A Simple Approach to Employee Motivation

Most business owners approach employee incentives with mixed emotions.

They want to get employees performing better, but they are frustrated that the team are not inherently self-motivated simply because they were hired to do a job and they don’t want to give up too much of an already limited bottom line.

This isn’t about greed. It is really about the constant memory of the early days, when they typically worked endless hours for a pittance. Now that some of that effort is finally bearing fruit, he or she is being asked to share a chunk of it to get the workers to do what they should be doing anyway.

But they do want to provide some system that creates a sense of urgency and responsibility in their employees. And they are open.

They just are concerned that employee incentives fail to motivate enough of the desired behavior, and too frequently wind up becoming a permanent expense with a temporary impact.

So how do you create incentives that avoid becoming an entitlement and are dynamic enough to change with business conditions?

Start with Understanding Levels

There are typically four levels of incentives in a business.

1. Most employees have their performance measured by job description and position. Their job description includes productivity measures and they are rewarded for achieving them.
2. At the next level are employees who supervise and coordinate the first level employees. They are rewarded based on how the entire group under them performs, so their incentives depend on helping as many of their direct reports as possible earn incentives.
3. Then there are managers who have the authority to make decisions that will directly impact our bottom line. They can be rewarded for profitability, or through a custom plan, designed around the impact of each individual performance.
4. At the topmost level you may have a person or two who you need, who you never want to be without. If you expect an employee to stay with you for life, then you need to offer a lifechanging reward system, with long-term benefits that accumulate and can provide them with an entirely different lifestyle than when they came to your company.

Different Strokes for Different Folks

People are motivated by different things. So it is important to take a careful observation of the people in your organization to determine the types of incentive that will work best for each of them. For some, money is a motivator. For others, recognition or helping the rest of the team (which is a kind of recognition) is far more powerful. In reality, all the forms of motivation work to some degree, but different types are more or less effective depending on the time circumstances. above and below the horizontal line “individual” and “team.” Now you have a tool to track which incentives you’ve used, and which ones work in a given situation.

There are four possible combinations for incentives:

·  Monetary/group

·  Monetary/individual

·  Non-monetary/group

·  Nonmonetary/individual.

How to determine which incentives will work best? Sometimes the answer is trial and error. To start with, however, you can make a pretty good guess at the type of incentive that might work by the personalities attracted to the position.

Not One and Done

Once your incentive program is in place, you are not done. You will need to make changes to the program regularly, partly in response to changes in your business and partly because it keeps the team on their toes. There are many good reasons to change incentive programs regularly, not the least of which is the “Hawthorne Effect.” That is the seminal behavioral study on office lighting and productivity that showed lighting levels were not nearly as important as having the employees know someone was paying attention to their productivity. For those who aren’t familiar with the study, efficiency experts wondered if the level of lighting in an office affected productivity. They increased the lighting, and production went up. They increased it again, and production went up more. Then they reduced the lighting- and production went up even more. In follow-up interviews, they discovered that the employees were reacting to the recognition of their importance to productivity, not the lighting itself.

You can adjust incentive programs at any time – and the expectation should be set early on in the program that changes will be made from time to time.

All incentive plans go stale. Employees learn to game them. Worst of all, too many managers allow an incentive to remain in place long after the goals are being exceeded with ease, and the bonus has slipped into an entitlement.

There is one critical point to emphasize in any incentive program. Nothing motivates forever. Every bonus scheme has a lifetime. Any plan should be introduced with the caveat “This incentive is intended to motivate specific behavior and results. Management reserves the right to modify or cancel it at any time.”

Change incentive plans regularly. Swap a long-term individual monetary plan for a short-term non-monetary team goal just to loosen things up. Give team members the ability to excel individually from time to time.

When you finally come up with a program that works, avoid the temptation to dust off your hands and walk away. It merely means you’ve bought some time until the next incentive.

The bottom line is this – employees respond well to a carrot, as long as it is not the same carrot all the time.