Figuring out how to motivate employees and improve morale is a significant business issue. It affects your bottom line in many ways, visible and invisible. Business profits are driven primarily by gifted, creative, motivated, and on-task employees who are more productive than their job description demands. Your ability to engender such emotion could spell your success or failure as a manager.
Perform employee surveys targeted toward motivating employees. You have probably performed employee satisfaction surveys. If not, you should. These are valuable tools but are usually retrospective -- they asses how things went. They are not projective -- they don't always project how to make things better.
If you want to know how to motivate your employees, you really need to ask them. Each employee culture will have its own set of values and desires. If you can tap into these, you can radically increase your employee satisfaction and motivation to produce for the company. Your employee surveys should address issues such as the effectiveness of employee incentive programs; most valued employee incentives; and employee rewards that aren't currently being used. Finally: ask what THEY think would be nice.
Consider generational differences in employee motivation, which need to be addressed for employee satisfaction and productivity. The mature generation (Born pre 1945) has decided not to retire or returned to the employment force due to the economy. They value sacrifice and contribution to society, position, and pay raises. The Boomer generation (born post 1945 through 1964) values a flatter power structure, but with clear delineation of who is in charge. They value pay raises and time off. They will give you everything they have from 9 to 5, but prefer you leave them alone after that.
Generation X (Born 1965 to 1980) employees value freedom, flexibility, and a highly flattened power structure. They want their opinion to matter, and their work to be praised. Highly suspicious of corporations and organizations, they are usually not as interested in promotions unless promotions increase their freedom and flexibility. Give them a clearly defined task; just don't tell them how or where to do it.
Generation Y (Born 1981 to 1999) -- Technology is their middle and last names. They see a radically different world than older managers and employees were born into. Deeply disturbed by the ongoing injustices in the world, they want their work to be meaningful, and to provide change. A new Mac computer combined with a donation to charity will be more motivating than a long-term contract they won't trust anyway. They have watched corporations pull the rug out from their grandparents and parents, and won't buy into anything long term.
Offer employee incentives and reward options when possible. Given the difference among generational motivation, consider offering options for performance rewards. Let them choose, for example, between a new iPhone (Generation Y); an extra work at home day for a year (Generation X); three extra days of paid vacation (Boomers); or increased pay with increased responsibility (mature generation).
These are all generalizations, so you may have a Generation Y employee choose the increased pay with increased responsibilities for personal reasons. That is why choice is so helpful.
Provide feedback in multiple ways. Some will prefer to receive a formal feedback session with a performance review every six months to a year (Mature and Boomer generations.) Others will prefer sporadic and spontaneous face-to-face feedback and approval (Generation X). Some will need continual and immediate electronic feedback through social media or email (Generation Y).
To increase employee motivation and morale, diversify your efforts.
Provide concrete clear objectives with predetermined employee rewards. This is perhaps the most important step. Every employee wants to know what is expected, when to achieve it by, and how to know when they have succeeded or even exceeded expectations. A fantastic book on this subject is the E-Myth book that offers a fantastic read with clear descriptions of a position contract.
The most demotivating environment is the work place that makes productive employees produce more without any compensation for higher productivity. When the job is done, that should be recognized. If you want them to keep working and producing, either raise pay, offer a promotion, give a bonus, increase vacation, allow greater flexibility, or give concrete tangible employee rewards. Otherwise, people will figure you out and work slower since they have to work harder if they are productive.
Make sure to keep your employee reward and incentive surveys happening on a yearly basis.
Don't judge one generation's way of viewing life as better or worse than another. If you do, you will lose a large part of your employee motivation and leave money lying on the table.
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