Non-monetary incentives that outperform cash

Today: the non-monetary incentives that outperform cash.

Let’s address the elephant in the room. 

Whenever I ask my audience about incentives for staff, I get a million people shouting, “MONEY!”

I agree!

That’s why I’ve written about employee bonuses, profit sharing plans, compensation structures, and more.

But — hot take — I think there’s more to motivating your team than just a good salary.

Let’s take a look.

In 2009, McKinsey surveyed motivation at work. They found three non-cash motivators were “no less or even more effective” than cash bonuses, increased base pay, and stock options.

So, let’s start with their top three:

McKinsey’s #1: “Praise and commendation from immediate manage.r”

In other words, talk up your direct reports. And encourage your managers to do the same.

There are two important avenues for this:

Public recognition boosts self-esteem and encourages your team to strive for similar recognition. 

Pro tip: be specific in your praise. “Ty, thank you for kicking ass at selling conference tickets. This event couldn’t have happened with you.”

McKinsey’s #2: “Attention from leaders”

This could be like seeking top performers to solicit their opinions or participation. 

You might also book a quarterly one-on-one with them for a pulse check, career conversation, or feedback session.

McKinsey’s #3: “Opportunities to lead projects or task forces.”

This one’s pretty self-explanatory. When people feel like the company values their input, they’ll go the extra mile to ensure that input is top-notch.

Aside from McKinsey’s study, there are some other stupid simple but highly effective techniques I recommend.

Saying “thank you”

Hopefully you’re saying, “Duh, Girdley, I always thank my staff.” 

But not everybody does — and they’re missing out.

Not only does a culture of praise improve your whole workplace, but there’s a hidden benefit: your constructive criticism, when you need to give it, is much more impactful.

Team outings / offsites

This can be a great way to recognize your team’s efforts. And no matter how much you roll your eyes at “team building activities”... 

I’ve written a playbook on running effective offsites (sources for those stats are in there!), so that’s a good place to start.

Recognize and appreciate your employees’ families

You know your employees’ names. Do you know their partners’ names? Can you name their kids? Their pets?

This is what separates 1% leaders from the rest. 

If someone works a lot of overtime to wrap up a project, a gift and thoughtful note to their partner—for putting up with the hours—will have 10 times the impact of a gift to your employee.

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That’s what I’ve got!

What have you seen work?