Press Coverage
20 ways to motivate your staff (without paying them more)
Real Business - 2002-03-01
First the bad news. Traditional benefits don't seem to motivate staff. More money doesn't either (most of the time). If you don't believe us, ask yourself what motivates you. Most manageers talk about their pride and excitement in doing a good job, their sense of mission, about the responsibility and opportunities for self-development. Why shouldn't the same things motivate your people too?
1. RECOGNISE SUCCESS...
The cheapest and most effective tip for motivating people? Pay attention to them. It's amazing how few people actually apply this simple rule. Here's Zena Everett, founder of Perriam and Everett Recruitment: "As a recruiter, I see many individuals wishing to leave their current company. Very often that's because they do not feel appreciated. "Thanks for doing a good job" is a fairly obvious but sadly rare way of keeping staff motivated."
Geoff Tudhope from Merryck and Co recommends "handwritten thankyou letters combined with small-value gifts such as theatre tickets." Anthony French from First City Care advises that "the best tools you are are, one, the words that come out of your mouth and, two, your legs to make sure you are in front of the right people when they do come out." In other words, be specific and link the recognition to the action.
Bruce Greig, who runs Redjacks, uses comment cards to tell his moped-driving handyman what a good job they're doing. The cards are included in their payslips each week and also posted on the company's web site.
2. ...AND MISTAKES
On the flip side, understand the importance of a no-blame culture. "Celebrate mistakes" is the philosophy here," says Henry Stewart of Happy Computers. "If we get everything right, then we clearly aren't trying hard enough."
And a view from left-field. Italian prime minister - and one-time media magnate - Silvio Berlusconi has brought private sector technologies into his new job. Government ministers get prizes or punishments, depending on their performance. "It's a system that has allowed me, during my life as an entrepreneur, to achieve good results," Berlusconi has said. He has "given everyone very precise tasks" and told them they get either a "prize or a sanction depending on how these operations are carried out." He hasn't revealed what these prizes or punishments might be, but Italian newspaper Corriere della Sera has speculated that "good" ministers could get anything from a public compliment to a Cartier watch, while the "bad" ones might have to buy dinner for the entire 25-person cabinet. Last year, Berlusconi offered expensive watches and bracelets to lawmakers from his Froza Italia party in an attempt to improve their attendance in parliament.
3. SORT YOURSELF OUT
"I found that keeping my own morale visibly high was vital to the motivation of staff" says Karen Turner of Imagine UK. The boss sets the tone of an organisation - go around looking miserable and anxious for the day and see how everyone reacts. Being an entrepreneur by definition, means being self-directed and ambitious, but it helps to keep your enthusiasm fresh.
"I've never found low pay, poor working conditions and pressure on output to be negative influences'', says Trevor Wood, director of the HRD Group, a Nottingham-based HR consultancy. "But lack of appreciation for people working in such conditions is a real cause.' The answer to motivation lies in your culture.
"Poor culture can arise from autocratic leadership; lack of effective communication; low decision-making participation; inadequate developmental systems or the opportunity to apply new skills; unrealistic and imposed target-setting; mechanical and therefore meaningless performance appraisals; and vision and value statements as customer window-dressing rather than to guide the organisation in the achievement of its goals.
"Turning such culture around has to start with management accepting that they are not God's gift and above criticism," he continued "Once this is accepted, then they will come to realise that if they are indeed human they, call make mistakes. Consequently they will then recognise that if there are problems within the company, then they must be both the cause of it and therefore the solution. In other words, management must stop making excuses, take responsibility and learn how to manage in varied and difficult situations. Any fool can manage with ample time and resources but real skill is needed when these are denied by market pressures. How the manager copes with this will determine whether the company is motivated or demoralised - or, to put that a different way, whether in the long term the company will excel or expire."
4. USE CONSULTANTS CAUTIOUSLY
Shock horror: consultants can be useful. Many smaller companies use HR consultants to advise on setting up Investors in People schemes. They can also make sure you don't "mark your own exam papers" by providing honest feedback. PR company Kaizon, for example, gets expert help when conducting its annual employee satisfaction survey. Consultants can also be useful for small businesses that aren't big enough to have full-time HR staff. Mike Nelsey, M D of Enline says they are "worth the money as it becomes more difficult to keep abreast of all the rules and regulations."
Brian Putland of Swan Components reckons you should talk to your staff before bringing in outside consultants. "I made an awful mistake once in doing this without consultation" he says. And don't use outsiders as a substitute for your own leadership or with a vague brief. Andrew Cope of Zenith Vehicle Contracts: "My strong view is that consultants are useful when you have a defined issue or problem, normally with a technical nature such as tax. '"They are of limited use when you arc talking about much broader, cultural issues." Peter Prowse, who heads up PR agency Prowse & Co, is very sceptical: "We have worked with a Business Link consultant in the past, in an attempt to develop it team approach and increase motivation. It had the opposite effect." The experience of your author with H R consultants Is mixed - they failed to solve tile problem they were tasked with but identified and helped solve another, more fundamental problem which we hadn't foreseen In other words, pick them well and use them carefully.
