If you are a company owner, there will almost certainly be a conflict between what the company means to you and what it means to your staff.
Say you founded the company, and expended a great deal of time, money and effort in making it successful over many months or years. Your livelihood, and that of your family, may be directly linked to the company’s performance – if financial performance is poor, even briefly, you may need to reduce the salary you pay yourself, or cut your dividend payment. If the company goes under, severe hardship might follow for you and your loved ones.
In the eyes of your employees, you might be little more than a source of income in order to pay their bills. They can work their contracted hours and then go home, not needing to think about work until the following morning. A short-term fall in company profits will not affect their salary.
If employees are meeting the minimum requirements of the job, you cannot justify disciplinary action against them. If redundancies are not being considered, your staff may start to ‘coast’, whereas you might want them to give more, as well as feeling that they are capable of more.
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Here we look at ways you might be able to motivate your staff.
Increase basic salary
This is perhaps the oldest and best known motivational tool in the book. It may make the employee feel better towards the company, and improve performance as a result. However, aside from the fundamental issue of whether you can afford the increase, you need to think carefully before taking this step. How might an individual employee respond to a pay rise? For some, it could mean that they coast even more – see above. They may regard the rise as an endorsement of the way they are doing their job. It may even reduce their motivation, in that now they are better rewarded, there is little incentive to try and secure an internal promotion. On the flip side, of course, it might give them a much needed ‘shot in the arm’ and encourage them to be more productive.
This approach is usually adopted for salespeople and other staff who can have a direct impact on revenue and profits. Some companies make much more use of performance-related-pay (PRP) than others.
Systems of PRP can include commission payments for sales made and bonus payments for achieving performance targets, which can be related to sales volume and/or quality standards.
The idea behind PRP is that people will want to achieve more in order to be better remunerated. However, extreme care needs to be taken with such a system.
Firstly, you need the systems in place to make accurate and fair measures of employee performance. Measuring the volume or value of sales made could be relatively easy, but judging whether quality standards have been met could be much more subjective. As well as having to devise a reliable way of measuring performance standards, there is also the issue of using up valuable time and resources if supervisors or others need to carry out an in-depth analysis of individual employees’ performance.
Secondly, dissatisfaction can arise amongst staff who are not doing well under the PRP system. They may decide, rightly or wrongly, that the methods used to measure performance are not accurate or not fair.
PRP can also widen the gap in remuneration levels between the top and the bottom of the company. If bonuses are calculated as a percentage of basic salary, then the inducement payments in purely monetary terms will be higher for better paid staff. Sometimes, people in senior roles receive significantly higher bonuses when calculated as a percentage of salary, which could have a further adverse affect on the morale of the lowest paid.
You may decide to operate an awards scheme and allow managers of business departments to nominate deserving candidates from amongst their staff. The scheme might involve cash paymentsfor certain achievements.
Incentive schemes might also operate on a less formal basis, perhaps where an employee is given a gift for completing a one-off task successfully or hitting specific targets.
Incentive schemes may not require the same detailed analysis of performance that PRP necessitates, but the potential for resentment amongst your staff still exists. Some might feel their achievements are not being recognised, whilst equivalent or even lesser achievements from colleagues are rewarded instead.
Job enlargement is best described as widening the scope of an employee’s role. One method of doing this is to add to their job description tasks related to those they already undertake. The employee may welcome this if they like the added variety and the added responsibility that comes with it. It can make the employee feel they are making progress within the company, and that their contribution is valued. This can be especially important if promotion opportunities are limited. However, be wary of an employee ending up with an increased workload for no extra reward, which they may not welcome; or giving them additional tasks and responsibilities that they may not relish.
An employee may sometimes feel they have to do all the work but have no influence, while their boss takes the reflected glory. Consider what responsibilities you can delegate – obviously this will require you to assess the skills, experience and abilities of your staff to determine what they are capable of.
De-motivation can result if employees don’t know what’s happening in the company as a whole. Some information undoubtedly needs to remain confidential, but if you have new initiatives, good financial results or other achievements to report, why not share them with your staff, perhaps via a company announcement or newsletter? Also consider what you can do to gauge opinion amongst your staff, e.g. via an anonymous suggestion box.
Also try and inform your staff of the contribution they make to the organisation’s overall success. This is particularly important for junior staff in large companies, where they may feel especially insignificant.
These events can boost morale, and make people look forward to going into the office on the next business day, even if it is just to reminisce about the evening with colleagues. But take care not to create an atmosphere where attendance is practically viewed as mandatory – whatever it involves; an individual event will not suit all tastes.
Whether these involve work-related tasks or leisure activities or a combination of the two, many companies see them as useful ways of improving workplace performance. The idea is that if employees work together on tasks on away days, their cohesion when working together in the workplace will improve. Some employees will undoubtedly enjoy this type of team bonding event, but think carefully before announcing something like this. If employees are asked to undertake physical activities for which they have no aptitude, e.g. the traditional company ‘outward bound’ day, it might end up having a reverse effect.