Why non-financial KPIs are just as important as bonuses

The risk of rule breaking is higher in a remote world

Why non-financial KPIs are just as important as bonuses

When it comes to motivating a workforce, financial benefits often spring to mind. Traditionally, money-motivated goals are rewarded in the same way with bonuses or a pay rise. But workplace expert Amanda Rose believes encouraging employees to chase a target could be leading to compliance risks if businesses aren't careful.

Speaking to HRD, Rose, founder of Small Business Women Australia, said focusing on money-motivated KPIs alone may not achieve the best outcome in the long-term.

“When it's a financial benefit sometimes people can cut corners or use whatever means it takes to make the numbers and get the profit margin, but that has a long-term impact on the rest of the organisation,” she said.

With remote work comes greater risk of non-compliance if employees are under too much stress. A detachment from the physical office and the central workplace culture means people are more likely to feel they can get away with breaking the rules.

Read more: Who is responsible for engagement in the 'new normal'?

“You see it when scandals blow up in the media at big organisations like banks,” Rose said. “They realise that they built a culture of making as much money as possible and putting profits before people.”

Instead, Rose urged people leaders to make use of KPIs for both financial and non-financial gains, prioritising things like learning and development, staff satisfaction and culture metrics. These aspects are often overlooked when it comes to setting KPIs, but they play into a successful long-term growth strategy. Targets could include a certain amount of time spent participating in courses or earning a new micro-qualification.

“We live in a society where people just want to go straight to the top,” Rose said. “So I think a good KPI structure, especially for the younger generation and millennials, will help them understand a balanced life. It reminds them of the importance of education and engaging with others, as well as earning money.”

Read more: Employee engagement: Why now is the time to rewrite the employee playbook

Incorporating L&D into a KPI structure is something that is becoming more common and as the skills gap continues to hamper ANZ businesses, it’s only going to become more important. Amazon Web Services is one example of an organisation that places a high value on its L&D. Amazon has invested $700 million (USD) to provide free skills training in areas like cloud computing.

Business-wide KPIs can also be effective for driving diversity and inclusion. Last year, a number of business giants like Google, KPMG, Uber and Deloitte joined the Gender and Diversity KPI Alliance (GDKA). The initiative supports the adoption and use of a set of KPIs to measure gender and diversity within organisations.

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