What's the best way to motivate employees?
- Higher base salary
- KPI-based bonus
- Stock options
- Flexibility & work from home
- Company mission & values
Of course, most companies rely on a mix of these. But if you had to choose only one option?
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Hi Daniel, great question!
I believe that most people get the answer wrong.
When I was working in the tech industry, the HR department was always trying to make us believe that the ultimate motivation for employees is an amazing company culture.
BUT...
When the rubber hits the road, nobody cares about company culture.
Employees, and people in general, are usually looking for a great answer for the following question: "What's in it for me?"
And most of the times?
It's financial compensation. Money in their pockets. Food on their tables.
Yeah, company mission & values, and work flexibility are nice, but everything has a price.
Try to answer this question:
Would an employee agree to take a 90% cut in his salary, in order to improve his working conditions? Most likely - not.
But:
Would an employee agree to reduce his working conditions for a 90% salary raise? Most likely - yes.
Obviously, the salary you earn also plays a role.
If a person makes $1,000,000 per year, maybe they would not be ready to sacrifice working conditions for a 90% salary raise, because they are very well established and money is not supposed to be an issue.
But if a person makes $50,000 - $100,000 per year, a 90% increase is a life-changing amount in most cases.
Now, we're not robots, and we do have our needs, and even $1,000,000 per year is something you get used to and then (sometimes) want more. And this is where the culture and work flexibility comes into play.
So from my personal experience? Money always comes first, second, and third. Money is the only REAL means of showing REAL appreciation to your employees.
Then comes the culture and flexibility and everything else.
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@vofeld this is a very important discussion indeed - and it's hard to make people say what they think. I agree that HR are often hypocritical when talking about company culture and values.
At the same time, I don't think 90% cut or increase shows a lot. In most cases, there is a market salary for a position, and companies make offers within 20% range.
I can easily see an individual agree for a 20% lower salary if it is accompanied by a more suitable company culture and mission.
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@daniel_engels Yeah, that makes sense. That said, it all depends on their current salary, and how life-changing would the 20% lower salary would be.
Mission and values for sure, this steams into things like giving them leadership or ownership over projects, give them opportunity to see value and then back that
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@aleksdahlberg in other words, a horizontal hierarchy and ownership, right?
@daniel_engels Kind of, people feel more valued when the things they work on have value to them. Ways to inspire that can be found in giving responsibility and ownership over projects.
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Manager that cares.
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@madaras this reminds me of the series "The Office".
For me, when your employees come to the office daily, there must b gratitude for them like you can place a piece of chocolate over their table. It'll motivate them because I'd be happy with this.
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@amelia_charlie this is a nice perk, but in the long run I doubt it's a huge retention factor.
@daniel_engels Yes, it's not for the long run, but you can change your strategies: give them bonuses every six months and increase their salary yearly.
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I will definitely choose flexibility.
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@sophia_emma I guess after Covid19, even more people appreciate flexibility and remote work policy
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I think Flexibility & work from home
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If you can, take them out to lunch or treat them every now and then. Maybe even make them some food, cookies or something, and bring it in. It's a small gesture, but it shows that you care. Another thing would be to stay positive and don't always talk them about work. Keep up with their lives and ask them how their family is and such. Just generally be a nice person.
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@prepaidgift_balance well, of course lunches and small cocktail parties are helpful - as part of friendly atmosphere at workplace. But I don't think it's a major factor in the long run. It's even possible to build a full-remote team with a strong motivation.
It is super difficult to choose between KPI-based bonus and Flexibility & Work from home.
I chose KPI-based bonus option for one reason, other options on the list like Higher base salary, Flexibility & Work from home can give a boost in motivation when an employee receives it for the first time. Once the employee gets it that will soon become the new normal and the baseline for their employment so the motivation from these two factors can diminish over time.
KPI-based bonus will be a good way to keep the employee motivated as there is consistency and the KPIs will be readjusted regularly.
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@rahul_mohanachandran people tend to appreciate less what they take for granted. It's important to keep the team members aligned. Defining accurate and objective KPIs isn't easy, though.
If we are talking about the motivation to join the project, then I'd go for flexibility. If it's about the motivation to do your best day in day out, I've seen stock options do well. To me, it's about the team and the culture - when everyone around you is doing their best, the desire to do the same is contagious.
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@maya_ovice the question was about motivation of team members. I appreciate flexibility, too - although its dangerous without proper management.
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The best motivation is always the right bonus. Assuming that work in the company is pleasant for every employee because the atmosphere in the company is the basis.
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