Performance bonuses 'do not improve employee motivation'

Friday 25 October 2013

Performance bonuses are not the best way to improve the motivation and commitment levels of employees, it has been claimed.

According to the Institute of Leadership & Management (ILM), the £36.9 billion spent on performance bonuses in the UK in 2012 had no impact on morale.

A study of 1,000 workers found that employees' enjoyment of their role was the single most effective motivator, followed by good relationships with colleagues, treatment by managers and level of autonomy.

Just 13 per cent of those interviewed said the prospect of receiving a bonus or other financial incentive motivated them to do more or try harder in their role.

Charles Elvin, chief executive of the ILM, said understanding employees and what makes them tick is "vital" as business leaders try to build a happy and motivated workforce.

"In the past year, UK companies have collectively spent an astronomical amount on financial incentives for their staff," he stated.

"But this report is telling us there are far more effective, and cost-effective ways to motivate people. These include giving regular feedback, allowing people to have autonomy in a role, the opportunity to innovate and improved office environments."

Mr Elvin said having good managers is "paramount" in business, as they are key staff motivators who can make a real difference to their teams.

Managing your employees is made easier with the help of Microsoft solutions.

Posted by Sarah Parish