For hard-working small business owners, the term “employee motivation” is a bit hard to swallow.
You’re already paying wages, employment taxes, health insurance premiums, retirement benefits and maybe even additional perks to your employees—now you’re expected to motivate them, too? Sounds downright unreasonable. Yet it’s something you’ll have to do if you want a productive work force.
Employees don’t need to be motivated because they’re lazy, ungrateful or dispassionate, which are all common misconceptions among managers. Human nature dictates that we want to spend our time doing something worthwhile and feel fulfilled in the process—both professionally and personally—according to research by behaviorist Alfie Kohn, among others. If your company doesn’t provide that for employees, they will eventually disengage and seek it somewhere else.
Now that’s a lot of babble without a lot of tangible advice on how to get maximum productivity from your workers. So let’s examine what employee motivation really is—and how others have used it to fuel their small businesses.
A Marriage of Money and Mission
Providing fair pay may seem like enough. But people are not motivated day to day by a paycheck, the mere fact that they have a job, or other guarantees like paid vacation—yes, even in a down economy—according to employee motivation experts John Ingrisano, a business consultant in Algoma, Wis., and Frederick Herzberg, a leading American psychologist during the 1960s. These perks help boost workplace morale. But they don’t keep workers motivated to do their best work on a daily basis, and they don’t keep them from jumping ship.
NFIB member Christian Byler knew this when he opened his auto repair shop, Luxury Auto Service, in Jackson, Tenn., in June 2008. Byler says as an employee, he was unmotivated by bosses who took the “you’re lucky to be here” attitude, and he vowed to run a business whose mission could motivate its workers. For Luxury Auto Service, that mission is providing the type of honest repair service even the most skeptical customers can trust.
Yet after hiring the company’s first two technicians in 2010, Byler and co-founder Rex McMahan realized that their work force would not be instinctively motivated by the company’s mission. It’s easy, says Byler, to be passionate about a business you’ve started, but employees lack that emotional connection when they’re first hired. The partners were then challenged with getting their employees to “buy in” to the philosophy.
They devised a three-pronged approach. First, if Byler or McMahan notice special care or outstanding service performed by the technicians, they’ll acknowledge the work on the spot, and later go out together for a steak dinner. The recognition helps them feel a sense of pride in their work, he says, and the tangible reward is a way for him and McMahan to take interest in the employees outside of work—a key influence on employee motivation. “One of the biggest hindrances to high performance is no one noticing you’ve busted your butt,” Byler says.
Second, if a technician doesn’t take the time to find the root of a car’s problem, evidenced by a patch-up job or a misdiagnosis, they’ll be asked to fix it on their own time. It’s a way to let employees know that unlike other repair shops, the emphasis is on quality, not speed.
And third, Byler and McMahan are developing a monthly bonus schedule for the technicians that is based on a mixture of individual and team productivity levels, excluding mis-ordered parts and other mistakes. “Money certainly doesn’t hurt” when it comes to motivating his employees, says Byler, though the bonus’ real purpose is to remind technicians that their primary goal is happy customers, he says.
The partners have presented the ideas to both employees. While one technician told Byler he is excited about the incentives, the other didn’t seem to care much. (That’s an attitude that may cost him his job, says Byler.) “It’s a good place for us to start,” he says.
Indeed. Byler’s approach to engaging his employees on an emotional level—tying their rewards to providing good service—is exactly what employers should be doing, says John Schaefer of The Schaefer Recognition Group, an employee recognition and consulting firm in Glendale, Ariz. When your employees feel that their contributions are affecting the success of your company, they’re likely to feel motivated to make even more contributions.
“It sounds kind of corny, but employees really do respond long term to being appreciated, respected and truly valued,” says Schaefer.
Competitions and Camaraderie
Bonuses, rewards and other incentives are not complete motivators on their own. Without a positive company culture, a likeable boss and other key elements of job satisfaction, these tactics may offend employees, says Schaefer. They’ll think you’re trying to buy them off, or that you assume they’re not already giving 100 percent effort.
