One word that should change how you reward your staff forever

And that word is: Meaning.

According to recent research published in the Ivy Business Journal, tangible rewards such as pay raises, bonuses and benefits are not as effective for day-to-day motivation as the psychological rewards employees get from doing work that has meaning. It’s crucial information for resource-strapped not-for-profits aiming to keep staff happy, motivated and rewarded for their work.

The study by Emeritus Professor Kenneth W. Thomas, entitled “The Four Intrinsic Rewards That Drive Employee Engagement” lists these ‘intrinsic’ rewards as:

1. Committing to a meaningful purpose
2. Choosing the best way of fulfilling that purpose
3. Making sure one is performing work activities competently, and
4. Ensuring one is making progress to achieving the purpose.

Thomas draws upon recent research to explain the popularity of psychological rewards and how they can be used to build a high-engagement culture.

This is great news for not-for-profits, which often struggle to compete with government or corporate-level salaries, but where work is more often meaningful and can make a more immediate difference to the community or the environment.

The four steps to an intrinsically rewarding career

More and more employees are now asked to self-manage their workday.

Indeed, Professor Thomas’s study that contemporary workers often use “… their intelligence and experience to direct their work activities to accomplish important organizational purposes. This is how today’s employees add value — innovating, problem solving and improvising to meet the conditions they encounter to meet customers’ needs.”

When employees self-manage their day-to-day working life, Thomas found they often use these four steps to evaluate the effectiveness of their efforts and the overall contribution they make to an organisation.

Positive emotional changes often accompany the successful achievement of each of these four steps, and mean employees remain actively self-managing and engaged in their work. Thomas goes on to describe each step as follows:

• Meaningfulness: There is meaning or importance in the purpose you are trying to fulfil.

Employees feel they have an opportunity to accomplish something of real value — something that matters in the larger scheme of things. They feel they’re are on a path that is worth their time and energy, giving them a strong sense of purpose or direction.

• Choice: You feel free to choose how to accomplish your work — to use your best judgment to select those work activities that make the most sense to you and to perform them in ways that seem appropriate.
  

Employees feel ownership of their work, believe in the approach they take, and feel responsible for making it work.

• Competence: You feel you are handling your work activities well—that your performance of these activities meets or exceeds your personal standards, and that you are doing good, high quality work.

Employees feel a sense of satisfaction, pride, or even artistry in how well they handle these activities.

• Progress: You feel that your efforts are really accomplishing something.

Employees feel their work is on track and moving in the right direction. They see convincing signs that things are working out, giving them confidence in the choices they’ve made and confidence in the future.

Thomas also noted that intrinsic or psychological rewards are often strong predictors of high staff retention. He says:

“Note that this is the “right” kind of retention—keeping the people who are energized and self-managing rather than those who can’t afford to leave.

We find that employees with high levels of intrinsic rewards also become informal recruiters and marketers for their organization. They recommend the organization to friends as a place to work and recommend its products and services to potential customers.”

While financial rewards will always be valued, it seems they are no longer the key factor in motivating more talented staff. Intrinsic rewards energise your best employees, resulting in, less burn out, higher job satisfaction, fewer stress symptoms, and higher performance.

How to create an intrinsically meaningful workplace

The best way to introduce intrinsic rewards into your organisation is to engage staff to identify meaningful work-related problems, recommend solutions that make sense, apply their diverse competencies, and experience a rapid sense of progress.  Some possibilities include:

Meaningfulness:

• Create a non-cynical climate where staff have the freedom to care deeply;
• Clearly identify organisational passions to offer insight into what employees care most about;
• Give an exciting vision of what can be accomplished;
• Connect work with that vision through relevant task purposes;
• Make employees responsible for a service.

Choice:

• Delegate authority so employees have the right to make decisions;
• Trust in an individual’s ability to self-manage;
• Make employees feel they won’t be punished for honest mistakes;
• Offer a clear purpose about what your organisation is trying to accomplish.

Competence:

• Foster continued development;
• Offer positive feedback;
• Recognise skills and success appropriately;
• Create challenges that fit individual abilities.

Progress:

• A collaborative climate—ask co-workers to help each other succeed;
• Milestones—mark stages of accomplishment;
• Celebrations—create special occasions to share enjoyment of milestones;
• Measurement of improvement—reward staff if their performance gets better.

Putting responsibility for identifying intrinsic rewards and engagement in the hands of your staff often produces its own sense of excitement and can signal a positive shift in your organisation’s culture.