Peter Russian is director of development at Investors in People: "Number-one concern regarding motivation is whether People have the right skills for the job. Although training can be seen its it chore, it's crucial. A sense of belonging is also important, in terms of an induction, regular meetings with managers etc. If people don't know where they fit in, they're unlikely to be highly motivated. It's also the simple stuff such as singling people out for praise in public and, at other times, privately giving positive feedback. These things cannot be underestimated in their effect on morale."
5. MAKE EMPLOYEES OWNERS
Most of the managers and directors we talked to only mentioned one financial element - share ownership. "When ARM was founded, we took the decision that all employees would get share options. This had a unifying effect throughout our operations and engendered a sense of ownership," says MD Jamie Urquhart. "The company was founded in 1990 and went public 1998, so people were not driven by a short-term payback - this was before the dot-com boom (and bust)." Equally, if you don't intend to get bought or go public - make a virtue of it. Henry Alien of Production Geoscience, makes it clear that the company's independence is vital. That way, everyone knows that the bosses aren't out for a quick kill through a sale or merger.
6. INVITE YOUR STAFF TO BOARD MEETINGS
Increasing the level of staff participation in the strategic direction of the company can be a powerful motivator. Integrum invite employees to a quarterly board meeting. Production Geoscience lets staff nominate a director.
7. ENCOURAGE A SOCIAL LIFE
It's one thing to quit your job, but quite another to quit your friends. So help your staff build a social life connected with work. Trident Communications has a games room in its London office with satellite TV, snooker, bar football and darts, and it also encourages a tradition of Friday pub lunches.
The use of staff written magazines such as Pret a Manger's in-house publication, is a good way to build Community and also a great way of judging mood Says Trident's MD Alan Peaford: "if a policy or approach is unpopular it becomes the target of the satirists."
8. GET RID OF "THEM AND US"
Here's Jim Scott of Saracen Horse Feeds: "the most important technique for us is to jettison any possible trace of a 'management and minion' culture within the company. To achieve this we have turned the traditional corporate organogram on its head."
Remind your staff that you are human. Carry Waller's experience is common: "Many of my junior staff think I was born as the chairman," says the boss of freight company Alliance. The antidote is simple: let them get to know you as a person. "I take pride in knowing all our staff personally," says Mark Oxenham of Peak Fitness. Dave Latham of Advanced Chemical Etching recommends getting intimate: "I walk the factory floor several times a day and make a point of talking to all the staff, about personal stuff as well as business."
9. GIVE CHOICES
At my old company, Intelligent Games, we offered a typical benefits package that included pension and health insurance. Take-up was very low. There was a feeling of "so what?" among the younger staff. Before I left, I replaced it with a "menu perks" scheme. Everyone had a choice of benefits ranging from the traditional insurance and pension contributions as well as more lifestyle benefits such as gym membership, extra days off, mobile phones and, being a games company, a choice of Playstation games. The "menu" was developed in consultation with five members of staff who made suggestions and acted as informal ambassadors for the scheme. Each benefit was carefully costed and the system as a whole was designed so that the total benefits budget would not increase. Apart from a modest increase in the admin overhead, we achieved a great improvement in morale for no additional cost. It was probably the best personnel thing that we did in 12 years.
10. GIVE 'EM MONEY
Okay, I know we keep saying money isn't the answer but let's face it, it really does talk to some people. Karen Turner at Imagine UK doesn't bother with perks and the like. "We give all the staffs wages to them, and let them decide what to spend it on," she says. One-off bonuses work a treat; so, too, do interest-free loans (but make sure you can get the money back if your employee leaves).
11. COMPETITION IS HEALTHY
John Tanner of Kocher & Beck UK is a fan of competition. "We are the subsidiary of a German company producing much the same products as ourselves. The best motivation, we have found, is the competitive aspect of comparison with our German colleagues." This works in other ways, too. Recruitment boss Zena Everett runs an annual competition for sales staff based on revenue targets. The prize is two weeks in the Maldives. "The pressure from the spouse who wants to go helps too," smiles Everett.
12. LET THEM WORK WHEN THEY WANT TO
"Where people are generally well paid, additional time off and the ability to work flexible hours are probably the most popular benefits," says Philip Hunt of Wheel. Colette Hill Associates gives all its staff, regardless of sex, marital status or having kids, the freedom to work a four-day week if they prefer.
MTM Products is a 33-people strong label manufacturing company based in Chesterfield. The company won East Midlands Employer of the Year in 2001.