Anne Puthoff, owner of NFIB-member company Emmy’s Bridal in Minster, Ohio, has been able to strike the right balance. Three years ago, she and business partner Lori Rindler started rewarding their workers for meeting monthly team sales goals with gift baskets or a paid afternoon off. They’ve also handed out prizes, like $25 Visa gift cards, to individuals who sell the most dresses or accessories during special sales events.
The results have been favorable. “Everyone now understands the value of working together to close a sale,” Puthoff says, and “the edge of competition [at special events] has clearly benefited us. We sold five times the accessories compared to last year.”
In reality, the $25 gift cards aren’t what the employees are after—they place much more value on accomplishing the goal and being able to boast their winner status, says Puthoff. That’s why the incentives work.
But the incentives are also effective, she says, because her business maintains a positive, team-oriented atmosphere. The store’s 12 sales staff members regularly joke around together at work, and cover each other’s shifts when someone has a death in the family, gets sick or has a crisis with their kids. Plus, their work schedule allows for plenty of time off during the off-peak seasons. “We have fun together at the shop. And if you’re not feeling a constant pressure to be at work, that goes a long way toward enjoying your job,” says Puthoff.
She’s right. The only way to get real motivation—the kind that makes employees productive on a consistent, unsupervised basis—is to create a work environment that supports and fosters self-motivation.
Tailor Your Approach
Each business needs an approach that works for its particular work force. Fun workplaces and employee camaraderie sound like great motivators, but different workplaces need different methods. How does a small business owner motivate window washers, fast-food workers or janitors? Salespeople on commission may need an entirely different set of incentives.
Schaefer tells the story of a client who owned and operated a slaughterhouse and was struggling to increase the productivity of its work force. The company couldn’t encourage an employee to work faster, since that would be dangerous. So it put incentives in place for safety, and it gave employees a second goal: If you arrive at work on time every day of the month, you get “points” that, when added up, can be traded in for a reward—logoed merchandise, travel or something else from a company catalog that the employee chooses.
“Some people might say that’s ridiculous—showing up on time should be a given. But look at the benefits: The company’s productivity increased, since more people showed up on time, and the cost to get that productivity was very minimal. Why not do what works?” says Schaefer. In other words, don’t be afraid to tailor motivation tactics to your own work force.
For other employers, especially those with a younger work force, that may mean incorporating motivators like flexible work hours—either as standard practice or as a reward. In a 2009 study by Fidelity Investments, 75 percent of Americans between age 22 and 33 indicated that work-life balance drives their career choices. And a surefire way to honor that balance, says Schaefer, is allowing them to work when they want.
“They work when they’re feeling motivated, whether that’s 2 a.m. or 2 p.m. If they’re working only when motivated, they’re being productive. And ironically, they’re motivated more often when they’ve got a good work-life balance,” he says.
However, Schaefer warns flexible work hours don’t work for all types of businesses.
Whatever reward you choose, the key is to make sure it works for your particular employee base. That attitude was adopted by Angil Tarach-Ritchey from Ann Arbor, Mich., who operates a Visiting Angels Inc. in-home care franchise. When Tarach-Ritchey discovered her company’s sales conversions from online leads were significantly lower than sales conversions from call-ins, she asked her staff about the discrepancy.
The staff seemed to be handling every lead consistently, Tarach-Ritchey found out, so she was left wondering how to boost online conversions. She decided to post monthly, quarterly and yearly sales goals for the team of women, and matched them with incentives: pedicure or dinner and drinks, additional paid vacation days, and a two-day hotel package.
“I knew these two employees loved to get their nails done, which is why I offered free pedicures. Though the monetary value may not seem like much to some, for my employees it’s a lot—it’s a treat for them to go out to eat without paying,” she says.
Because Tarach-Ritchey knew her employees well, the incentives worked. By the following quarter, everyone met their conversion goal—and the staff has met goals in every quarter since. Overall, conversions have gone up 30 percent. “I credit the incentive system entirely,” says Tarach-Ritchey.
While other managers in her position may have considered threatening employees who didn’t meet their goals, she did not believe this would be effective. “People don’t get excited when you threaten their job,” she says. “They get excited when they see what they can accomplish.”
Rewards are great, but are they legal? Read our guide to what you
can and can’t do at www.NFIB.com/employee_rewards.