Are Incentives A Good Employee Motivator? 15 Coaching Experts Weigh In

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Top business and career coaches from Forbes Coaches Council offer firsthand insights on leadership development & careers.

Motivation is often a hot topic in leadership, with everyone having their own ideas of what does and doesn’t work. When a motivating tactic works well, it can boost both short- and long-term productivity and morale. But when it doesn’t, it can backfire completely, leaving employees discouraged and underperforming—or worse, headed out the door.

One common motivation technique is the use of financial or material incentives. We asked 15 members of Forbes Coaches Council whether they believe incentives work, and why or why not. Their answers are below.

Members of Forbes Coaches Council offer their views on the efficacy of incentives for motivating employees.PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS.

1. Engaging Employees’ Passions Keeps Motivation High

Incentives often provide a short-term boost in employee motivation. In the long run, these same incentives may short circuit any value that individuals place on the reward or on the rewarded tasks. To keep motivation high, leaders must remove roadblocks to progress, provide constructive feedback and coaching, and create opportunities for employees to engage their intrinsic passions in the workplace. – Lillian GregoryThe Institute for Human and Leadership Excellence

2. Money Is An Untrustworthy Motivator

The research on workplace motivation consistently concludes that employees aren’t primarily motivated by financial incentives. Money matters, but usually less than being shown appreciation, the opportunity to do meaningful and challenging work, enjoying relationships with peers, and respect for management or opportunities for personal growth. – Christian MunteanVantage Consulting

3. Social-Emotional Rewards Are More Effective

Incentives that are emotionally and socially rewarding recognize the whole person. Appealing to emotions generates a long-term sense of reward. Private and public acknowledgements of character deepen commitment to the company. Verbal affirmations, bulletin board memos and social invitations to serve on a think tank or strategic planning team meaningfully communicate the person’s worth and viability. – Sharon A. KuhnExecutive EQ

4. Incentives Are Necessary, But Insufficient On Their Own

Incentives are now an expectation when working for a large business, so they’re insufficient to retain and motivate your top performers. If you want to boost motivation, focus on what actually makes people happy at work: positive relationships with co-workers, challenging work that provides a sense of meaning and purpose, and adequate autonomy to get the job done. – Scott SwedbergThe Job Sauce

5. Money Is Always A Motivator

We’d all like to think that people are motivated solely by recognition, but that just isn’t realistic. Money shouldn’t be the only tool used to motivate your team, but it absolutely is an effective one. Every level of an organization, from the owner to an entry-level employee, receives financial compensation for their efforts. Increase the financial reward, increase productivity—it’s that simple. – Elizabeth Pearson, Elizabeth Pearson Executive Coaching

6. Establishing An Emotional Connection Is Key

Incentives are a tempting way for managers to motivate employees. But a more leadership-based approach is to leverage relationships and inspire employees to do their best by communicating value and belief in what they are doing. Seeing leadership as relationships establishes a powerful emotional connection and keeps the focus on the value of the person and not solely on the work they produce. – Jonathan SilkBridge 3 LLC

7. Incentives Should Be Tied To Reaching Goals

Offering employees incentives is a great way to keep them motivated, especially when the incentive is offered when the company or employee hits a goal. People love recognition and to feel a part of something bigger than just themselves. So rewarding them for helping the company hit a goal is a great way to allow them to feel that and want to continue to do better as well. – Taylor ManningTaylor Manning Creative

8. Money Can Kill Motivation

Motivation is about achieving potential, being part of a team and and believing in purpose. Elite teams are motivated by the quest for success; money is simply a second-order result of that effort. In today’s knowledge-based workforce, culture, growth and meaning are more vital than dollars and cents. As a leader, create motivation, don’t try to buy it. – Chris StricklinAfterburner

9. Incentives Work Only If Culture Is Strong

Executives should only consider implementing incentives if the company already has a strong, cohesive culture. If incentives are implemented in an already toxic work environment, the situation may only get worse. Leaders should be thoughtful in their approach to implementing these ideas to get positive results. – Mika HunterFemale Defender

10. Inspiration, Purpose And Habits Are More Important

I can say with relative certainty that motivation exists as a tremendously weak “leadership” tool. When was the last day you showed up for work well-rested and well-nourished, and did so minus traffic? Me neither. You still showed up and did quality work. Rely on more powerful tools, like inspiration, a shared purpose and strong habits. – John HittlerEvoking Genius

11. Meeting Deeper Incentives Helps Higher Retention Rates

In a purpose-driven organization or team, the incentives go beyond a promotion or added value to one’s resume for the next job opportunity. If we want a higher retention rate, then we must go the extra mile and co-create meaning with our staff. Does the employee feel their dream, purpose and career goals are supported by their leader? Is there a sense of humanity versus a sense of commodity at work? – Cheryl LeongLeading with Consciousness

12. Rewarding Human Nature Is Essential

Most rational actors have a positive reaction to incentives. Choosing to address a natural need for recognition via any method of reward or incentive is inherently in line with what comes naturally. Granted that it is debatable what kind of reward or incentive should be selected, there is no doubt that since it is one of the natural desires, it has the greatest chance of success. – Kamyar ShahWorld Consulting Group

13. Motivation Is Driven By Empowered Ownership

Incentives are crucial to meeting employees’ basic needs; motivation is driven by something deeper. Empowered ownership is one of the most important drivers in today’s modern workforce. Our current workforce values their time above all and seeks opportunities to contribute to a fulfilling purpose. Empowered ownership is the way large companies motivate and innovate for the future. – Leanne WongTrue Talent Advisory

14. Perception Of Fairness Is Crucial

Incentives that seem to help certain corporate team members thrive at the expense of others—or the perceived expense—create unintended negative consequences. If the sales team is rewarded for landing deals, but the marketing group is not, you will have demotivated many in marketing who helped. Clear performance indicators and a perception of fairness across disciplines must be first and foremost. – John M. O’ConnorCareer Pro Inc.

15. Motivation Is A Personal Journey

Determining what incentives work for certain employees is a key aspect of leadership. Financial incentives work for some, while others want training or growth incentives. Some employees even want incentives that allow for more time with family. The key is giving leadership options to choose the best incentives to motivate individual employees and teams. Motivation is a personal journey. – Tony MickleBig Box Coaching