Employee engagement Leadership

Employee motivation is not only financial

Is money enough to motivate your employees? It might be more than that. Here are some toughts

by Emanoil Draganescu

As nowadays is more and more difficult to recruit good employees, more importance is given to employee retention. Motivation seems to be a major factor involved in employee retention. This article explores employee motivation, not claiming that the subject will be completely explained. There are a lot of motivational theories from Herzberg to Maslow and many other. This article is not about that.

Let’s take into account some factors that influence employee motivation.

Of course, it is the financial package

The financial package is of course an important matter. But let’s see what is the financial package made of.

  1. The salary – that in Romania is usually paid monthly or twice a month
  2. Performance and non performance bonuses
  3. Paid transportation
  4. Parking place (where case)
  5. Company car
  6. Paid vacation
  7. Bonuri de masa and tichete cadou
  8. Extra pension
  9. Medical insurance – personal and family
  10. Other

Let me tell you now how the financial motivation works. Whenever we receive a bigger salary, if the salary increase is at least 10%, we will notice the increase. In the next 3 to 6 months more than 90% of the people will upgrade their spendings to the new status.

According to my experience there are two levels to consider when we discuss financial packages. These levels depend on someone personal needs but differ from person to person. We will further explore this in a future article.

The first level is the basic needs level. If this level is not fulfilled the person will seek for another job. No matter how bad working conditions are somewhere else, if the employees do not attain this level they will definitely quit when the first opportunity appears. The good news is that in a developed country economy, most of the financial packages are above this level.

Second important level is the 100% job satisfaction level, that’s how we call it. This is the level from where the job satisfaction is so important that paying more money to the person, doesn’t have the slightest importance. The bad news is that only about 8% of the employees (including entrepreneurs, CEOs, CTOs, etc) reach this level during their life time.

About 80% of all employees are between these two levels

most of us are inside the “Middle area” between the two levels

As you probably expect, once you pass, the “basic needs level”, any kind of financial motivation is not enough.

There is also a complete set of non-financial motivators which will explore here and develop in other articles in the future.

Work relationships

Work relationships are in our opinion one of the most important motivation factors. Not only that we spend a lot of time at work, but even if we like it or not, we as human beings are made to establish relationships. So don’t BS me that your work relationships do not matter. There are at least 3 type of relationships to take into account when motivating your personnel.

  1. Relationship with co-workers, direct reports and employees that you don not interact with on daily basis. Some might say that relationship with the bosses are more important than the relationship with your co-workers, but I would put the co-workers first because they are the ones that create the feeling of belonging in our minds.
  2. Relationship with managers. Yes managers matter. And by relations with managers we understand the relationship with
    • direct managers – direct managers are maybe the most important working relationship because they represent the company in employees mind. Come back for the many articles about the relationship between management and employees. Managers are a key motivational factor. If you are a manager you are a key retention factor for company employees. You are most likely to be the main reason when people decide to leave de company
    • top management – even if in some cases there is no direct link between the employees and top management, the top management style radiates to last employee through managers and company culture. There are companies where employees are proud that their CEO is recognised in the market
    • non-direct managers – affect employee satisfaction by the modus they manage their department, especially if the department is a key department in the organisation. Therefore we should pay attention to the managers that are leading departments like, finance, operations, sales that might impact the whole company
  3. Relationship with the company overall – is about the way that your employees perceive the company image, corporate fairness, branding and the perception of their close friends and relatives about the company

Work Environment

Work environment has a large number of components. Some may argue that work relationships are part of the work environment, but we preferred to treat them separately. There are of course other work environment variables that we are simply going to list here:

  • office space in general – furniture, light, open spaces, common spaces, relaxing spaces, meeting spaces, etc
  • equipments
  • cleanliness
  • uniforms – when case, clothes
  • facilities – canteen, work-out, kinder-garten, parking, cafeteria, etc
  • working schedule

Company culture

Company culture plays a major role in motivating and demotivating employees and there are at least few variables that we would like to emphasize:

  • fairness
  • mistakes treatment
  • feedback
  • rules
  • chain of command
  • decision making
  • of course there are more 🙂

Personal development

A working environment should offer an opportunity to grow. If your employees do not grow, sooner or later they will feel dissatisfaction regarding their work. Personal development may take the form of extracurricular activities, trainings, coaching, sports, working in international environment, etc.

Personal contribution

Sometimes we decide to get a job because a bigger company allows you to build something that you cannot do by yourself. Bigger company means more resources, more people and the opportunity to build a future that you cannot build in a small company. Use the size and power wisely.

CSR programs are also a major motivator factor. Corporate Dynamics conducted a study, and according to the study conclusions, employees participating in CSR programs have “engagement” scores double in average compared to the employees in the same companies that do not participate in CSR programs.

Instead of conclusion

Maybe there are also other factors that we did not take into account in this article. The idea is to understand the complexity of employee motivation and build more on non financial factors. Unfortunately most of the decision makers are blind to the effects of motivational factors other than money and office space, look too much on the outside and too little on what their role is.