Identifying and dissecting the effectiveness of compensation and benefits as a step to improve employee performance and its impact on motivation
(Case Incentif / Performance Bonus, What the best scheme? Monthly or Annual?)
Motivation is one of the key factors that significantly affects employee performance. It is influenced by various elements, including the compensation and benefits package provided by the company, as well as the structure in which these are delivered. So far, the compensation and benefits offered by Ecomobi have been highly competitive, and the existing scheme has been well-implemented. The question now is: how can we further improve this to enhance employee performance even more?
In today’s modern workplace, maintaining employee motivation, enthusiasm, and performance is not an easy task. Companies implement a variety of programs aimed at consistently supporting these aspects ranging from internal activity programs to those built around compensation and benefits
Competitive compensation and benefits strategies and programs have a significant impact on employee performance. One clear example is the provision of performance-based incentives or bonuses. Ecomobi has supported this by providing annual performance bonuses to the entire operational team. This has had a positive effect on employee motivation, as it stimulates individuals to continuously strive toward achieving their targets. However, the question remains: can we improve this even further? This paper will focus on the scope of performance incentives/bonuses—specifically the scheme, and the interplay of influencing factors that create reciprocal effects.
Employee Motivation Tends to Fluctuate
One of the key factors that influences employee performance is motivation. In reality, employee motivation is not always stable. There are times when employees are highly enthusiastic, but there are also moments when their motivation drops due to various factors such as work pressure, monotonous routines, or personal issues. This is a natural and common occurrence in any work environment. This is where the important role of compensation and benefits comes into play.
The above illustrates the fluctuating nature of motivation. Each employee’s motivation will vary, influenced by many different factors. This is where the role of the People team becomes essential to help maintain and stabilize employee motivation through various programs. Maintaining motivation through annual and monthly programs will naturally produce different impacts.
Incentives / Performance Bonuses: Monthly or Annual as a Motivational Booster
One proven strategy for maintaining employee morale is the regular distribution of performance incentives. But which approach is more effective? Both annual and monthly incentives come with their own pros and cons, depending on the company’s needs and business context.
These incentives are not only a form of appreciation for employees’ achievements, but they also serve as a source of renewed motivation, encouraging employees to consistently give their best. Regularly providing incentives makes employees feel valued and acknowledged. It’s not just about the money; it’s also about recognition for the hard work they have put in. The structure of how these incentives are released can significantly impact motivation.
Therefore, offering monthly performance bonuses is perceived as more effective in maintaining motivation, especially during periods when enthusiasm tends to wane.lebih cepat “ter-refresh” dan tidak menunggu sampai akhir tahun untuk merasa dihargai dan merefresh berkala motivasi karyawan setiap bulannya.
Direct Impact on Performance
Motivated employees tend to be more productive, loyal, and creative in completing tasks. They are more enthusiastic about achieving targets and take more initiative in contributing positively to the company. In other words, ongoing motivation through incentives is directly correlated with improved work performance.
Based on the above considerations, monthly performance incentives/bonuses will better maintain and stabilize motivation compared to annual bonuses. This is because monthly evaluations, releases, and the reception of incentives are tied to each employee’s performance. Of course, this approach should be further analyzed, and if feasible, the best scheme should be developed.
