In order to get results and motivate employees to help you grow your small business, you need to set some goals for yourself first.
You first need to determine which direction you want your small business to go, how you are going to measure your progress as you move towards that direction, how you will reward you employees and what training you can provide them. Without a clear direction for your small business, you won’t know which way to move and if you can’t communicate that direction to your employees, they won’t know which direction to move either. While most employees should be motivated enough by their paychecks to produce results, tying rewards into performance goals can act as a force multiplier for productivity.
And last, if you want your employees to commit to your business, and its goals, then you need to commit to them and their development by offering training and valuable experiences. This article will show you exactly how to measure your company’s successes, set up employee rewards and offer training as a job benefit so that you can get results and motivate your employees.
What gets measured in a results driven work culture?
In business, results and progress are measured by KPIs (Key Performance Indicators). When “managing by objectives,” KPIs are used to measure your progress towards your objectives. These KPIs are be broken into three categories to measure success. They can measure:
- The amount of progress achieved towards completion of a goal. For example, complete 10% of the new website by the end of the month.
- An increase in the number of a target goal. For example, get 20 sales by the end of the quarter.
- An increase in the percentage of a target goal. For example, increase sales by 10% for the year.
Setting, communicating and evaluating KPIs is an integral part of keeping employees motivated and achieving goals. In order to get the most out of your employees, you need to make your employees aware of your KPIs and sync them to a rewards program.
When to Reward and Recognize Employees
Your employee reward and recognition schedule should coincide with the schedule of your goals. As with any goal setting strategy, employee rewards should be broken into minor goals that ultimately lead towards a larger goal. Setting only one, yearly goal that is rewarded can be a bit difficult to stay focused on. Smaller, more frequent goals can help keep employees motivated, but they may not be large enough to seem impactful. That is why combining short and long term goals is the most successful strategy.
The best way to start envisioning your employee reward strategy is by thinking about the larger goal. Perhaps you want to increase your overall sales by 20% for the year. This is a solid goal to set because it is measurable, most likely attainable, and it has a timeframe. From here, you want to break this goal into smaller, more attainable goals.
If you make 100 sales a year, and you want to increase the sales to 120 a year, then you would want to determine what the frequency of your smaller goals should be. This comes down to how frequently you can collect data on sales. If a monthly report can show new sales data, then it would be a good idea to make the smaller goal frequency be set to one month. If sales data is only available every three months, then you’ll want to have three months be the frequency for your smaller goal.
It’s important to note that having the goals set too frequently can demotivate employees. If there is a weekly reward for sales, then it becomes too common for employees and they will likely not take it seriously enough.
So, let’s assume that you are going to assess your sales goal every month. To hit your goal of 120 sales in the year, you’ll need 10 sales a month (assuming sales occur evenly throughout the year). Now you need to determine the best way to motivate your employees.
Here are few variables that you would want to consider when rewarding your employees for goals:
- Should you reward the employee who performs the best? This may seem like an obvious choice, but it could work against you. This is the most competitive form of rewards systems. In a highly competitive workforce, where turnover is expected, this could work.
The downside though is if the month is closing and the lead seller has 6 sales and the second place seller has only 4, the second place seller won’t have much motivation get in the 5th sale if he knows he’s already lost the competition. Also, the employee with 6 sales may hold off on impending sales until next month because he knows he’s already going to win for the month. An alternative to this would be to have first, second and third place awards.
- Should you reward employees based on a sliding rewards system? This would mean that employees get a reward based simply on how much they sell. For example, say each employee gets a small commission on each sale. The employee who has 6 sales will automatically get more than the employee who makes 4. The employee who makes 4 sales will still get an adequate reward and be encouraged to sell.
This is helpful because less experienced employees will still see the rewards of their efforts. No one is in direct competition with anyone else and could even foster a community where more seasoned employees are happy to help beginners. The only downside to this is that it’s not competitive. Some employees may be content to make 2 sales because that’s all that they feel they need.
- Should you set a goal and only reward those who achieve it? This would mean that you set a goal, perhaps 4 sales, and only the employees who achieve this goal will be rewarded. This will help keep all employees focused on the goal. It should also make the goal attainable for all employees.
The downside to this is that employees may hold back once they have hit the target number of goals. Also, if there are a limited number of leads, employees may team up to keep another employee from getting access to leads.
These are just a few examples of reward strategies for employees. It’s important to remember that any reward strategy will create a sense of competition among employees. This competition should lead to greater results and productivity, but as a business owner, it’s up to you to ensure that it doesn’t have negative impacts on operations and employees.
