Job satisfaction keeps employees motivated more than bonuses

Job satisfaction keeps employees motivated more than bonusesThe reported levels of stress felt by banking employees already suggests that generous bonuses do not necessarily equate loving the job. Now a new study published today by the Institute of Leadership & Management (ILM) confirms that across the business sector, the single most effective motivator is job satisfaction (59%), with just 13 per cent saying the prospect of receiving a bonus or other financial incentive motivates them to work harder in their role. The survey of over 1,000 employees found that a competitive salary and a good pension are highly effective motivators (49%) but getting on with colleagues (42%) is nearly as important. The report also highlights how important good managers are to ensuring happy and motivated staff.

Other motivational factors included how well staff are treated by their managers (22%) and how much control they have over their work (22%). Surprisingly, other supposed incentivising factors such as flexible working (16%), and opportunities for promotion (9%) were not viewed as being strong motivators, though they did vary according to which employee archetype you belong (see below).

When asked to identify one thing that would motivate them to do more, nearly a third (31%) of employees identified better treatment from their employer, more praise and a greater sense of being valued. However, while the majority of managers (69%) stated that they are “always giving feedback” to their staff, just 23 per cent of employees agreed that this is the case.

Charles Elvin, Chief Executive of the Institute of Leadership & Management, commented: “Understanding your employees and what makes them tick is vital in having a happy and motivated workforce. In the past year UK companies have collectively spent an astronomical amount on financial incentives for their staff. But this report is telling us there are far more effective, and cost-effective, ways to motivate people. These include giving regular feedback, allowing people to have autonomy in a role, the opportunity to innovate and improved office environments.

“What this also shows us, of course, is that having good managers is paramount in business, as they are key staff motivators who can make a real difference to their teams. It reinforces that you can never really overdo what we call the ‘five fundamentals’ of good management: coaching, giving feedback, listening, rewarding and recognising success and performance management.

“It sounds so simple, but something as basic as hearing ‘great work on that report’ can be a real boost to an employee’s confidence and deliver a sense of pride and satisfaction.”

The research also revealed that employees tend to fall into one of four clear employee archetypes, which each have different motivation factors and reward mechanisms:

Career Climbers: Likely to be under 35 and hard workers

Most interested in:

  • Training
  • Development
  • Career prospects

Sociable Workers: Likely to be on a below average salary, work hard, enjoy their job and respect their manager. Could be male or female.

Most interested in:

  • Getting on well with their colleagues

Financially Focused: Likely to be male –and currently working full time for their employer, rate getting on with colleagues and enjoying their job as less important than money. Men chose base salary and benefits (58%) as the most important motivational factor, while women ranked this as third most important (41%).

Most interested in:

  • Performance related bonuses
  • Financial rewards

Flexi-Workers: Likely to have been with their employer for a slightly above average length of time, be more qualified than the average employee and get on well with their manager. Other archetypes often change into Flexi-workers later in their career.

Most interested in:

  • Being able to work flexibly or from home
  • Varied start and finish times

Click Beyond the bonus: Driving employee performance to view the full survey.