How To Incentivize Your Employees To Become Better-Trained

We are all well aware by now that an increasingly global, and thus more competitive, economy demands a very skilled workforce. But, especially for small and medium-sized companies with smaller training budgets, keeping up can be hard or impossible.

The reassuring news is that motivating workers to stay up to date might be easier, and less costly than you might believe. A new study found that employees who were given a small reward up front, and asked to commit to taking just two classes, ended up taking six times more courses than their peers who received no such incentives.

It turns out that the key is not in the dollar amount employees are offered, but in how it’s explained to them. Teck-Hua Ho, a professor at the Haas B-school at Berkeley, and Catherine Yeung of the National University of Singapore studied 4,000 people whose employers wanted them to take a series of training courses.

One group was offered a one-time cash incentive of 60 dollars as compensation for attending two classes, each of which cost 30 dollars, within four months. Then, researchers asked each employee to sign a non-binding agreement that they would show up for specific training sessions. The second group was told that the 60 dollars’ payment was a reward, not a reimbursement, for signing up for two courses within four months. Workers in this group were not obliged to commit to anything in writing.

The results were, the study notes, “extraordinary.” Over nine-and-a-half months, during which no further payments were offered, the employees who were told the 60 dollars was a reimbursement for out-of-pocket expenses, and who committed to two specific courses up front, finished six times more training courses than the group who thought the initial 60 dollars was a reward and who committed to nothing.

Why did the first group complete so much more training, even though they had to pay for most of the classes themselves? “We believe subjects who had two ‘free’ courses at the beginning, and who were asked to indicate their future plans, were prompted to adopt a more long-term mindset toward their careers,” says Ho. “So they were more likely to invest in training,” long after any more reimbursements were offered.

The study notes that the research was based in part on the upfront incentives some corporate wellness programs use to encourage people to exercise more or lose weight. Once employees start those efforts and experience some success, they often get motivated from within and just want to keep going. The study suggests that — once people realize that it can make them more promotable, and more marketable — learning new skills is likely to have the same effect.
Written by Anne Fisher

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