How to Motivate Your Employees

A common mistake leaders make is assuming that a motivation system boils down exclusively to salary. That is far from the truth. There are several metrics for this parameter, and depending on the company, the total number of incentives can be around 20—all divided into material and non-material categories. That is exactly what we will discuss in this article.

Two Approaches to Managing Employees

When running a company, there are two possible paths:

Option 1. You are not interested in your employees’ personal goals.

Option 2. You view the employee as a partner—an individual with their own personal goals. They will work more effectively within the organization if, by achieving the company’s goals, they are also achieving their own.

The second option is the most effective, and it is not that difficult to implement.

An Employee's "Energy Box"

When choosing a management approach, I suggest keeping this in mind: every employee has a finite reserve of energy for the workday—an "energy box"—that they cannot increase during the day. From there, two scenarios emerge:

1. Lack of goal alignment. If an employee's personal goals do not align with the company's goals, a portion of that "box" will be spent on achieving personal goals that do not contribute to the company's objectives. As a result, less energy remains for the company's goals.

2. With Vector Alignment. When an employee's personal goals align with the company's, their entire "capacity box" is directed toward achieving the company's objectives. This is every manager’s dream.

Once you’ve chosen your management style, you must build a compensation and incentive system (CIS) around it and communicate specific, recurring tasks and performance metrics to the employee—so they can evaluate their own work independently.

Sample list of compensation and incentive system metrics

• Salary: payment method ("white" vs. "grey" payroll), payment frequency, bonuses and penalties, sick leave, vacation pay, and salary levels
• Type of employment contract between the employee and the company
• Work arrangements: office, remote, or hybrid
• Additional payments: seniority bonuses, suggestion program rewards, birthdays, childbirth, weddings, and financial assistance
• Corporate events
• Access to low-interest loans from the company
• Training and education costs: internal (mentorship, workshops) and external (seminars, conferences, courses)
• Perks: discounts for employees and their families on company and partner services
• Corporate culture
• Career growth opportunities within the company
• Employer branding in the labor market

When developing your incentive system, it is vital to research the market, monitor it regularly (using competitive intelligence parameters), and make adjustments as necessary.

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This article was written by Alexander Bachinsky, a mentor at United Mentors, as well as a turnaround and interim manager. He has been a co-owner of a group of 10 businesses for over 28 years and serves on the boards of directors of 6 companies (spanning the hospitality, advertising, real estate, and lending sectors). He helps business owners increase operational efficiency and build manageable, scalable companies.