How to Motivate employees and Retain them



motivating-and-retaining-employeesWhat motivates your employees?

Every employee has different reasons for showing up at work and there are different ways to motivate each of the people working with you. Since one size does not fit all, it is best to stop guessing and to find out for sure what it is that makes those reporting to you love their jobs. Knowing what motivates your direct reports is also a great way to ensure you retain your direct reports. Of course having a good professional relationship with each of your direct reports goes a long way to ensuring that issues which may demotivate them are brought up early and resolved in open dialogue and discussion.

The exercise below can be used by you to first establish what you believe would be motivational before you ask your direct reports to complete the exercise below. Understanding that, as their supervisor, you are most likely not going to get it right without their input may further instill the practice in you to always check your assumptions before you engage when it comes to understanding what would motivate others.

The list below contain outcomes that could be motivational to your direct reports in their jobs. This means that these outcomes would keep them interested in continuing to work in this role, for you and in this company.

Instructions: Rank the list below in terms of 1 to 14 where 1 means “motivates me the most” to 14 which means “this does not motivate me much.” The ranking is not to say that this is how it is RIGHT NOW, but in the perfect environment, what would be the most vs least motivational to the person doing the ranking.

A. Rank these from 1 to 14

  • Receiving market-aligned compensation for the job I am doing
  • Recognition for my efforts by my supervisor
  • My work is interesting and challenges me in a positive way
  • The company/job comes with excellent benefits (separate from my annual salary)
  • Pleasant working environment (ambiance, set-up)
  • My supervisor is fair in making decisions and communicating them i.e. promotion, recognition, expectations.
  • The knowledge of my colleagues which is shared with me
  • I have all the information I need to have in order to understand what my priorities are and why I am performing the tasks that I am assigned
  • I understand exactly what my supervisor expects from me
  • I have a great feeling of accomplishment in this role/job
  • This role/job provides me with a lot of learning options, which can lead to promotions in the future
  • I have a chance to contribute to discussions and decisions that impact me
  • The people I work with are great people who make me feel included and valued
  • My opinion is often asked for and is valued by my supervisor

B. Level of current motivation

The next step would be to ask the same employees to rate how much they are currently motivated by the same items from above.  Comparing these answers with the answers in A. can help you identify possible ways in which you can improve the motivation of each employee reporting to you. For example, if someone had a high ranking motivator in A. and that same item gets a low score in B. that means you should look for ways to impact that area to motivate and retain that particular employee.

motivation-ranking

Once you have captured the feedback from those who report to you, have individual discussions with each one of them to determine how you can better impact the areas that they scored the highest:

  • How can I, as your supervisor, help you to have a better experience of this item (high ranking items from A. the list above – especially if that same item has a low score in B.)? _____________________________________________________
  • Are there ways in which you feel that I can remove obstacles or improve your experience in this regard? (see highest ranking items with low scores in exercise B.) ______________________
  • Is there anything that you and I need to discuss or resolve to remove any bad feelings or negativity from the past to move forward on a positive note? _________________________
  • Is there anything that I, as your supervisor, can do better to improve your enjoyment of your job/role at the company?

Be sure to mention (as appropriate – be truthful and honest):

  • I want you to know that I value your contribution and you are an important team member to this project/department.
  • I believe we can achieve great accomplishments in this department/team if we work together and communicate openly about what needs to be done and how to support each other in order to have a better overall outcome for the team/department.
  • I hope you will take the time to let me know of any obstacle that you see which may hinder us in achieving our goals. And I hope you will see any feedback from me in the same light – I want you as an individual to enjoy what you are doing (realizing that not all of our jobs are highly enjoyable – some parts are typically repetitive and maybe mainly administrative) and I want your contribution to the team/department to be clear to you in terms of expectations and how things are going.
  • Is there anything else you would like to bring my attention or which you think we should discuss before we end our meeting?

After the meeting you may want to consider reviewing your notes. Some items may be easy to action, simply by you emailing or calling someone in order to set something up. Other items may not be so straight-forward. For example, someone with a performance that does not meet expectations may ask for an increase. Set up a meeting with your HR Business Partner or representative to talk through the items and set priorities. Always make sure you are able to provide direct individual feedback to each employee on the items you discussed in your individual meetings with them.

