mylet (Entrepreneur and passionate advocate for peak performance) take control of their lives, days, and states by consciously doing a variety of practises each morning to ensure that they are at optimal levels of performance and state as they approach a new day.

Conscious , focussed, and mindful efforts such as ‘NLP Peak state exercises’, Meditation, Prayer, reading, visualisations, breathing exercises,  and physical exercise can be very impactful with regards to your daily engagements as a leader or entrepreneur.

I love what Ed Mylet has to say about self-confidence and influence:

Self-confidence comes from keeping promises to yourself which equals self-trust’. We all lose self-confidence and self-trust when we keep on promising to ourselves that we will start exercising or stop smoking and we never do. Start keeping promises to yourself as a matter of honour.

‘Influencing is not making others believe but its’ about showing them that you truly believe in what you are saying’.

Inspire instead of motivate

Be future orientated in deed and speech as an Entrepreneur. Hold and treasure an inspiring future Vision in front of your team and ‘sweat and bleed’ alongside them to actualise that vision. ‘First seek to understand and then to be understood’, as the late Leadership expert Stephen Covey said, in relation to your communication style. Most of all love your team and foster a culture of self-improvement, growth and learning.

Tell inspiring and true stories in relation to the vision and team members’ behaviours that are in alignment with your companies’ vision. Motivation is fickle and tied to your will-power which is finite.

Sincerely hold on to an inspiring future vision and defining Purpose which can provide infinite inspiration.

Related: Business Leadership – Learn How To Embrace Change

Entrepreneurs and leaders create environments for team members to thrive in

The ultimate ‘hack’ in relation to performance for entrepreneurs and leaders is to create an environment for their co-team members within which they can thrive, creatively contribute, and feel as part of a family that is actualising an inspiring future vision.

When team members do not feel safe or trusted they spend a lot of time creating safety nets (even sometimes false ones) for themselves as opposed to actually doing their work. Lead by inspiring example and actually do what you say you will do all in alignment with the companies’ vision and values and your team members will trust and follow you.

Personalise their rewards and constantly demonstrate that you care about them as people and value them as highly important contributors to the attainment of the companies cause.

Go forth and lead your team to the peak of your collective performance!

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