Employee Motivation: Trends, Science, Practice, Assessment
Material and Non-Material Incentives – What Employers Use to

Trend 1. Adaptation of the motivation system for young professionals
In one of the projects we worked with, the customer complained that the organization had become younger — the average age of employees had decreased. This led to two key challenges: increased turnover and shorter uptime. The high length of service that could be observed earlier is no longer there.

Therefore, there was a need to fine-tune motivation systems for young people, such as reducing the terms of bonuses, applying other methods and formats of work, and launching alternative career tracks.

Trend 2. Adaptation of the motivation system for blue-collar specialists
This is also an illustration of how organizations rebuild their systems at the moment. From the point of view of all forecasts, in 2030 the maximum shortage will be in qualified, line personnel. But now there is a shortage of representatives of working professions.

In some places, there are already 3.7 vacancies per locksmith. Therefore, employers at the moment turned to the working personnel, began to translate motivation systems into a language understandable to workers, began to return the deal as an element of remuneration, and prepared to replenish the number of shift workers at the expense of more remote regions:

Trend 3. Introduction of a long-term motivation system for managers and key specialists
The request for long-term incentive programs arose in the second half of 2022, when all experts expected the opposite. Who needs long-term motivation when we have such volatility?

But the owners and shareholders suddenly started talking: what's strange about it? We focused well on the current efficiency, because of it we motivate so harshly. And how to make sure that managers and employees, namely key specialists, think not only about today, but also about tomorrow and the day after tomorrow. And this reconfiguration began – supplementing the systems with long-term incentive programs with a vesting period.

Vesting is when you work, for example, for three years and only then you get the promised big carrot. True, not immediately, but in parts over the next few years.

Trend 4. Implementation of a system of remuneration for non-managerial personnel, tied to the company's top-level financial indicators
This is what is called profit-sharing all over the world, when the organization wants to share profits even with cleaners and janitors. That is, the basis for calculating the bonus fund, among other things, is the profit of the organization as a whole.

Trend 5. Implementing flexible and personalised benefits
packages Flexible benefits are all of our "cafeterias" and what's called a personalised "business lunch system". Young people can be thanked for this trend in many ways. With its help, it is calculated to retain it, reduce fluidity.

Personalization in this case is not considered from the point of view of achieving some levels. It's not about the fact that the taller you are, the fattier your pie is. Everyone can choose the piece of the pie that is interesting to them.

Trend 6. Transition to pay for skills and competencies
We already have a fairly massive trend – pay for skills. The organization's dependence on the competencies of employees is growing.

We can have people with different competencies in the same position. And this makes up a reward system based on regular assessment. There is an opportunity to move upwards, remaining in the same position, but growing your expertise.

Remuneration can also grow from successful participation in some projects in certain roles.

Trend 7. EVP
implementation Implementation of comprehensive value propositions. Here is the theme of human-centricity, and the topic of employee happiness.

Recently, there has been a growing body of research trying to identify what makes people happy and what makes them unhappy at work.

Hot cakes
Summarizing the above, it can be noted that trends are continuous practices that change and update at the moment. And I think that in a year we will meet, and something in these trends will definitely be different. This is always the freshest, the most relevant, these are hot cakes.

The emergence of new trends and the renewal of old ones is not caused by the fact that organizations have nothing to do, nowhere to put their money and they are fooling around. They are just under pressure from the labor market, candidates, and the need to increase productivity. And it's all about how to make every employee produce more.

Scientific approach to motivation

There are very few companies that can say that their entire motivation system is built on a scientific basis, that they understand why they form this and not that program of material incentives and why this leads to certain results.

An understandable example is that Google once decided that they knew how to motivate employees now and built their offices in the form of houses for hobbits. Others looked at it and began to do something similar. Then Google analyzed the effect and realized that nothing had changed and closed the hobbit offices. Following them, others began to close. This is an indicator that there is a lack of scientific basis in the construction of motivation systems.

Map of sciences
As consultants, we have the opportunity to solve problems together with our clients. And together we went in the direction of science, in the topic that is called human knowledge. It is clear that there is no separate science about human motivation, but there are others, thanks to which it is possible to influence it to one degree or another.

We made a map on which we placed the sciences, starting with what our ancestors thought about humans thousands of years ago (beliefs, myths, theology, philosophy) and ending with biohacking, which is now just beginning to be started in the West.

There are a lot of sciences on the map. There are things that we are skeptical about: astrology, parapsychology. But I think everyone knows at least one or two companies where tarot cards are used in the HR department. And in the new version of Bitrix, among the roles in which AI can act to help with tasks, there is a tarot reader. And this digital assistant, as statistics show, is more popular than a psychologist.

Model of human knowledge in business
Based on the map of sciences, we have created a model of human knowledge in business (more about the model in the presentation). What this diagram is about – about the factors that can be used to indirectly influence the behavior of our employees.

The lowest part is what a person comes to the company with: his physical health, temperament, psychological capital, value orientations, attitudes, and thinking. All this actually affects labor productivity.

If he eats right, he feels good, he most likely works better. We say the same about stress, about temperament, what is characteristic of it. These are all things that we, in fact, as a company, usually do not directly influence them.

