Do you really know how to motivate your employees? Surveys show you can (and should) make employees happy without breaking the bank.
Most business leaders understand that employees are driven by a mix of financial incentives, praise and career opportunities.
However, a McKinsey survey of over 1000 executives, managers and employees across various sectors shows that money is a much lower priority than most employers expect.
When asked to list which motivational methods they found most effective, this is what both employees and employers found:
- Stock or options: 35%
- Increase in pay: 52%
- Performance-based bonus: 60%
- Opportunities to lead projects: 62%
- Attention from leaders: 63%
- Praise from managers: 67%
The numbers reveal a surprising result: all of the experiential motivators (such as project leadership and praise) were ranked higher in effectiveness than any of the financial motivators (such as bonuses and pay raises). While finances play a role, in reality the top three motivators were:
1. Praise from managers
2. Attention from leaders
3. Opportunities to lead projects
The survey also reveals that many managers misplace their focus when it comes to money versus experience. For example:
- While 63% of respondents found that attention from leaders was an effective motivator, only 41% of respondents practiced this approach or saw it being implemented in their company.
The opportunities to lead projects and praise from managers motivators were also used less despite high rates of effectiveness.
- Meanwhile, while 60% of respondents found performance-based bonuses to be effective, 68% of them observed or practiced this in their company.
Ultimately, this survey is great news for small business owners. It not only reveals the top secrets to employee motivation; it proves that a higher salary or bonus is not as critical to your employees’ satisfaction. While penny-pinching and cutting corners on employee compensation will certainly hurt you in the long run, offering employees mentorship, attention, accolades and growth opportunities can be an effective way to maintain top talent.
Article by Rochelle Bailis