Which is Better – Promotions? Or Bonuses?

What is the best way to motivate and retain employees: offering raises or bonuses, or providing promotions to qualifying employees? At first, it seems that more money is the answer to virtually any question beginning with, “Would you rather…” but taking a closer look indicates that workers are more satisfied with the recognition, security and investment of promotions.

Raises and bonuses may be more difficult to offer in times of stagnation or underwhelming productivity and output. While these circumstances may not appear to offer much in the way of morale boosts, they do offer a positive solution: provide employees with promotions rather than (or, in addition to!) additional compensation.

Promotions can help your company in several ways. As an aforementioned benefit, promoting your employees can be a way to reward them and to invest in them without having to shell out cash your company may not have, or may need to focus on projects moving forward. Promoting employees increases company loyalty, and this saves a huge amount in severance, HR, recruiting and onboarding costs.

Employees appear to be more motivated by promotions than by additional benefits or compensation. A promotion is a compact between company and employee that indicates that worker is doing well, and deserves recognition and additional responsibility or clout. Promotions make employees feel more connected to the company, and encourages them to cultivate and refine their own ideas. Their ideas lead to your success, if managed properly and given the right amount of encouragement and guidance.

Investing in your employees is vital to growing your business. Think about it: by promoting the employees who deserve to be recognized, you are exemplifying the behaviors of those employees, thereby setting a standard for your company. When new hires come in and see the optimal operations of these individuals, they are more likely to emulate this in their own day-to-day. Career advancement is absolutely invaluable to today’s employee, and promotions are a way to provide that satisfaction to them without sacrificing much of your bottom line.

Would you like to begin promoting your current staff to make way for new hires? Contact us today to devise a plan to increase your employee retention, decrease workplace dissatisfaction, and grow your Michiana business in the coming quarter!