"We work on the basis of mutual trust between managers and employees and are benefiting from the extra commitment and innovative ideas generated by many of our employees," says MD lan Greenaway. It may sound cheesy, but it works. The key word is trust. If an employee has a problem at home, or if a child is unwell, then it is the priority. We tell our staff this always comes first. Solve the problem, then come back to work. Although some people might have taken liberties at first, not now. In fact, we find staff more inclined to work harder when called upon to do so as a result of this approach," says Rachel Richardson, a member of the MTM team.
The company negotiates individual working patterns and has a total of 26 different working patterns among its 32 employees. Employees can make changes to working hours due to school holidays, term-time working, part-time arrangements, home-working or other reasons. MTM has undertaken two "Stress Surveys" in the last three years and has not had any work-life balance complaints. Part-time staff are treated equally with full-time staff in terms of training and development opportunities. Regular briefing sessions are held and Greenaway conducts a daily walkabout" Staff are encouraged to talk to managers about work-life balance. Authority, and responsibility is delegated to the "grass roots" where Possible, increasing motivation and feelings of inclusion.
More free time is just as attractive for warehouse workers as it is for PR executives. Russ Stephens again: "\\/e tried endless cash-based targets trying to get the warehouse work completed earlier in the day, without any lasting success. About five months ago, one of our warehouse managers suggested setting a target for the pickers. On achieving the target, they had the option to go home or to carry on working and hit higher cash rewards. The improvements were immediate and lasting.
13. KEEP IT SIMPLE
If you use bonuses, keep them simple and direct. Redjacks' Bruce Greig gives a £10 bonus to each handyman for each job completed to the satisfaction of the customer. Result: they are highly motivated to do the job well and do It fast to get to the next one (and the next bonus).
14. BE NICE
Ralph Arrowsmith, of recruitment firm Arrow, became known as "the Mint Man" for his practice of giving out sweets. Alan Peaford gives "instant rewards for outstanding performance. This included one staffer being loaned my Jaguar XK8 for her honeymoon."
15. IF YOU MUST GIVE A CAR
Cars are falling out of favour. Mark Austen from Office Club "canvassed all my senior, company car-driving staff and, with the exception of the on-the-road sales people, they unanimously, voted to get rid of company cars in preference for a cash allowance." But don't rule them out altogether. Simon Waiters from Wood Hall Securities: "In this ever-materialistic world, staff usually get to drive nicer cars than if they were paying for it themselves, and their friends and neighbours get to see the fruits of their efforts." Plus it's a benefit that people can actually enjoy, unlike a pension contribution or health insurance.
Make the most of this benefit if you offer it. First, give a choice. The family man may choose a Citroen Picasso people carrier, but the single guy might want a Golf GTi. Second, be imaginative. Peter Dart from BrownKSDP recommends buying high-end secondhand cars rather than new rep-mobiles: "New cars are nice but we found a secondhand Porsche is more motivating."
16. MAKE THEM WINNERS
Prowse again: "We recently entered for several industry awards and won some, which is a great boost to the morale of all those involved. Even putting together the entry can reinforce the realisation that we have done a good job."
17. TELL PEOPLE WHAT THEIR BENEFITS COST
"The number-one requested benefit is a pension, followed by life cover and share options. We provide all three, but we found that staff-only really began to value them when they realised how much we were paying for them," says Robert Rackliffe of Jackson Batten Financial.
18. SET UP A PAYROLL GIVING SCHEME
Sheila Edwards of Caring Together finds payroll giving an excellent motivational tool. Essentially, the Inland Revenue-approved scheme allows employees to donate a regular sum of money from their salary to a charity or to charities of their choosing - before tax is deducted. So you get to motivate your staff and feel good about yourself, too.
19. BIRTHDAYS ARE HOLIDAYS
Mark Oxenham of Peak Fitness: "I announced that all employees would get their birthday off or a day off in lieu with pay. The feedback has been tremendous."
20. GIVE THEM SECURITY
Paul Stubbs is the new MD at Benson Components, based in Openshaw, Manchester. In its 50th year, the family-owned exhaust manufacturer took a change of direction. It now sells exhaust systems direct to the automotive market under its own name.
Part of the reason for its impressive turnaround is managing director Stubbs. Drafted in from a successful competitor, change has come from the top. The company is now involved with Investors in People and half the company has taken up training courses, includeing the senior management. "We've seen a dramatic rise in profits" says Stubbs, which he puts down, in part, to the company having recruited a well-known industry face. Companies I used to work with know my face and contracts have come through that. "We have also hired a great PR company which has managed to get us into all the main trade press." The turnaround started with increased PR awareness. "Then followed new customers, increased sales, more work going through the factory and an increased feeling of job security ---that was crucial."
So how did the workforce take to this new man calling the shots "People usually suss a new person out fairly quickly. You can tell what they think from what's written on the toilet walls. So far, it hasn't been too bad!"
Henry Stewart, he of Happy Computers: "follow the simple principle, 'people work best when they feel good about themselves' Combine this with giving people control over their Job so they decide what they do and how to do it, and have full potential to use their own initiative, make their own mistakes and learn."
