by Steve Marr
How to motivate employees for peak performance is one of the most important-and often elusive aspects of managing a business. It may spell the difference between staff loyalty and a high turnover rate, enthusiastic or lukewarm customer service, and, ultimately, the success or failure of your business. The most effective motivational tools will correspond to a natural drive within your employees-either monetary or non-monetary-and will generally fall into one of three categories: salary or bonus, fringe benefits, and non-monetary compensation. As King Solomon aptly observed, "A worker's appetite works for him, for his hunger urges him on" (Proverbs 16:26 NASB). The key is to understand the hunger that every worker has and apply the proper motivation to create an effective workforce.
Salary is the most-often utilized and least effective form of motivation. Even paying above-market rates does not guarantee success. Your workforce may not turn over as often, but people eventually get used to their normal paycheck and morale will suffer if money is the only form of motivation. That doesn't mean you can afford not to pay competitively, of course. If salaries are significantly below market, employees will quickly move to greener pastures. Workers are less likely to leave if your pay scale is within 15 percent of the prevailing rate.
In contrast to the diminishing returns of a salary-based motivational plan, paying an employee bonus can be an excellent way to keep your staff motivated and increase the compensation level of key employees. Successful bonus programs usually contain three essential elements. First, bonuses are weighted toward high-impact employees, those who have the position and ability too positively influence your business. Second, a bonus should be tied to specific goals that a person accomplishes; and, third, the worker must clearly understand the relationship between the results achieved and the bonus paid.
Fringe benefits are an expensive way to motivate employees-and the results are often mixed. Benefits can cost as much as 30 percent to 50 percent of employee payroll, but if the benefits offered fail to strike a chord with your staff, you will have merely increased your costs without any motivational payoff. No organization can afford to offer every benefit to every employee. Most workers expect reasonable health care, vacation days, and some retirement benefits, but the key to success is to understand your employees and offer those benefits that have the highest perceived value. For example, younger workers may value time off and prefer a generous educational benefit, whereas middle-aged workers might place a higher value on a good retirement plan.
Non-monetary motivators are usually an outgrowth of a company's culture or climate. Your management style will go a long way toward creating a positive company atmosphere that will motivate your staff. First, be clear with your communication, because "through presumption comes nothing but strife" (Proverbs 13:10 NASB). Clear expectations and thorough communication (keeping everyone "in the loop") is essential for long-term success. Employees cannot be expected to hit a moving target. When a company's goals are clearly established, and the tools to achieve those goals are readily provided, morale naturally increases. Conversely, expecting employees to work in a fog of changing expectations is a guaranteed morale killer. As far as possible within each job classification, endeavor to offer work that is challenging, and encourage your employees to grow in their jobs. Ambitious people love challenges and they will aspire to excel.
Next, provide regular and consistent feedback, and be liberal with praise. Never be disingenuous, but strive to accentuate the positive. Listen to new ideas, and be open and honest with your communication. Show respect for each person; let them know how valuable their work is to the success of the company. Above all, listen, and listen well.
Finally, personal credibility is the most crucial element of long-term motivation. Solomon said, "It is better that you should not vow than that you should vow and not pay" (Ecclesiastes 5:5 NASB). Respond to every request, return every phone call, and only promise what you can deliver. Maintaining your personal integrity will keep your credibility intact and your employees' morale high.
Steve Marr is a business/ministry consultant and author of the book Business Proverbs. His daily Radio feature, "Business Proverbs is heard on 1,000 radio stations. He is the former CEO of the fourth largest import-export firm in the United States. Web: www.businessproverbs.org