By Allen Harris
I don’t remember who gave me this sage piece of wisdom, but I was once told that you can’t motivate certain employees with money. If you hire A-level players, they will always be a return on investment. Those people aren’t motivated by money; yes, you need to pay them enough so that salary isn’t a point of contention, but mostly you just give them the tools they need to succeed.
When it comes to motivating employees, that strategy worked out well for Liam, the owner of an aerospace tooling company in northwestern Connecticut. However, with more than 100 employees, and a lot of them hired in the last few years, when the supply of skilled labor has been short, Liam has found that he’s had to recruit B-level, even C-level people in order to increase capacity and fill demand, especially for the company’s new electric-resistant plastic product that has high-impact strength at extreme temperatures.
Regional and national business surveys find that one of the top challenges for companies is finding “qualified employees.” The term “qualified employees” mostly refers to prospective hires who have the requisite skill set and experience. However, there is always that immeasurable intangible, which is passion for the job. These are the people who solve problems before you realize them, who want to go to that conference in Dayton because the one in Vegas has a weaker agenda, and who require little oversight.
Then there are the other employees. They’re not bad people, but they do only precisely what you ask them to do because instead of being excited about finding a better way, they fear the blowback of failure. Which, I get, but the point is that they play it safe in such a way that if anything goes wrong, they can fall back on blaming you for doing what you said, instead of being flexible in their decision-making.
Money is a carrot
Nonetheless, they want to advance in the company, and expect they deserve it out of tenure. They’re the ones who, instead of embracing new best practices that ultimately make them better, they gripe about the disruption, the change.
I could go on, but you get it. For those people, money is a carrot. There are more options beyond financial incentives, but money does tend to work those lower-level employees.
According to “The Effects of Incentives on Workplace Performance,” which reviewed about 600 studies, you can motivate employees if you incentivize them properly. The paper found that “the overall average effect of all incentive programs in all work settings and on all work tasks was a 22% gain in performance.”
A quick note: If you’re going to go with a form of financial reward, cold, hard cash resulted in higher performance than other nonmonetary, tangible incentives, such as gifts or vacation packages. If you want to skip this column and find a quick fix, I’ll understand. Just tell your employees you’ll give them X dollars if they accomplish A, B, and C.
I’m all for financial incentives — they work. Just be careful. One problem with financial rewards is setting up the wrong metrics. People chase the metric even if the path of their chase may not be in line with the spirit of your stated intention.
Most interesting to me is that long-term programs that create corporate culture led to greater performance gains than shorter programs. The challenge owners and managers have is that they don’t know how to properly motivate uninspired employees beyond writing a check.
The solution — to oversimplify it — is to figure out the reason for an employee’s lack of motivation and then apply a targeted strategy. If you believe the problem for one employee is that they’re simply not working hard enough, and you create a motivation strategy to get them going, it may backfire if the problem isn’t laziness but a lack of the right tools to get the job done. Or they’re bottlenecked as they wait on another department. Or maybe they’re lacking self-confidence and are afraid of getting fired if they get something wrong, so they are overly deliberate.
Or maybe, as Liam found, some just don’t care about their job. They don’t care about the company’s vision. They don’t particularly care about the customers. Some don’t even appreciate the company for giving them a job; they feel entitled as opposed to grateful.
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Talk about specific values
Clearly, these people require a long fix, not just a short fix. As you can probably empathize with, it’s been hard for Liam to find qualified workers — workers who not only have the requisite skills and experience, but those who share his vision. If you can’t hire people who want to help you fulfill your vision, you can talk to your people about their specific values.
Liam had made the mistake of thinking that what motivates him would motivate his people. It’s important to engage in probing conversation with your employees to learn about what they care about, then tie those values to their roles and responsibilities.
If your employee doesn’t value the task he is charged with, he’ll be unmotivated. You may have to appeal to multiple values, such as their personal or professional growth, or their social currency among workmates. A lack of direction will sap motivation, and your people will walk away from challenges. Conversely, having purpose provides potential for inspiration. Purpose is the key to motivation.
Liam found that a lot of his assembly line employees felt like an unneeded cog in the wheel. Workers had to perform one task, push it to quality control, then move the piece to the next step of the assembly line. Workers felt disconnected from the other people working on the same product, they felt micromanaged and removed from the final product. Employees need to feel as if their tasks have utility, that what they are doing is part of something bigger.
Liam was able to communicate the need for quality control at every step; a conversation helped people feel less like Big Brother was looking over their shoulders. Then Liam hit it out of the park. He gathered everyone who worked at different stages of the assembly line together and constructed a product so that they could see how each of their tasks worked with the others. Then he showed where on the aircraft their finished product is found and explained its importance.
Lastly, he had team members rotate to different tasks, which not only made them feel more connected to the work being done, but increased socializing among employees by way of increased water cooler chatter. Sometimes, admittedly, it was commiserating. But it was bonding. They felt like more of a team, and when you are part of a team, you feel more motivated. Your employees need to understand how they fit into the company’s purpose to feel valued. It’s hard for people to come to work every day, to further your business, if they don’t know how their jobs help people.
Moving back up the corporate ladder, Liam used a different tactic. In order to fulfill his company’s vision, Liam had ambitious — even aggressive — goals. He found that his managers were better motivated when the goals were smaller — still ambitious, but more achievable.
Liam had the bad habit of setting the bar so high that mangers went into projects knowing they couldn’t be done. Liam was hoping that by overshooting on the goal, he’d be able to squeeze out every ounce of productivity from his group, but it backfired. His managers weren’t motivated to overshoot; they felt discouraged because they knew they’d fail.
Working on what they knew would be a failed project drained their morale. The solution was for Liam to stop solely setting the goals, and instead to collaborate with his team to determine what they should be able to accomplish. Even when they know it’ll be hard, your people will be more diligent about trying to accomplish a goal when they know there is a chance to succeed.
This worked on many levels. First, now management felt as if they had buy-in. They were part of the decision-making process, their input felt valued. When you work on something you decided was a good idea, as opposed to being told what to do, you’re more motivated. It’s ironic, but you’ll get more out of your team, especially in the long run, if you demand less out of them. And if you want this to continue into the long run, you can do what Liam did and not just let his management help set the goals but be supportive by giving them every tool possible to achieve success.
That includes continuing education, hiring or assigning support staff, and regularly checking in to ask the question: “What can I do to help you?” That’s a powerful question to ask your employees.
Allen Harris, the author of “Build It, Sell It, Profit — Taking Care of Business Today to Get Top Dollar When You Retire,” is a certified business valuation specialist, certified value growth adviser, and certified exit planning adviser for business owners. He is the owner Berkshire Money Management in Dalton, managing investments of more than $500 million. Allen’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Allen at AHarris@BerkshireMM.com.
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