Do you have responsibility for recruiting or retaining talent for your growing company? Focusing on extrinsic rewards isn’t the best strategy when you’re trying to attract and keep the best and brightest for your company.
What is the difference between extrinsic and intrinsic rewards? It’s simple. Extrinsic rewards are tangible. One can attach a specific value to the reward. Compare that to non-tangible rewards such as heaping praise on a diligent worker. Attitude cannot be specifically measured in monetary terms. It is a soft quality. In short, intrinsic rewards don’t have a specific monetary value attached to them, but they do have a value in conferring a psychological or emotional boost, which can translate into an economic asset.
Research shows that extrinsic rewards are not as powerful as many managers think they are. They can also dampen a worker’s appetite for intrinsic rewards. Dishing out a steady diet of extrinsic rewards may also lead to the “over justification” effect. Intrinsic factors often pack a bigger punch. They’re much more satisfying and can boost a company’s retention rate.
Taking a personal approach to managing employees is a great playbook strategy for a small firm. From a recruitment standpoint, smaller companies have a significant advantage over larger companies. They offer key ‘soft’ benefits that prove alluring to Millennials. The best talent seeks out challenging work. They’re not satisfied with simply pushing pencils. They want strong engagement, according to a recent poll.
Look for opportunities to tout your firm’s soft benefits, including internal culture, sense of humor, and overall atmosphere of the workplace.