Solving the productivity puzzle has had businesses and the government...well, puzzled for quite some time now. But are financial incentives the key to boosting the UK's productivity.
A new study from Xactly, a cloud-based incentive solutions company, has found that a bit more money in the bank account is the way to better engage with employees and boost productivity. But many organisations aren't acting on it, failing to offer any financial incentives or reward schemes at all.
Despite over a quarter (27%) of UK employees stating a financial bonus is their main motivator, a large portion of employers do not run any kind of monetary incentivisation programme. Nearly half (45%) of respondents are paid hourly or on a fixed pay rate with no potential for a bonus, and a quarter (25%) stated their personal performance is in no way connected to financial incentives or affects their pay package. The scale of the missed motivational opportunity is made clear with respondents who had previously received a bonus, with over two-thirds (69%) stating that it motivates them to push towards their next professional goal within nine months.
Tom Castley, vice president EMEA at Xactly, said: “The UK is currently experiencing a huge productivity challenge - UK productivity currently falls behind the likes of the US, Italy, Germany and France. The government is taking steps to address this with the Productivity Plan announced this year, but UK plc must play its part too.
“These findings highlight the gap between what motivates employees and what businesses are doing to engage them. The best way to boost productivity is to boost employee engagement – financial incentives are key. Of course, this isn’t about throwing money at the problem – but smart, performance-based financial reward must be utilised to help the UK pull itself out of the productivity pit.”
In addition to highlighting the importance of financial motivation, the study revealed money is not the only factor in engaging employees. Despite a third (33%) of those questioned admitting they wouldn't work if they didn't have to, over a quarter (28%) stated they still would. When asked to indicate what would motivate them to go the extra mile, most respondents said increase pay (34%) and better commission and bonuses (27%), with international recognition also ranked highly with 27%. Almost a quarter (23%) of respondents also said the opportunity for personal career growth would entice them to stay in a role for less money, with 25% said that flexible working hours was the most appreciated non-financial incentive.
"This research shows the answer to boost the UK workforce's productivity lies with incentive and compensation schemes. While money is unsurprisingly a big driver encouraging staff to go above and beyond the call of duty, it is not the sole motivator," Mr Castley said.