Next, we have a line of labor characteristics, that is, what kind of work, what it does. Even further away is the inner circle. In what corporate culture he works, what values he has in the coordinate system where he exists.

Further afield, it is how our structure is built, what kind of subordination and hierarchy we have. What is our system of material and non-financial motivation? It's quite far from a person already. Well, macro-environmental factors are very far away. The situation in the state as a whole.

This hierarchy of factors, in our opinion, indicates what we can and cannot change. And how close is what we influence to what directly affects a person. That is, to what extent we really manage labor.

Most of the projects where there are attempts to change people's behavior are quite far from the person. We either change the organizational structure or change and try to understand the corporate culture.

The closest thing is how the small team in which he works is built. How the sequence of his works is built. All that we call labor factors.

There are factors that we cannot influence at all, but on which we also try to build some kind of motivation system. Such a pyramid of factors allows us to analyze how much what we do helps us.

Motivation
tools Next step: next, we analyze what incentive systems there are in general (material and non-material), what tools are available within the company.

One of the cases is that a fairly large company analyzed 400 instruments of various remuneration and incentives. Of these, 18% of instruments are basic remuneration (forms of allowances, compensations, benefits). And 7% of the instruments are rewarded for the result.

Further, 28% are the tools that should determine the work environment and build the motivation system we need through it. Development – 30%. Recognition - 17%.

We then analyzed the number of tools and the amount of money the company spends on them. It turned out that 90% of the costs fall on the first two tools. And all the rest, in the development of which the company actually invests a lot of time, are practically not used.

It seems to me that this is just an indicative imbalance in understanding how scientifically justified the incentive system is, to what extent, when we developed the tools, we understood what we wanted, and then when distributing money, we understood what we were doing.

Any
system of cumulative reward is a balance of goals and needs of a person. And here is the question of how individually we are able to build a motivation system today. To what extent we individually understand a person.

The model of aggregate incentives that we work with includes not only money and not only compensation. In 90% of cases, the issue of recognition is at the center.

It is difficult to agree with the customer on recognition. We say that it is necessary to recognize the achievements of people. We are answered: do you want us to hang Boards of Honor everywhere?

Yes, for some categories of employees, the Board of Honor is still a very important incentive tool. There are Boards of Honor at factories, and people treat them with respect.

In the IT company, there is a categorical rejection of the Board of Honor. Although IT specialists have a need for recognition. It seems to me that it is even greater than that of the workers. But they need a specific recognition, recognition among their own people.

Recognition of merit is the most underestimated tool of non-financial incentives so far. But I think it's important that we recognize a person's achievement, we need to help him see that he's achieved something. And in order for us to understand that he has achieved something, we need to have a more accurate understanding of his work.

We must be able to see his achievement. It can also be small. It can be within the boundaries of the week, within the boundaries of the day. And for this, we now have new tools.

Motivation for project teams
Projects are different. Global with a huge budget and internal (for example, a New Year's event or a small IT automation project), where we are talking about small budgets and a different team composition is assembled. But in both cases, a result is needed. It is important that all team members have the same bright eyes, and this is a matter of motivation.

Motivation is an internal story, it is sewn inside. And the most direct way to find out from a person what motivates him is to ask about it. We have excellent forms of open-ended questions, and processing the answers received will give you an understanding of what is required and what cannot be done categorically.

Team motivation is a more complex entity because we need a combinatorial decision to be made by everyone who needs to deliver the expected outcome.

The project manager, as a person who is responsible for the final result to the customer, should try to combine all this, fit it into the existing conditions of the organization's remuneration system and look for a compromise solution for such a temporary entity as the project team.

The authoritarian management style, which, along with the democratic one, is described in the well-known McGregor theory (X and Y), is not very suitable for motivating project teams, since in most cases it is focused on standard, prescribed regulatory mechanisms.

There should be a system of instructions, a system of control reports. We understand that deviation from the set standards will be subject to censure and punishment, and, accordingly, in most cases, the system of assigning work is built through some kind of restriction and coercion.

The democratic management style is more suitable for project work, especially for internal projects of the organization. Here the emphasis is on the driver for achieving the goal, and the task of the project manager is to give each participant the opportunity to reveal their own abilities.

The Motivational Drivers questionnaire consists of eight scales: people, caring for others, status, money, security, freedom, development, and creativity. In it, as in the other two — "Personality Traits" and "Destructive Behavior" — there are no bad and good meanings.

Any meaning is what has helped us become who we are now. That is, all these features helped us achieve what we have at the moment.

This slide presents the results of the diagnosis of one of the managers. If you look at its motivators, you will see that status, creativity, and security reach the highest values here.

His money is in the "six", in the zone of moderate values. This does not mean that he does not need material values. It is possible that now he has a comfortable financial situation, and at the moment other aspects are more important to him.

If you diagnose both the leader and his team, you can compare the values of the profiles. This will make it clearer to the manager in what he coincides with his employees, and in what there is a difference. This understanding influences further actions, for example, the choice of motivational systems (material, intangible or a combination of them) aimed at business development.

They want to receive a decent salary, learn quickly and easily, and grow up the career ladder. Well, a lot of people at the moment want to actively participate in the project activities of the organization.