Personnel Motivation: How to Create and Enhance

To attract and retain smart people in the workplace, you have to make sure they can communicate with other smart people.

Bill Gates, cofounder of Microsoft.

Many factors motivate people at work: self-actualization, professional growth, career advancement, income and even fear of failure. Whatever a person’s motivations are, it is much easier to manage a team that is focused on results. The task of the manager is to find positive motivation levers that will work long and effectively.

What is motivation: what is it and what is it for

The motivation system is a set of incentives that determine a person’s behavior. Each manager himself determines this set.

Motivation is always in sync with the corporate culture, company values, goals and vision. And it also helps to attract new talented employees who fit the personality traits.

For the motivation system to be effective, it must be:

• Objective: the amount of remuneration depends on the results of work.
• Predictable: employees must understand what bonus they will receive when they meet their goals.
• Adequate: remuneration must be commensurate with the experience and qualifications of the employee, with his contribution to the result.
• Meaningful: motivation must be attractive to employees.
• Fair: the team must understand how the motivation system works, and agree with its fairness.

Why do we need a motivation system?

1. Changes a negative attitude into a positive one. Without motivation, employees do the mandatory minimum. They do not use all possible resources of the company and their own to achieve results.
2. Increases productivity. Motivation bridges the gap between desire and ability to work. Employees work to the best of their ability and engage all means toward the goal.
3. Helps achieve organizational goals. The goals voiced by the owner will only be achieved if the employees are interested in realizing them. Therefore, it is important to communicate with the team and make the goals of the company and employees resonate.
4. Improves the moral climate in the team. A good manager-subordinate relationship is only possible with the right motivation. Recognition, respect, the importance of contribution to the development of the company – it gives a sense of cooperation instead of a sense of subordination.
5. Helps to introduce changes faster. Demotivated people do not want to get used to innovations, because they are “fine as they are”. But without change, the company will lose the competitive battle. (We spoke in detail about the competitive strategy in the article).
6. Reducing employee turnover. There is always an alternative to where to go to work. At the same time, an increase in income is far from being at the top of the list of reasons to change jobs. Satisfied employees do not leave their current company.
7. Frees the owner from operational tasks. A motivated team does not need to be constantly monitored and reminded of their responsibilities and tasks. Then the owner has time to deal with strategic issues.

Types of motivation

All motivation tools are divided into 2 groups: tangible and intangible.

American corporations have set a trend for the “Pay for Performance” system. This means that any ways are used to pay employees, whereby remuneration depends on group and individual differences in their performance. A typical PFP program increases an organization’s productivity by 5-49% and employee earnings by 3-29%.

PFP programs use flexible compensation schemes: commissions, cash payments, individual rewards, profit-sharing systems, stock and options.

The most common non-financial rewards are: schedule-related benefits, material non-financial (gifts, health insurance, discounts on company products, compensation for housing/gym/language courses/external professional development courses, etc.), corporate events, recognition (verbal praise, compliments), employee status changes, workplace changes (separate office, personal assistant, additional office equipment, company car, etc.).

To stimulate creativity and promotion of new ideas, large corporations introduce systems of encouragement of enthusiasts, motivating for a creative approach to work and promotion of new ideas. This is how United Airlines, Dana, IBM, P&G work.

Material motivation

Motivation of personnel: how to create and enhance.

Everything is clear with the salary: you fix it and stably pay it (you increase it if necessary). But it is harder to define the variable part of the salary – it depends on the position, qualification, influence on the company’s income.

The variable part of the salary is determined with the help of 3 approaches:

1. Commission. The simplest and oldest scheme. The essence is that the employee receives a fixed percentage of the amount he brought to the company. The commission can be mixed with the salary or used as the whole salary.
2. Monetary payments for meeting goals. These are bonuses that an employee receives for meeting established criteria: economic and qualitative performance, evaluation by other employees, etc. Bonuses can be one-time or regular.
3. Individual rewards. The most subjective category. Such bonuses are paid for possession of certain skills, for loyalty to the company, “company stars”.

Besides direct monetary payments, financial motivation includes compensation for regular expenses of employees, trips abroad, additional days of paid vacations, pension benefits or a savings fund, perks (free medical care, school for the employee’s children, housing).

Some companies give employees a share of management or a share of profits to encourage their productivity.
An example of a financial incentive formula for an employee that does not directly affect the company’s income.

For example, a financier’s job is to file regular reports, make sure there are no accounts receivable and no fines from the tax office, etc. Then his salary consists of a rate and a performance bonus multiplied by the efficiency factor. At the same time, the bonuses are a fixed amount.

