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It doesn’t matter how great your product or service is. Without a driven team behind it, you will not succeed. And times are tough for companies looking to hire. Competition is high for finding and retaining those star employees that will set your business apart. Now, more than ever, it has become critical for companies to engage and excite their employees (both current and potential).

With new generations entering the workforce, the issue of employee motivation has become especially salient. Skilled employees have no shortage of work options, so why should they choose to dedicate themselves to your company’s growth and success? How are you motivating them?

Before I get into the nitty-gritty of employee motivation, I’d like you to take a second and think about the worst job you’ve ever had, and the best job you’ve ever had. Now, think about why- what are some factors that made one job so horrible and the other so great? Did you put in equal effort at both jobs? Keep these thoughts in mind as you read!

Motivation & The Brain

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On the surface, motivation in the workplace boils down to the level of excitement and determination an employee brings to their job. But let’s get deeper than that… Motivation can actually be thought of as a biological process, more specifically, a neurochemical response which triggers action.

Here’s how it works: A stimuli, let’s say a nice phone call from a supervisor, initiates the release of Dopamine in the brain. This release of Dopamine does not signal an actual reward, but rather signals the prediction of a possible reward. Once your brain is made aware of this reward prediction, it conducts a cost-benefit analysis. If the benefit outweighs the cost, a signal is sent to the rest of your body which initiates action to receive the reward. Once you obtain your reward, your brain releases even more dopamine which makes you feel good and helps you continue feeling motivated. For a more in depth explanation of what motivation looks like in the brain, check out The Behavioral Neuroscience of Motivation and The Science of Motivation.

Psychological theories surrounding motivation focus on the relationship between motivation and goals. According to John Arnold, professor of organizational psychology at Loughborough University Business School and author of Work Psychology, motivation boils down to three components:

1. Direction: What goal is this person trying to achieve?
2. Effort: How hard is this person working to achieve this goal?
3. Persistence: How long is this person willing to work towards this goal?

But what does all this mean for companies? And how can you motivate employees to view the company’s goals as their own?

How Does Motivating Employees Increase your Bottom Line?

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According to one Gallup survey, only 15% of employees in today’s global workforce feel engaged. That’s a crappy number that brings cause for concern, especially when you consider the direct correlation between employee satisfaction, customer satisfaction, and overall profit. This connection makes it clear that if businesses want to succeed, they need to pay attention to motivating their employees.

So how does this connection manifest? For one, motivated employees are:

• More productive, which leads to greater success in achieving company objectives .
• More likely to provide excellent customer service, which results in… you guessed it, happy customers. (If you are interested in learning more about this relationship, check out some of my past work on the topic).
• Less likely to turn-over which significantly impacts your company’s culture. That in itself will help you attract and retain more superstar employees to help keep the positive cycle flowing.

Let’s get into what types of motivation are out there, and which are the most beneficial for cultivating employee, customer, and company success.

Types of Motivation:

1. Intrinsic Motivation:

Intrinsic motivation comes from within. It is about reaching self-generated goals and satisfying one’s personal needs, whether that means proving autonomy, competence, or capability to oneself. In terms of the work world, intrinsic motivation means that the persons’ work role and responsibilities line up with their internal expectations. This is truly the strongest and longest-lasting form of motivation, but it is also the most difficult to inspire. Intrinsic motivation can take many forms, below are a few examples.

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Achievement Motivation:

The feeling of accomplishment is a powerful internal motivator. When your employees feel that they are purposefully working towards their goals within your company and that their current role aligns with their personal goals, they feel more motivated to “keep it up”. Your job as an employer is to make your employees aware of their current achievements and help them realize the potential for future accomplishments.

How to Motivate Through Achievement:

• Setting goals (short & long-term):

Tangibly mapping goals is helpful in realizing accomplishments. Working with your employees on setting weekly, or even daily, goals is a great way to help them visualize their achievements. And there is something fantastic about crossing-off a task on your to-do list (it releases dopamine which strengthens your motivation!) Tools like Trello and Asana are great for encouraging short-term goal setting within your team.

In regards to long term goals, I would encourage managers and employers to sit down with their employees regularly to learn about their long term goals: Where do they see themselves in one year? What about ten? How is their current role at your company helping them get there? Having these conversations regularly will help employees AND employers ensure that the current position aligns with employees’ long-term goals.

• Competition (with themselves):

Harnessing competitive spirit in the workplace can be tricky. On one hand, it can be motivating for the right employee, but on the other hand, it can create tension and damage your company’s culture. No one needs office politics or a toxic culture. Rather than encouraging employees to compete against each other, why not encourage them to compete against themselves? Keep employees informed of their current personal best records, (whether that translates to sales quotas, production expectations, positive customer reviews, OKRs, etc) and challenge them to beat them.

