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6 Ways to Motivate Employees by Using Little to No Money

Author: Christina Galoozis Date: May 14, 2010

Keeping your employees happy and motivated is a key ingredient to running your small business. After all, 13% of employee separations are voluntary—and it’s usually the best and brightest ones who move on the fastest.

But your small shop doesn’t have the means to pay inflated salaries or fund the benefits of a Fortune 500 company, so how can you breed loyalty and good feeling, not to mention hold on to your top workers? Consider the following six examples from small business owners across the country.
 

  1. Drum Up Win-Wins. When Matt Hudgins needs to cut costs at his Atlanta-based financial advisory firm, Mosaic Wealth Management LLC, he asks employees for their input. “Who better to know where to cut the fat than the employees?” he says. To motivate them, he offers 10% of the savings that are realized. (The same idea could work with business expansion proposals.)

  2. Fulfill Their Dreams. Bettina Hein, CEO of the Boston-based video production company Pixability, asked her three employees to list as many of their lifelong dreams as they could during a 20-minute meeting. She then pledged to fulfill one of these dreams within 90 days of the New Year. One employee wanted to witness a shuttle launch, so Hein sent him to Cape Canaveral for $350. “You wouldn’t believe how happy this made them all, and it cost me very, very little money and a bit of effort,” she says.

  3. Get Personal. When an employee of Rex Direct Net Inc., an Internet marketing firm in Cherry Hill, N.J., reaches a work-related goal or goes through a significant life event, the CEO acknowledges it with a handwritten, personal note. “Making the time to communicate your satisfaction can motivate employees who thrive on recognition and attention from the boss,” says Jennine Rexon, CEO. It’s a small step that can yield loyalty from your employees.

  4. Sweat the Small Stuff. Mike Lieberman of Square 2 Marketing in Warrington, Pa., says a handful of small, but important things motivate his employees. Every quarter, he hires a limo to take his team into nearby Philadelphia for dinner and an event. On Fridays at 3 p.m., employees enjoy an in-office happy hour thanks to a stocked office bar. And he regularly holds video game tournaments—in the office—to “help the team blow off some steam.”

  5. Do What the Big Guys Can’t. Owning a small business means you can be more flexible with employees’ personal needs than a large corporation. Kathleen Henson, who owns Henson Consulting Inc. in Wheaton, Ill., allowed one of her employees to set up a portable crib and bouncy seat in her office during the months after her maternity leave. “Traditional work environments can be taxing on families, so creating a work setting that puts family first is the cornerstone of my business,” Henson says.

  6. Appeal to the ego. Not all rewards are tangible. Public praise is often a powerful motivator. When employees make successful choices, let everyone know. Recognize and share behavior that results in money-saving ideas attracting the most new customers, or even healthy behavior. Flattery can also be contagious. An "Employee of the Month" designation, for example, can get employees' competitive juices flowing and motivate them to make work harder.

If these examples don’t spark any ideas for your company, consider going back to the basics. All employees want is to be treated with respect, says Jim Gellas of Pictopia, a photo stock shop in Emeryville, Calif.

“Funny how often this can be taken for granted, but yelling at, insulting and demonstrating a lack of appreciation can be strong de-motivators,” says Gellas. “Said differently, employees really respond when they feel appreciated, their feedback is considered and their efforts valued.”

Next: Employee Gifts: How to Give Tax-Free

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