Incentive compensation professionals work hard at developing incentive plans that drive employee motivation while also meeting their company’s strategic objectives. In the past, this has been achieved by using rules of thumb and stringent financial analysis. 

Yet, hard work is not enough in today’s turbulent times.  

Man leaning back in chair behind computer looking up at motivational words looking satisfied
Create a Great IC Program AND Make Sure it is Understood

Today, compensation professionals need to add a few more tools to their tool belt. 

Specifically, they need to add a deeper understanding of behavioral science and communication strategy. A great incentive program can be a defining factor in an organization’s success but as the world evolves additional measures are needed to ensure that it is resonating with and being understood by the field. Adding behavioral science into the mix can significantly improve your program’s impact and the performance of your teams. Tie these principles together with award-winning communication and you have a home run.  

These needs are driven by three main factors:

1) the changing work environment, 2) shifting employee expectations, and 3) changing market dynamics. 

Infographic with icons that shows the three main factors impacting total rewards in today's work environment
Factors impacting total rewards that can be addressed with behavioral science

First, the changing work environment is one in which the old ways of working no longer suffice. 

This is in part driven by COVID-19 but has also been generally shifting for the past 10+ years.  Our work is becoming more integrated, more automated, more social, more distributed, and requiring greater creativity and flexible response by workers. The challenge is that these new requirements require a new way to incentivize people.

Even in traditional sales where individual metrics have been the golden measure, work is shifting so that individual performance is tied to a number of other factors outside of sales control.  To maximize return, incentive professionals need to understand the psychology behind why employees do what they do – so that they are motivated to be flexible and creative in the changing work dynamics.  Behavioral science can help in identifying those underlying motives and guide IC Directors on how to tap into those drives.

Second, employee expectations have been shifting.

This began even before millennials entered the workforce and is now in hyper speed as Generation Z is coming on board.  The old ways of incenting people don’t have the same motivational pull or appeal that they used to.  There are new expectations about what a company provides employees – beyond just a bonus and good working conditions.  Workers are looking for companies to align with their purpose, provide them with non-work growth opportunities, and help them satisfy intrinsic needs.

Again, the design of a total rewards program needs to understand and take into consideration the root drivers of employee behavior.  People are expecting companies to treat them as emotional human beings and respect their individual desires.  Behavioral science provides a lens through which you can clarify what these new expectations are and how your company can satisfy them. 

Finally, the market is shifting quickly. 

With companies moving towards distributed workforces, top talent can work anywhere while staying home.  The speed of innovation and the fast-changing dynamics of automation and global competition, even in small business is rapidly accelerating change.  Political and social factors are interluding into workers’ lives more and creating new stresses and issues that they bring with them when they come to work.  Workers need to have reward programs that take these outside elements into consideration.  Understanding the impact that these changes can have on an employee’s well-being and motivational profile is essential to creating a successful total rewards program.  Behavioral science, once again, can offer some of those insights.

Overarching all of three of these elements is committing to developing incentive communication that works. Historically, most organizations have communicated incentives poorly. Whether it’s too much information, too little information, bad messaging, bad framing, or something else – these communications have a negative impact on otherwise great programs. You need their communications to both inform and engage – to spur new behavior and actions.

Power points and live meetings alone are no longer sufficient to effectively explain and excite employees about their incentives. It is not only the mode of communication, but also how those communications are crafted that needs to be updated. Most companies forget that they are dealing with emotionally driven human beings when they communicate. Using insights from behavioral science we know that the way a communication is framed, the words used, and the images that are presented can drive vastly different behavioral responses and performance. With shifting attention spans and evolving motivational drives, employees are looking for greater visual insights and more interaction that meet the standards they have become accustomed to in this digital day and age. 

If your compensation team embraces these new ways of thinking about work – integrating insights about why people operate the way they do into rewards design and implementing the best communication strategies – you can excel far beyond the competition in motivating your employees. 

Hit your home run today.

Work with us to integrate behavioral science into your total rewards programs and engage your team with our award-winning incentive communications.

Questions or comments? Use the form below or email them to behavior@lanterngroup.com

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