Money alone cannot motivate people

Monetary recognition is one way to reward people. But, simply saying thank you when an employee does a job well can be powerful. Instead of speaking to employees only to correct them, commend employees doing something right and praise them.

In general, people will work harder if they believe there are rewards for good results and penalties for poor ones. Compensation is perhaps the most frequently used motivator but when the employee receives the money, its power to motivate ends very quickly.

Money is important, but we all need more than just money alone. Otherwise we would all have done jobs that pay and only pay, but we all have our desires which we try to satisfy at a cost, to acquire and build self-recognition, thus a positive image as an esteemed need.

Let me give you a simple example. A labourer working for 25 days a month can at today's market rates earn Rs. 37,500 a month but don't we have a few lakhs of graduates who work for a monthly income of less than Rs. 30,000. This proves that there are few factors other than money that employees consider when choosing a job; organization stability and reputation, industry, product or service, position title, work culture, values and policies.

Limitations

Monetary recognition is one way to reward people. But, simply saying thank you when an employee does a job well can be powerful. Instead of speaking to employees only to correct them, commend employees doing something right and praise them. When you praise an employee, be specific about what you liked and link their behaviour to the goal.

A well-timed letter, certificate, recognition at a company meeting or even a sincere "job well done" will go a long way towards motivating employees. Carrots may be good, but to be most effective, there needs to be some stick as well.

Employees need to know that there are consequences associated with poor performance. While money can be an important way of letting workers know their worth to the company, it is not a sustaining motivational force for most people.

In other words, a salary increase and bonuses are necessary, but it seldom motivates people to do their best on the job on a sustainable basis. Daily excitement for people's work is influenced more by how they are treated in the workplace - that is, by the softer side of management more than by what they are paid.

Money also has limitations as a motivator because in organizations, performance reviews - and corresponding raises - occur only annually. To inspire employees, managers must recognize achievements and progress towards goals more frequently than once a year. In fact, recognizing and rewarding performance should take place on a daily basis.

Recognition culture

Creating a recognition culture is easy. Make recognition something you measure. Use every forum to praise and recognize employees; make it a regular feature in the way you conduct meetings. At first it may seem cheesy and forced, but people will quickly embraced it.

Take every opportunity to recognize employees and celebrate success. Even when a business is in trouble, if it begins to move in a positive direction, the progress should be acknowledged. Employees need to understand how they contribute to that success. How will they know this? Their manager needs to tell them.

If you can't come up with a way to find whether an employee is contributing to the success of the company, then you should ask if you need that position or that employee. Does everyone need motivation? No, there are a few superstars who don't need motivation, but it's fair to say most employees do.

The superstars are expensive. Small businesses often can't afford them and these are rare products. Therefore, small and medium businesses in particular need to focus on motivating their average employees to get superior performance.

Rewards

In addition to the types of no-cost recognition that can be built into a person's job, management should also administer low-cost rewards designed to encourage employees to excel. To heighten their effectiveness, these intangible rewards should be granted frequently and should be personal and creative.

The key word is 'creative'. Take time to find out what specifically motivates and excites each employee, and then do your best to make those things happen. When one of your employees has put in extra effort on a key project or met a particular goal, recognize the accomplishment immediately in a unique and memorable way.

The more creative and innovative you are with the reward, the more fun it will be for the employee, others in the organization and you. Rewarding employees for their exceptional work is critical to keep them motivated to do their best. Although money is important, you can get potentially more benefits from recognition that are personal, creative and fun generating.

It's easy to recognize some of your best employees - they're always doing great things. Consistent recognition is one of the reasons why they're your best employees. Find ways to spread the positive feedback wealth.

You might have to work hard to find reasons to recognize some of your less than stellar employees, but that's okay. A little encouragement may be all a poor performer needs to turn the productivity corner. Add recognition to the money you pay for sustainable motivation.