Dive Brief:
- Traditional merit pay, benefits and salary are no longer enough to drive employee engagement, according to a guest columnist Employee Benefits News.
- Kris Duggan, CEO of BetterWorks, also writes that employers looking to attract and retain the best talent need to be "in tune" with who workers are and identify what workers value. Mainly, he writes, they seek collaboration, transparency and opportunities for growth, along with development and learning.
- The formula of performance management and compensation typically being intertwined across the workforce made sense when compensation rated as the top performance motivator, But that's not true any longer, Duggan writes, adding that frequent conversations between managers and employees to keep the latter plugged in is quickly becoming the reigning performance motivator.
Dive Insight:
For Duggan, taking compensation out of performance management "frees managers and employees to set more ambitious goals." He writes that connecting goals to compensation the old-fashioned way (a percentage of salary based on specific objectives) just results in inaccurate data. The better alternative is fair compensation mixed with frequent feedback and development opportunities.
He adds that keeping employees focused on how their work connects to corporate strategy is more potent than checking things off a list because it dramatically improves employees' sense of connection and engagement, while aligning the organization.
His solution is to pay a fair wage and set really high employee expectations and goals only "loosely coupled" to pay and merit increases. Performance development must be ongoing to actually motivate people.