Last month the Hay Group issued guidelines for “Engaging and Enabling Employees for Company Success” in Workspan magazine, the publication of WorldatWork.

Quotation

“Retaining top talent is a key concern in good times and bad, given the importance of these employees to a company’s success and competitive edge. Unfortunately, many organizations rely too heavily on compensation as the answer. … Instead of zeroing in on compensation, organizations should focus on two key areas to keep and motivate their talent: increasing employee engagement and developing systems that provide better support for employees’ success.”

The authors expand on these two key areas as follows:

Quotation

“To foster high levels of engagement, companies must make greater use of nonmonetary rewards, such as career growth opportunities, meaningful job designs and recognition programs. …

“Organizations must ensure that employees understand what they are being asked to do … and that their individual goals are connected to what the organization needs to succeed in the future. Organizations that build better “line of sight” between business results and job accountabilities tend to have higher levels of organizational clarity and employee engagement.”

Why are non-monetary rewards critical for successful recognition? Because cash compensates, it doesn’t motivate. When rewards are given as cash (bonuses or incentives), it quickly gets lost in the recipient’s paycheck. The actual recognition for effort that encourages engagement is lost.

As for “developing systems to support employee success”, strategic recognition is a powerful system that, when deployed properly, gives employees that necessary “line of sight.” By following strategic recognition best practice of linking every recognition to a company value or strategic objective, you are strongly and positively reinforcing precisely those behaviors or actions that demonstrate the company values in achievement of those objectives.

What systems do you recommend for encouraging employee engagement? (Note, I'm not suggesting a system OF engagement, but a system for ENCOURAGING engagement.)