How to Keep Your Employees Motivated and Why It Matters So Much
Posted on 1st September 2022
When considering financing for your small business, you may be unsure about the benefits of using a business credit card over a personal one. Research by the U.S. Small Business Administration shows that almost twice as many small business owners opt for a personal credit card over a business one.
Business credit cards often involve a much higher fee which may be off-putting to those on a budget but when used carefully, you can reap the rewards. Let’s take a look at the differences between business and personal credit cards so that you can make the right decision for your small business.
Why Motivation Matters
Employee motivation has a direct impact on the financial health of your business. A study by the Harvard Business Review (HBR) found that improving employee motivation can increase gross revenue by up to 47%.
On top of this, motivated employees are more likely to stay loyal to your company rather than seeking roles elsewhere. The HBR has also reported that a 5% increase in employee retention can boost profitability by 25-85%.
Meanwhile, the International Journal of Core Engineering and Management published a paper that found that employee motivation directly improves customer experience.
What Employees Value
So we've established that employee motivation is a key component of a successful business, but how do you actually go about it?
It's important to understand what your employees value so that you can use these factors to motivate them.
Of course, salary is important but there are many other factors that come into play in terms of employee satisfaction. In fact, the HBR found that salary was surprisingly far down the average list of priorities, which are as follows:
Role design - duties, responsibilities, goals, principles and objectives. Employees want to feel that their work matters and contributes to a greater good.
Organisational identity - company culture, values and ethics should align with the employee's personal beliefs.
Career development - employees want to keep learning new skills and progress in their career.
Relationships with colleagues - positive relationships within teams are a key motivator for many workers. A strong team dynamic can help employers retain staff as well as improve productivity and innovation.
Leadership - employees want and value clear, consistent leadership.
Compensation - salary and benefits are still important, but employees are increasingly looking for flexible working arrangements, social responsibility programmes and other benefits that go beyond just a pay cheque.
Feedback, evaluation and opportunities to improve - employees want to receive feedback on a regular basis so that they can understand how they're doing and what areas to focus on.
How To Motivate Employees
Now that you understand what your employees value, it's time to use these factors as the foundation of your motivation strategy.
A good starting point is with communication - keeping staff informed about company happenings, sharing goals and objectives, and giving regular feedback will help employees feel more connected to their work. Remember that no-one wants to feel as though they're stuck in a dead-end job or doing meaningless work.
It's also important to create a positive workplace culture where employees feel comfortable taking risks and voicing new ideas. This can be done through team-building exercises, offering training and development opportunities, and celebrating successes together.
Leadership is another key factor - employees need to feel that their leaders are competent and trustworthy. Leaders should be setting an example for the team, modelling desired behaviours and providing clear instructions.
Last but not least, it's important to recognise and appreciate employees' efforts. A simple 'thank you' can go a long way. However, internal awards and tokens of recognition are even more effective in motivating staff.
Final Thoughts
Employee motivation is a key component of any successful business. By understanding what employees value and using these factors to motivate them, you can create a positive work environment that encourages productivity and innovation. Increasing staff morale plays a powerful role in building a strong, profitable and innovative business so it's well worth investing your time and energy into.
Written by:
Nicola J Sorrell - Effective Accounting
Founder | Xero Champion | IR35 Expert
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