Team versus Individual Rewards Systems
It may also be useful to consider rewarding employee teams versus individuals. That shouldn’t be too difficult given all of the choices available. Of course your budget is an important factor. It’s also important to consider the trade-offs between individual and group awards. If you can’t afford to give out company stock, programs that reward groups are probably the only way to encourage employees to “think like an owner.” On the other hand, experts say that employees tend to respond better to individual incentives.
How to Keep Employees Motivated with Rewards
Keeping employees motivated requires a system that incorporates incentive rewards and recognition for achievement, as well as leadership attitude set forth by you, the owner, that trickles down to managers and employees. Rewards, recognition, and attitude are 100% necessary if you are to motivate your employees to pursue your company’s goals and objectives. When providing reward and incentive programs for employees, it’s just as important to remember that while the high performing employees should be rewarded, those who are regularly underperforming should be receiving coaching and mentoring. Here is a closer look at each of the categories needed to motivate your employees.
Creating a Reward Program for Employees
Employee reward programs can be scaled to fit any business size and job category. Here are a few great rewards you can offer to employees if you run a smaller business with a tighter budget and are not able to dish out large bonuses:
- An extra vacation day
- Work from home options
- Casual dress
- Gift cards
- Corporate swag such as T-shirts, hats, or even company products or services
- Privilege parking
Creating a Recognition Program for Employees
The most important part of an employee recognition program is to have it take place during company hours. Sometimes after work events can be more of a hassle than a pleasure – despite the occasion being a recognition celebration. That doesn’t mean, however, that you need to have a section of time set aside for the recognition. Some forms of recognition are as simple as sending out a company email, writing a note on letterhead and placing it on a message board, or hanging the employee’s picture under an Employee of the Month plaque.
It’s important to explain specifically why this employee received the award. This will help reinforce the culture that you are trying to create. Remember, the whole point of rewards and recognition is to encourage the type of employee behavior that will make your business successful. Have the reasons, and the wording, for the award reflect those that you have written in your company vision statement.
You can recognize employees who embody your desired work culture when they are out of work as well. For example, you may want to recognize an employee who volunteers regularly at a hospital. Or, you could recognize an employee who has just received an advanced degree.
How to Use Career Mapping in a Small Business to Motivate Employees
Small businesses can use career mapping strategies to motivate employees by offering training, diverse job duties, and work experiences that may not be available in larger companies. Most small businesses have a flat organizational structure which allows the opportunity for employees to step into different roles on the fly. Yet, a small company without much of a hierarchy will not have the departmental structure—with ascending job titles and different pay grades—that are the foundation of a corporate career path. The corporate hierarchy and pay grades can motivate employees to perform – knowing that there is always a next level to achieve in regards to position and pay grade.
So, how do you motivate employees when you don’t have a corporate style hierarchy and pay scale?
Employee Training as a Perk
The idea of training as a reward has recently been in discussion and it is kind of the worst idea ever. Employees shouldn’t be rewarded with training because they should have access to any training they could want and you can provide. Providing training as a perk is something slightly different, yet dramatically effective. By turning your business into a learning experience for your employees, you will most likely be able to increase your employee retention, performance, and skill level. You can do this by providing readily available training that employees can access on their downtime, during scheduled hours or as an event.
If you’re going to offer employee training, make sure it’s for something that the employee can use to further his or her own career. It sounds like doing this could lead employees away from you and into better opportunities, but it could actually help retain and motivate them.
Here’s an example of how you could use training as a perk:
Perhaps you run a coffee shop. Your baristas will need to be trained on how to use the cash register, clean the shop and of course, make coffee. Of these duties, the one they are most likely interested in is making coffee. While you should obviously train them on the register and on maintaining the shop, providing training on the latest trends in coffee brewing and serving would probably excite them the most and be the most rewarding.
You could get a subscription to coffee brewing magazines and have the magazines in the break room for employees to read, or better yet, give each employee his or her own subscription. You could take this one step further by hiring a professional, acclaimed barista to come to your shop once a month and show your baristas the latest trends and techniques. Your baristas who are serious about their skills will find this incredibly rewarding and view your business as a place to develop their skills and make themselves more valuable.
Experience as a Perk
You can also offer experience as a perk to your employees. For example, if you have a receptionist who has been with you for a year, works hard and is pretty smart, you could provide training for the receptionist to become a bookkeeper. Once the receptionist completes the training, you could then increase his or her pay and assign them bookkeeping responsibilities for your business.
As another example, we can look back to the baristas at the coffee shop. Perhaps one of your baristas who has been with you for some time is also in school for graphic design. You could have this barista do some work on your company website, make infographics or animations for your social media page, or design t-shirts or mugs to be sold in your store.
These experiences can be invaluable to some employees. Training opportunities will make your employees much more skilled and motivated. Additionally, these skills and experiences will help shape your employees as professionals and help increase their commitment to your operation.