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How to motivate employees and create a loyal workforce on a budget

October 15, 2015

A recent survey by the Institute of Leadership and Management (iLM) suggested more than a third of UK workers (37%) were hoping to leave their current job inside 12 months, and that a quarter of people planning to change jobs were doing so because they felt underappreciated by their current employer.

Other studies have shown that many UK employees feel undervalued at work and often it’s the small things that count. Last year recruitment website monster.co.uk found 58% of British workers don’t believe employees are thanked enough in the workplace, with 54% saying this left them feeling unappreciated and 41% feeling demotivated as a result.

So what can small business owners do to help ensure staff are motivated to do a good job and want to stay with you for the long-term?

Motivating and keeping your team together is vital

For any company, the motivation and retention of key talent is vital which means employees need to remain engaged and involved at all times.

For large companies this is often easier than for smaller ones as they have bigger budgets set aside for staff events, team building, dinners and even foreign trips to help boost morale.

For smaller and less well-funded employers this is often an indulgence they can ill afford, which can have a negative impact on staff motivation.

However every employer, even those with limited budgets must take on the challenge of motivating and retaining staff if they want a productive workforce and don’t want to waste time and energy on an endless recruitment drive.

The relationship between employer and employee has fundamentally changed

As the iML survey suggests, many people see the current, healthy jobs market as a time to look to greener pastures, which doesn’t help employers who badly need commitment and energy from their staff. It’s also a time when the age of the long-term career with one employer is at an end. People feel less loyalty to employers and employers in turn are showing less loyalty to employees.

This has changed the ‘unspoken contract’ that exists between the two parties. Employers have got to keep people motivated and give them a reason to stay with an organization in a way that they would not have had to do 20 to 30 years ago.

John Purcell, a visiting Professor at the University of Bath, suggests in a recent report on Workplace Trends 2015 (pdf) that one of the ways to increase productivity in the majority of UK workplace is through motivation. He says, “engaged, committed and motivated staff have better attendance records, are less likely to be looking for another job, and are more likely to help others, as well as be good advocates for the organisation”.

Many of the most sought after rewards cost nothing

Professor Purcell points out that the line manager is crucial in giving positive feedback for good performance and, where necessary, providing corrective advice. He rightly points out that these types of social rewards are often more important than financial incentives, and something companies with limited budgets can easily implement.

To achieve strong employee retention, the job must also be made interesting, satisfying and the future believable. Businesses need to set down goals for employee engagement, and examine the challengers they face, but a word of caution, realism is essential.

Managers also need to understand how motivated employees are and how this changes during the course of a year; not everyone can be motivated all of the time. Business owners should question whether all their employees buy into the company’s vision and its culture. How loyal are employees? If the answers are not encouraging then employee engagement processes need some attention.

For companies with modest resources this can be achieved through: mentoring and coaching; training on soft skills that develop people such as leadership skills; and working with people to give them a clear, personal development path, as this is more important than a career path for many. These things are far more valuable than pay rises; people stay in organisations because they feel good about themselves and feel cared for.

Reward people by helping them to develop

People investment is a reward in itself and organisations should consider doing the following:

  • Designing challenges and goals that will stretch them. If we cannot promote them, how can we give them more responsibility? Line managers often think that they have to give permanent responsibility. However, projects that can be given to people can be very motivating and develop skills.
  • Give constant feedback.
  • Linking long-term development to the short and long-term needs of the business. Make this connection visible and clear for all to understand. This is the best substitute for the career path.
  • Celebrating with spontaneous celebrations. These do not need to cost much and could be as simple as a cake for someone’s birthday, a few Friday afternoon drinks in the office or having a team lunch.

A priority is to share with employees what is being done to make the business move forward. Explain to them what they can do to be a part of that, making them involved in the growth mission.

This will motivate people and give them confidence because it gives them a role in securing their own future. Following that, the reward must be a promise to share in the success that can follow and the reward of being respected and developed.

5-Step Plan to motivating employees

To help you put some of these ideas into practice, here is a five-step action plan for motivating employees:

1. Research

Businesses should see their staff not just as a sounding board, but rather the lifeblood and true character reference of an organisation. It is easy to take for granted the views and feelings of employees; they are a crucial barometer.

Leaders need to find out what makes the team tick. You could use surveys (preferably anonymous) to establish what really motivates and de-motivates staff; and what employee benefits matter most to them.

At Spring Partnerships we use a variety of attitude surveys that are tailored to extract the truth. Once the true feelings are extracted they must be acted upon, to ignore the outcomes of a survey is to not only miss an opportunity to improve motivation and performance but also a slight on the participants. They would be quite right to say ‘what was the point?’

2. Distinguish morale from motivation

Good leaders are quick to separate the concept of “morale”, which is how employees are feeling, from “motivation”, which is the ability to turn talent into productivity.

Even employees who have low morale can remain highly productive and engaged. This is an important principle. Sustainable performance comes from high morale as well as motivation. Without high morale, strong motivation will be difficult to achieve.

3. Be positive

This may sound like an American preach but business leaders need to recognise that they can’t always motivate all the people. But they can create an environment, a culture in which their employees feel inspired and confident that they can be of their best. A positive culture breeds on itself and can be, to a large degree, self sustaining.

Leaders need to focus on what is working well in the organisation, managers need to give regular positive feedback to employees, put success stories as the first agenda item in all meetings and shift from discussing problems to exploring solutions and creating initiatives. Never permit problems to be discussed without possible solutions. This is an important habit to adopt.

4. Team building events

A dedicated conference or event can work wonders in terms of motivating employees, solving specific business issues and boosting morale. Don’t just talk to people; involve them in ideas and activities.

However, events can be expensive, so businesses need to be clear about their objectives and make sure the format of the event will deliver their goals. Above all, ensure that any event truly involves everyone. Lip service to this will be counterproductive.

Often the best team building is setting people to work on well-structured business planning activities. Many excellent templates for this type of teamwork exist and they are very low cost. For ideas on how to motivate employees, read;

5. Set up a reward and recognition programme

Another way of motivating staff throughout the year is to implement a well-planned staff rewards programme. You can find out more about rewarding your team in these guides;

This can be very positive and profitable. But research is essential and companies should make sure the correct rewards are being offered – financial remuneration is not always the answer. Indeed, in most cases it is recognition that people respond to rather than reward.

Recognition based on the views of fellow employees is often seen as the most valid method, it is seen as fairer and if endorsed by the leadership team is a way to get the balance between democracy and senior level appreciation right.

About the author

This guide has been written for ByteStart by Stephen Archer, Director of UK business and leadership consultancy, Spring Partnerships and an economic and business analyst.

More help on motivating and managing staff

For more tips and ideas on how to get the best out of your staff, read these guides;

And for guidance on employment issues, try some of ByteStart’s other guides;