Every business owner and manager knows that one of the keys to running a successful business is having engaged, motivated employees. While traditional thinking points to monetary incentives as the source of the highest satisfaction and loyalty, new studies have started to uncover more intrinsic motivational factors. Some managers believe the sole use of money as a motivator can actually be harmful. A recent study by Gallup states that 42 percent of the global workforce is disengaged at work, while 90 percent of managers believe that employee engagement is essential to their businesses. This lack of engagement costs companies more than you may think. According to Gallup:
- Disengaged employees cost businesses in the US $350 billion last year.
- Companies in the top 10 percent of engagement surpassed their competition by 72 percent in earnings per share.
- Engaged employees are 50 percent more productive than unengaged employees.
These statistics help reinforce the necessity of motivating employees and keeping them engaged in their work. While money can still be a strong motivator, it should be paired with other efforts to achieve maximum effectiveness. A study by McKinsey Quarterly showed that praise and commendation from a manager was effective with the highest percentage of respondents (67 percent). This is interesting because it is a motivational factor that costs the company nothing, but can greatly increase productivity. Attention from company leadership (63 percent) and opportunity to lead projects (62 percent) also ranked higher than any financial incentives.
While it’s not recommended to dismiss the importance of financial incentives — people do want to feel their work has monetary value — incorporating more intrinsic rewards into your company’s motivational strategy could be very beneficial. Here are a few ways to begin implementing such a strategy:
- Publicly praise your employees. If someone has record-breaking sales, let the office know about it. It is equally beneficial to reprimand privately. Publicly embarrassing an employee can have strong negative effects on the morale and motivation of everyone in the group.
- Get to know your employees. Engage with them and learn about their lives, families, and interests. These relationships will help build a sense of community and camaraderie around the office.
- Say “thank you” every day. Let your employees know you appreciate their work.
- Be a coach, and help employees develop and grow. Employees want to get better at what they do, and managers can be the coaches who help them do so.
These are behavioral changes that come naturally to some managers, while others have to work diligently to keep their employees engaged. The key is simply making the effort. Managers who put time and effort into connecting with their employees will reap the benefits.