Employees are motivated by different aspects of their roles/jobs at the company and there are many ways in which you are able to influence these aspects. The professional relationship you have with your direct employees also greatly impacts whether someone chooses to stay or leave the company/their role.

In the end some employees will leave and you will need to fill those roles by promoting existing employees or hiring new employees. Ultimately, the sign of a good leader is the number of great leaders he or she creates. When they feel the need to leave to move up, applaud them, keep contact with them and congratulate yourself when you see them succeed regardless of where they end up as a result of your great coaching and support.

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Performance Review and Merit Increases


performance and reward processes

Performance management, salary reviews, desired behavior of leaders and employees and reward and recognition mechanisms are all very much connected and very much over-lapping with each other. Making changes to any one of these areas without considering how the other areas will be impacted would be foolish. People will always adjust their behaviors and efforts to ensure the best personal outcome for themselves. It is up to the company to ensure that these interlinking areas are in harmony with each other in order to reward and drive towards desired behavior and outcomes.

The resource I have here ties a specific overall individual performance review score to a specific range of possible merit increases. Management demand to have a fixed and structured approach for this is easily recognized, but it is also true that more than one aspect should be factored into selecting overall increases for employees. Some additional factors could include what is the budget for increases that year? How did the company perform in the last year (overall)? What is the labor market like at that time – are some jobs in high demand and do you risk retention issues if you do NOT ensure good compensation packages that compare well to the local market?

I would caution anyone to consider unintended outcomes when attempting to standardize and establish rigid structures for considering individual performance and linking that in a fixed way to increase percentages. Be careful what you specify and indirectly require from managers and employees. Your intentions may be good: to reward your best performers for their contributions and to ensure those with lesser performance improve or leave the company. You may end up with people for example not sharing information or not collaborating with others if doing so could hurt their own income potential.

One approach to tying the performance review process directly to the merit increase process is attached here. This example does not take into account some of the considerations highlighted above when it comes to selecting the actual increase percentage and I chose to share this resource anyway, because it does happen that HR is asked for a process like the attached on a regular basis and I want to make an example available to you if you find yourself in that situation. I do suggest you consider ways to incorporate the other aspects as outlined above when you finalize your proposal to implement a more structured approach to tie performance management to compensation review.

Performance Review process linked to Merit Increases resource link.

My main advice is to think it through carefully to ensure your good intentions have the best chance of being reinforced by your performance management and salary (or compensation) review processes. And I would also add that you should remain flexible in working with your documented process. Be ready and willing to adjust and update it as you gather input about how successful your process is in driving desired outcomes – results and behavior that you and the executives would like to see in your pool of employees.

 

Performance Management Process


final perf imp

One of the most fundamental areas where HR has to add value to companies/organizations is to manage and improve the outcomes of the Performance Management Process. HR’s accountability clearly goes beyond the setting and maintenance of  a process to manage individual performance outcomes. The resource I will share here is however mainly focused on the individual aspect of the Performance Management Process – including some links to the salary/compensation review process and the individual development process.

This generic Performance Management Process shows the various basic steps that would need to be followed over a 12 month period to create an annual process. There are references to the link with a salary/compensation review process and also the link with identifying and reviewing individual development needs and progress along achieving improvement goals.

Performance Management Process resource link.

Implementing a process like this would need a change management plan if your organization has never done anything like this before. Even if you have had some form of a performance management process in place, but would now like to expand on it to include some of the elements shown in the attachment, a change management plan would be recommended. Before you start you would of course ensure that the manager/director, who is accountable for the performance management process at your organization, is aligned with your ideas and suggestions and strongly supports the direction you would like to take.

The benefits of having a documented process for Performance Management (like the shared resource) are:

  • It is easy for HR to ensure new employees, current employees, new supervisors and existing managers understand the process and their role in the process.
  • It is a way to help stakeholders understand and then prepare for the input and activities that need to be completed in order to support the process.
  • Linked to a balanced score card, this process can make it clear to individuals/departments how they collectively and as individuals support the attainment of larger organizational performance goals.
  • Knowing that there are check-in moments or feedback and discussion moments around performance expectations, progress and development needs and activities can be a strong way to reinforce employee engagement as many employees tend to consider other employment options when they feel that their development and career progression goals are not being met by their current employer.

