Today's guest blogger is my partner, Susan Laine
You've cut staff, you've reduced salaries by 5%, 10% or more and now you have a leaner, meaner machine. You are breathing a little easier because you have cut your payroll expenses. In fact, an informal poll of HR directors suggests that many companies have cut their payroll costs by 15% or more. But have you considered that there are better and cheaper ways to motivate employees?
The results of a recent McKinsey survey on just this subject are stunning. Those surveyed about non-cash motivators, listed 3 non-financial incentives as equally or greater in efficacy than financial incentives:
- Praise and commendation from immediate manager
- Attention from leaders
- Opportunities to lead project or task forces
During my investment banking days, I knew the above was true, at least for me. I used to tell the Gary Davis, the President of AIG Trading, but he didn't get it, or just didn't think it was important. When I would close an especially important and profitable transaction, Gary always wanted to talk about how I could have done it better. There was always something to learn from this post mortem, but it would have been nice if it were preceded by some praise for a job well done…Positive reinforcement before the critique would have gone a long way. After that transaction, the once venerated Hank Greenberg, then chairman of AIG, sent Gary a note praising my work. Gary passed on the note without much comment. But the note from Hank Greenberg praising my work--that was a huge morale boost. And when Gary gave me the opportunity to run my area, that was also a boost. But if he had done a better job praising the work I was doing, I might have been happier and stayed with the firm longer .
Don't let this happen to your talent. Always look for ways to motivate your people—words and actions can be as valuable cash.
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