The efficiency coefficient varies from zero to one and is calculated as follows:

• You write the indicators in a table.
• For each indicator determine the weight (distribute 100% between the indicators in accordance with their importance).
• Fix the performance: 1 – if the indicator is met, 0 – if not.
• Summarize and multiply the weight with the implementation factor. If the weight is 30% and the feasibility is 1, then the total is 0.3.

Intangible motivation

Employee motivation: how to create and enhance

Non-monetary incentives resonate very much with a company’s corporate culture. They are:

1. Positive communication. Establish at the level of corporate values, that destructive behavior, gossip, conflicts, moving to the personalities is unacceptable in the company. Team events, meetings, joint lunches, etc. will help establish human communication.
2. Recognition. On the scale of a global goal, one employee’s contribution can be noticeable. And first and foremost for himself. Celebrate even small accomplishments.
3. Career Advancement. When opportunities for career advancement arise, employees improve their professional skills and performance. This is a powerful incentive to work at the highest level. In America a person already at work requires a plan for growth of salary and career for 4-5 years. We do not have this practice yet, but we can assume that soon this trend will come.
4. Advanced training and challenging assignments. Routine is tiring and demotivating. But complex and non-standard tasks allow you to unlock potential.
5. Right delegation. To delegate the task and not to give the right to make decisions is a way to failure. If you want the work to be done well, delegate it properly. But the responsibility and control of execution always remain with the manager.
6. Involvement in decision making. Ask for the team’s opinion, listen to it, and allow them to make adjustments to the company’s plans.

Take into account the specifics of the work and priorities of the employees for whom you are developing benefits. The incentive system may differ from department to department. For example, salespeople are achievers; they are result-oriented, so fuel them with ambitious goals.

Creatives are vulnerable and impressionable. If possible, give them a flexible schedule and don’t forget about recognition-they’ll appreciate it more than anyone else.

IT loves unusual tasks, challenges, and opportunities for self-realization and development.

Where to start if the company has no motivation system

Motivation of personnel: how to create and enhance.

All bicycles have already been invented before you. Don’t try to invent something unbelievable from scratch. It is enough to find a suitable variant from what is available.

• Step 1: Research the job market. Your future employees (and many current ones) regularly monitor job sites. They expect to get a compensation package as good as anyone else’s.
• Step 2. Study the fundamentalists of motivation: H. Heckhausen, B. Zeigarnik, K. Levin, J. Taylor.
• Step 3. Decide on the company’s strategy and understand the specifics of the industry. You need to know what kind of employees you will need, what is the state of the labor market, what motivates employees in your field.
• Step 4: Decide what your first priority is: to attract new employees or to motivate and retain existing employees.
• Step 5. ask the employees themselves what they would like to see as motivation.
• Step 6. Do the math:

1. Revenues, expenses, profits per employee
2. How much of the income is spent on motivation
3. How the effectiveness of new employees grows
4. How the life span of employees in the company is changing
5. Turnover
6. The cost of hiring 1 new employee

• Step 7. study, analyze and adopt the experience of foreign companies. Everything that is popular there will soon be popular here.

Personnel Motivation: Practices

We have already written that it is important to consider the labor market in order to develop effective motivation. But you can go further and look at trends in the country as a whole. IBM and AT&T have responded to the changing demographics of the country and created family programs. Since most of their employees are under 40, many have young children. So management has made it possible to work flexible hours, provided help in choosing babysitters, created corporate day-care centers and nurseries, and organized family holiday-corporate events.

The Walt Disney Co. came up with a creative way to recognize employees: on the main street of Disneyland Park, cafe windows are dedicated to the most valuable employees. And in the middle of the last century, Walt himself renamed the laundries “textile services.” That’s how non-prestigious work ceased to be and employee turnover decreased.

At Asana, food for employees was prepared by chefs. Not just any food, but food that fostered creativity, stimulated brain function, and eliminated sleepiness.

Steve Jobs used to hire employees as “geniuses.” Obviously, they had no problem with recognition.

Often leaders get too hung up on how to motivate the team. But it’s impossible to understand unless you know what motivates each person. Get to know your employees, talk to them, and be interested in more than just professional goals. Then the answer to the question “how?” will become obvious. And do not forget that there are no benefits that can make an employee work without intrinsic motivation. Aspirations can be strengthened, you can not let them decrease. But they cannot be created from scratch.