What do rewards mean to your employees?

motivation brainstormThe motivation of your workforce is clearly an important factor when it comes to the overall performance of your organisation. Almost every organisation wants it’s employees to work harder, deliver more and be more flexible. Whilst reward programmes can deliver this, the link between reward and motivation is complex.


The most important asset

We all know that people are the most important asset of an organisation, and one of the biggest benefits of a reward scheme is that it helps you recruit and retain employees. But more importantly, it will help you recruit and retain enough employees with the right skill set – it’s all very well having the numbers but for your organisation to deliver on it’s goals it needs to have sufficient numbers of employees who have the skills to do the job.


Not having the right reward strategy in place, can cause a number of issues for organisations. It can become increasingly difficult to recruit new staff and tempt them away from your competitors, and existing staff may decide to leave if they feel that they can get a better remuneration package elsewhere – especially now the improving economy is giving employees more options to change jobs.

High staff turnover increases HR costs both in terms of recruiting and training new employees, and then there’s the lost opportunity cost due to the loss of knowledge and contacts, and a reduction in productivity as one staff member leaves and another is trained up. For knowledge-based businesses, such as software organisations, keeping their key talent is crucial.


The science bit

Perhaps the most well known theory of motivation is Maslow’s Hierarchy of Needs.

Maslow's Hierarchy of NeedsMaslow’s theory states that people’s wants and needs follow a hierarchy. At the bottom of the hierarchy are the physiological levels, such as the need to survive (e.g. food, water and shelter). Further up the hierarchy are different needs; Maslow states that humans need safety, followed by love, then esteem, and finally self-actualisation, or self-fulfilment. As we satisfy these needs we move up through the pyramid, focusing our efforts on achieving and satisfying the needs in the next level up.

Applying Maslow’s hierarchy into the workplace would suggest that low-paid members of staff are motivated by money, so that they can satisfy their physiological needs. As staff members become more highly paid, their salary becomes less important to them, and other motivating factors such as career development become more important.


Herzberg Hygiene FactorsWe know that money isn’t the only motivating factor, just look at people who work in charity organisations: often they could earn more by working in a commercial organisation. Rather than being extrinsically motivated (as suggested by Maslow’s hierarchy) these employees and many others are intrinsically motivated, that is to say they are motivated by the satisfaction of giving something back, contributing to the organisation as a whole or just doing a good job.

Herzberg’s theory of motivation is based around ‘hygiene’ needs and real motivators. Herzberg states that people will strive to achieve ‘hygiene’ needs (e.g. employee-manager relationship, working conditions, salary, company care, security) because they are unhappy without them, but once these needs are satisfied the effect soon wears off. Employees are only truly motivated, when they are able to work towards achieving those factors Herzberg identified as real motivators, such as achievement, development, recognition and the work itself.



Money will always be an important factor, but for the vast majority of people it’s not the defining factor of motivation. To have a really successful reward scheme, you need to find out what really motivates your employees, you need to source the meaning behind the reward for each individual employee.


John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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