This list is not exhaustive. For more information about benefits see links like Benefits of performance management or Importance of Performance Management

 

Salary Review Template


salary review2

Arguably the most contentious two processes in the HR world have to be performance feedback (part of Performance Management processes) and salary reviews (part of Reward and Recognition processes).  Most employees and managers and of course writers of trendsetting articles around these topics have strong opinions in all directions about what should be happening and how bad a specific approach is. I will refrain from picking sides at this time, but I will instead share a simple template with you for conducting a salary review for those reporting to you and who are most likely then a part of your budget.

Many HR departments of large companies have access to an online tool for salary reviews, but I know there are also many smaller companies who do not have the deep pockets and may have some use for a tool/template like this one.

The basic principles for using this tool are:

  • When you hired someone, some years earlier, his or her salary was X, let’s say that represents 30,000 EUR per year. Some years later there may have been inflation meaning the person’s buying power went down and perhaps to hire someone new for the same role the average market price may now be 32,000 EUR per year.  You need to make sure to retain the person you hired and avoid having to find someone new for the role by reviewing his or her salary on a regular basis. Typically once per year.
  • Your employee has been delivering work for you over the last year and he or she maybe did it better than others in the same role. That performance which exceeded your expectations deserves to be rewarded. You could do it as a discretionary bonus or you could review the person’s annual salary and consider an increase.
  • Some employees bring increase requests to their bosses on a regular basis while others may just be waiting for their bosses to realize how much effort they put in and how many good results they are achieving. Without a solid salary review process which is run uniformly on an annual basis (at least) you could run the risk of not treating all of your employees in the same fair manner when it comes to salary reviews. It could happen that only those employees requesting regular increases are receiving them while those who do not ask do not.

Salary Review Template

The template shows all of the current employees on your budget plus what they are earning now, what their last performance review overall score was, and some basic employment history in terms of experience years and last promotions. Hopefully you have budgeted for annual salary increases and you have planned for at least between 2 and 3% in overall annual salary increases.  (This could vary by country/region in terms of local labor laws, minimum wage adjustments, inflation, scarcity of resources as applicable to those working for you etc).

Giving everyone a standard increase may seem fair and easy to you, but it comes with some risks. If you reward those who work harder and achieve better results the same way as you do those who do not, you risk demotivating your hard workers and may eventually lose them to your competition. Those who are not working very hard or very smart are not motivated to change anything either since they know they will get their standard increase no matter what they do. So don’t go for the “one size fits all” approach. 

This template assumes that you will use all of your budget and you will distribute it among your employees depending on the factors that you have decided to take into account i.e. performance review scores, years of experience, specific role (if there is a scarcity and steep inflation in salaries for that role in the marketplace around you) etc. The sheet keeps track of your overall budget so you can see if you have overspent or underspent overall.

The difference between the types of increases are simple – merit increase relates to the performance of the person while equity increase relates to the person being basically too far below what that job pays at this given moment in time. This could be either because you hired the person in at a too low a salary or you have neglected to review his or her salary for too long and the current market pays much more for someone with the same sets of skills and abilities as the person in your group.

Performing a fair overall salary review is not easy to do since many factors will present themselves as you go through this sheet as a manager. You will wonder if person A would leave if you don’t give them the increase which he or she requested or demanded some weeks before. You will wonder if you can give another person a zero increase since he or she already earns so much more than the others. You will be worried that a lot of angry employees will want to talk to you after these increases are communicated (by private letter from HR or discussion with you).

Do talk to the most senior HR person in your region/location for support in helping you make sure you have made the best choices for each of the employees concerned. A best practice that can also help with fairness is to have a round-table review with other managers at the same level as yourself to ensure all of you are using the same principles for determining salary reviews.  I strongly recommend that you include the most senior HR person supporting these managers in the round-table review to help with guidance and support when there are opposing views or concerns.

Note: This template is a simple tool and could help you start up an annual salary review process, but beware that the topic and the best approach to use is a hot and touchy subject for most and it would take a lot more than just this template to ensure you have a solid and fair process in place.