Motivating Employees Is Your Key to Success

To motivate employees, or not to motivate them? That is the question, which perhaps is not so silly in an economy still saddled with high unemployment. In normal times, this is a no-brainer.  Of course it’s important to provide incentives to employees. Done correctly, it helps retain top performers and encourages average workers to reach new heights, making a business more profitable and efficient.

Unfortunately, since 2008, we’re all operating in a “new normal,” which has given some business owners a reason to believe that “just having a job” should be incentive enough for their staff. Especially now, as the economy has shown some signs of life, this would be a big mistake—even if you own that rare company where every employee is self motivated, works their hardest without encouragement, and is totally loyal.

Odds are that over the last several years, raises have been kept to a minimum, and staff have been asked to work harder than usual to make up for personnel cuts. It wouldn’t be a surprise if you found top employees starting to reduce productivity and be less driven.

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Employee Incentives

Motivation and incentives can range from awards and prizes for high customer service awards to commissions for your sales force. What motivates workers? Appreciation, recognition, acknowledgement, and money. The best incentive program usually includes a little bit of all four, and makes them feel like they have a vested interest in the company and will benefit from its success.

What’s important for a business owner is that incentives are tied to key company goals. They vary from business to business but can include sales, customer satisfaction, production efficiencies and volume, among others. These goals and the incentives tied to reaching them, can and should be set for individuals, departments and firm-wide if possible.

Incentives shouldn’t be offered in an all or nothing format, but rather should be created so employees can reach them in stages, where different levels of incentives are reached and rewarded at each level. And make sure that the goals/incentives are achievable. If they are not, you’ll be creating a de-motivational program.

On the flip side, the performance levels for rewards should not be marginal or average. You’re setting up your business for failure when you reward mediocrity. And the goals set should be vital to a company’s success. Some businesses reward employees for not taking any sick or personal days in a given year, with which I disagree for multiple reasons, including the cost of infecting the workplace. Aside from employees coming in sick to achieve this perfect attendance, it rewards staff for merely showing up.

Sales-Based Commission

A common incentive, especially within sales forces, is a commission-based salary. There are many theories about how compensation should be structured for salespeople, including salaries that are fully based on sales commissions. For clients looking to implement a commission program, I recommend that they pay employees a base salary large enough to cover basic bills, with commissions on top. An employee worried about paying basic bills is a distracted and unproductive employee. A business owner will be less likely to lose a good salesperson with a good base salary during economic slumps, when customers cut spending. These salespeople will still be motivated by wanting to improve their lifestyle.  

And it doesn’t have to be only salespeople who have the base + commission compensation structure. Non-sales employees may not be able to earn sales commissions, but salaries can be augmented with plenty of bonus-laden incentives. If an employee has measurable goals, bonuses can be determined based on reaching those goals. 

Whatever motivational program is decided upon, business owners need to understand its importance, how it can improve their business no matter what condition the economy is in, and communicate the program clearly to their employees.