What Keeps Them Motivated? What Makes Them Stay?
Robin Johnstone Consulting
Nine out of ten employers think that a good salary, regular raises and bonuses are what guarantee their employees’ enthusiastic productivity, and keep them showing up in the morning.
A management consultant friend of mine is currently working with a company whose owner long ago subscribed to just that policy: hefty annual salary increases. And so this employer just kept giving his employees oversized raises each year to ensure their continued loyalty. When my friend started consulting with this company just over a year ago, some of the Accounts Payable clerks and delivery people were making over $100,000/yr. in base salary (no kidding!).
Guess what? Despite those enormous salaries, morale in this company is not very good. Not to mention that now that profits have gotten slimmer and slimmer, the owner has to reduce overhead. He’s in a heck of a dilemma: how does he cut his company’s costs without cutting the very salaries he thinks motivates his employees and keeps them loyal? (This is one consulting job I’m glad my friend got instead of me. But then, I don’t take clients in the Pacific Northwest.).
One part of this strategy’s problem is obvious here, isn’t it? There’s a ceiling to using wage increases to motivate employees; it’s called overhead.
The other half of the problem? Giving employees more money actually doesn’t work very well -- as is evident from the example above.
In employee survey after employee survey, of the top three motivators of employees, salary, raises and bonuses comes in third. Dead last. Yet nine out of ten employers continue to believe that money is the secret to motivating their employees and ensuring employee retention.*
So if it’s not more money, what is the secret, then? What is it that keeps employees loyal and productive? According to the U.S. Department of Labor, the number one reason employees leave organizations is they “don’t feel appreciated.”
“Appreciation.” “Recognition.” “Acknowledgment.” Why is it so counter-intuitive that these three factors (they’re the same thing, actually) are the real glue that holds an organization together and makes it out-perform its competitors? Why is it that business owners just don’t “get it?”
Whatever the reason, the good news is that employee recognition and acknowledgment is the most powerful tool an employer can use to make a difference in employee motivation and retention. Once an employee has a living wage that covers his or her basic needs, acknowledging and recognizing an employee is more motivating than giving them a raise.
Now, is that good news, or what?
More good news for business owners: Unlike increasing salary and using bonuses, there’s no ceiling to using recognition and appreciation as motivators. It costs you nothing, and you can go on giving them forever, with only positive effects on your bottom line.
How do you do that? Whom do you acknowledge and how? When? And for what? How do you do it without seeming to play favorites?
Aha! That’s the subject of another article to come. Keep checking back.
*Much of the material in this article is drawn from “The Carrot Principle”: Gostic, Adrian R. & Elton, Chester; Free Press, 2007
Robin Johnstone Consulting, LLC
Offices in Albuquerque and Santa Fe