Small and mid-sized business owners often think their employees are at risk for cherry-picking by other companies who can offer higher wages. But most of the time, pay level alone won’t persuade workers to go somewhere else. It also won’t motivate them to high performance at your organization.
That’s not to say money isn’t important. It makes a difference on some level, of course, in attracting and retaining employees. But research repeatedly points to other factors that more effectively strike at the heart of what really matters to employees – that is, what motivates them to above-and-beyond performance. Employee engagement firm TINYpulse’s 7 Key Trends Impacting Today’s Workplace report, for example, says the company’s research showed that “money doesn’t even crack the top five reasons employees go the extra mile.”
What seems clear from research is that, while lack of fair pay de-motivates employees, money in and of itself does not motivate them. In other words, employees should be paid competitive wages, as much as smaller companies can bear them. Once that basic is covered, however, other factors will more heavily influence employees’ job satisfaction, engagement and willingness to go beyond minimum expectations.
For smaller businesses, who simply may not be able to afford to pay high employee salaries, such results should be encouraging. To effect increased performance, the secret is to understand and deliver what motivates employees, and small and mid-sized businesses can compete in this arena as effectively as larger companies can.
In his New York Times bestseller Drive: The Surprising Truth About What Motivates Us, author Daniel Pink asserts that motivation in the workplace (and elsewhere) is driven by:
- Autonomy, or the ability to direct or have control over our work.
- Mastery, or the ability to get better at the work that matters to us.
- Purpose, or the desire to participate and make a difference in something bigger than ourselves.
Nine Strategies to Motivate Employees
With this in mind, smaller businesses can use nine approaches to cost-effectively increase employees’ job satisfaction, motivation and engagement.
- Give employees ownership. Create a culture of trust and accountability by letting employees control meaningful projects or tasks with minimal (or no) management oversight. Engage employee teams in decision-making, giving them increased ownership over their work as they prove their ability to manage projects effectively. These opportunities develop employees’ leadership skills – a benefit to the company – and make them feel they have a role in the organization’s long-term future.
- Praise generously. Employees feel valued when senior management and supervisors offer sincere compliments. There’s no such thing as too much praise. Every employee needs it, frequently and in multiple forms – through personal words of appreciation, recognition at meetings in front of peers, a hand-written note or offering a small but highly valued perk. Ways to recognize employees are nearly limitless, and acknowledgment is especially significant when it is customized to the individual recipient. If you’re not sure what form of recognition would be most meaningful to your employees, ask them.
- Get to know your employees. As companies grow, it gets harder to interact one-on-one with your employees. But they are eager to hear from leadership, especially about where they and the company are succeeding and the vision for where the organization is headed. Commit to connecting with every employee individually several times a year, getting to know them as people. Let your employees as a whole hear from you regularly through group meetings, company-wide social events and email or other communication tools.
- Listen and act. Bear in mind that communication should go both ways. Every interaction with employees is an opportunity to listen to feedback and ideas. Take those opportunities and, whenever possible, act on the information you’ve heard and let employees know you’ve done so.
- Build a community. Employees want to feel connected to each other, as well as to the company. In fact, TinyPulse’s research showed peers are the No. 1 influence in driving fellow colleagues to go the extra mile. Throughout the year, give employees chances to interact in the workplace and after hours through events like late-afternoon happy hours, company-wide volunteer projects, monthly birthday celebrations or weekend picnics to which employees’ families are invited.
- Link employees to the bigger purpose. Employees who understand how their work contributes to the organization’s goals are more likely to stay engaged. Make sure your company’s vision, mission and strategies are well defined and that each employee understands how her goals contribute to the organization’s objectives. Share stories that demonstrate how employees’ efforts have helped customers, addressed challenges in your industry, affected positive internal or external change or otherwise contributed to success.
- Evaluate supervisors. A 2017 study, “Leadership Effectiveness Measurement and Its Effect on Organization Outcomes,” showed that direct supervisors have a major effect on employee motivation. Employees want to work for supervisors who value and support them and who help them progress in their careers. Yet, TinyPulse’s study showed that about half of all employees are dissatisfied with their direct supervisors. In smaller companies, employees sometimes become managers by default, perhaps because they’ve been around a long time or because they excelled at a previous role in the organization. Many step into the role without adequate preparation. Consider asking employees to respond anonymously to a survey about their supervisors’ skills. The results will tell you where you may need to provide training to help managers improve their abilities to communicate and mentor.
- Invest in your employees. Consider how you might demonstrate your support for each employee to grow and develop in his or her career. You might, for example, give employees time during regular hours to attend continuing education classes, meet with a coach or participate in special projects that hone new skills. Also consider whether employees might benefit from resources, such as new technology, that help them advance. Investing in your employees communicates how much you value them and helps them remain creative and motivated.
- Be transparent. Celebrate successes, letting employees know the specific ways you’re grateful for their contributions to that success. Communicate challenges or disappointments, as well. Employees who are engaged in the company’s long-term mission want and deserve to know how the company is faring. Often, those employees can be further motivated to address challenges and help find solutions to problems.
High-performing employees are critical to small and mid-sized businesses’ success. Your budget may not support wages that are as high as you’d like, but you can keep your best and brightest employees motivated and committed by offering them meaningful work, a close community, a sense of ownership and your consistent thanks and praise.