When Wall Plaques and Gift Certificates Don’t Work Anymore

From today’s Harvard Business Review blog on motivating employees: ‘Less can be more when it comes to incentives. Money is the most expensive way to motivate employees, but it’s still many leaders’ first choice. Our experience and numerous studies, however, show that big bonuses are less effective than smaller, unexpected gestures, because gifts create a relationship while bonuses are purely transactional. Consider how pleased you are when a friend brings a bottle of wine to your house for dinner and how different you’d feel if he offered to pay you for the meal. In the office, small gestures create a similar friendly feeling. When Gordon M. Bethune was leading a turnaround at Continental Airlines, for example, he sent an unexpected $65 check to every employee when Continental made it to the top five for on-time flights. John McFarlane of ANZ Bank sent a bottle of champagne to every employee one Christmas with a card thanking them for their work on the company’s change program. In both cases, employees ended up feeling far more connected to the company than the relatively small financial investment would otherwise have implied.’

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