Competence Motivation:

Competence motivation can be viewed as a more specific subset of achievement motivation. It arises from our desire to obtain a certain level of mastery: The promise of that awesome feeling you get after mastering a new skill or successfully solving a problem serves as motivation in this case.

How to Motivate Through Reinforcing Competence:

• Positive Recognition:

A dangerous mistake many employers make is that they center their feedback solely on what employees are doing wrong. Critical feedback is an important part of learning, yes, but it needs to be balanced with positive feedback. Verbal recognition for a job well done goes a long way, in fact, the Aon 2018 Trends in Global Employee Engagement survey measured responses from over 1,000 companies worldwide and found employee recognition for contributions to be the “the strongest driver of engagement.” Recognizing their efforts gives employees the reward their brain is craving.

• Autonomy:

If your employees are handling their work well, further reinforce their sense of competence by granting them more independence and responsibility. Allow them to dictate the ways they meet goals. Giving them a choice in the way that they work signals that you trust in them and their abilities. Why? Because they have proven themselves capable. Now that they know you believe in their skill, they will feel motivated to prove you right!

2. Extrinsic Motivation:

Extrinsic motivation depends on outside forces or rewards. These external motivators often contribute toward achieving intrinsic goals. In this way, extrinsic motivation can be viewed as a secondary form of motivation. Extrinsic motivators are the things that typically come to mind when you think “employee motivation”, i.e raises, bonuses, and benefits. While this form of motivation is the most obvious and most common, I believe it is also the least effective.

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Financial Motivation

Financial motivation is likely the one you are most familiar with: “I need this job because the pay is great.” I’m not going to sit here and pretend like pay is not an important motivator because it is, HOWEVER, what I will argue is that pay as a sole motivator is completely unsustainable. It is important for you to balance financial motivation with other forms of intrinsic motivation.

How to Motivate Through Financial Incentives:

• Salary

Providing a competitive salary for your employees is extremely important and I’m not going to argue against it. But, as I stated earlier, it can’t be your sole motivator. If it is, what is stopping your employees from leaving their position with you once they are offered a higher paying position somewhere else?

• Raises + bonuses

Again, these are important incentives and work as great motivators, but they can not function on their own. Think about it like this – once your employees become accustomed to constantly receiving financial incentives, they will begin to expect them. When times are tough and you are not able to provide your employees with the financial rewards they expect, what will serve as their motivation to continue to perform at the same level they had been when they were receiving such rewards?

Incentive Motivation

Incentive motivation involves motivation through forms of tangible, external rewards. Financial incentives are a significant part of incentive motivation, but there are many other forms of rewards associated with this type of motivation.

How to Motivate with Other Forms of External Rewards:

• Benefits

Paid-time-off, insurance, and retirement options: In a perfect world, you can offer all these things and more to employees. But unfortunately, we don’t live in a perfect world, and your company may not be in a place to offer sweet benefit packages to all of its employees (especially if you are just starting out). If that is the case, substituting the extrinsic benefits you can’t yet offer with intrinsic motivators that you can is a great way of keeping employees motivated and inspired.

• Office Perks

I’m based in Silicon Valley, so I see this a lot: Companies essentially bribing employees to come to work with all types of cool perks. Take Google, for example, they offer their employees everything from 5-star meals to yoga and free haircuts. And yes, everyone wants to work there because of it. However, Google is able to balance these perks with intrinsic motivators such as high-quality training and employee autonomy.

When it comes to providing perks, my question for you is this: Do you want people working for you because of the perks you offer or because of what your company is actually doing? Yes, people are excited to come to the office, but are they equally excited about doing the work? My guess is no. Giving away free muffins each morning will only get you so far in terms of employee motivation.

Beware of Superficial Motivators

I’m just going to lay it out for you: Extrinsic forms of motivation are far less effective (in the long run) than intrinsic forms of motivation. Why? Because they are only surface-deep.

The biggest problem with relying solely on extrinsic forms of motivation is that your employees will only do the work because they now expect some type of incentivizing reward. They aren’t putting in the effort because they sincerely care about the growth of themselves or your company. It’s because they want that bonus or love their office space but don’t love the actual work.

Don’t get me wrong, I’m not saying to do away with all extrinsic forms of motivation, because, well let’s face it, you’d have a difficult time retaining or hiring anyone if you did. Rather, I’m pointing out that managers should switch the emphasis from external to internal motivators. Make an effort to bring these internal motivators to your employees’ attention. You can still provide your employees with good pay and great benefits, but these CANNOT be your company’s sole motivators, or you will end up with a disloyal and disengaged group of employees.

Taking the time to strategize how your company can meet your employees’ intrinsic needs will result in more motivated and excited employees, which at the end of the day leads to happy customers and greater profit.

Read more: Top 5 Motivators to Help you Manage your Small Business