How to Keep your Employees Motivated without Pay Raises

Quality employee performance is crucial for any small business. Therefore, it’s a necessity to keep your employees motivated and happy.

While employees are motivated with pay raises, it’s not the only (or even most important) factor in overall employee moral and happiness. Other characteristics of your business culture and management style play a larger role that will keep your employees for the long-term and avoid bankrupting your business through unnecessary pay raises.

Create a Successful Hiring System

Firstly, you need to develop a great hiring system. I started a company called CRAVEBOX in 2014, which I still own and operate. I’ve hired and managed hundreds of employees over the past few years.

It’s crucial that you create an attractive job post on a job listing site like Indeed. Your job should have a competitive starting pay, a clear description of roles and tasks, and maybe pictures or a website link so the candidate can learn more about your company and the position.

Attracting plenty of high-quality candidates is important when you manage employees because you will be able to find great employees over time and let go of employees that are not a good fit. If you don’t have a path to plenty of great potential employees, you might end up trying to over-please your current employees, offer too many unnecessary pay raises, or place overwhelming expectations on current employees.

With plenty of great options accessible through your hiring system, you can manage your current employees with a more level head and allow them the space to stay or leave as they please.

Make the Job Clear and Simple

When you train and manage employees, you must present their job roles and tasks in a clear fashion. Employees want to know exactly what is expected of them and when they do, they’re happier and perform better.

I manage office employees and warehouse employees. The warehouse employees have a very simple job that only takes about 30 minutes to learn. They know exactly what to do and what’s expected of them in terms of their work quality, speed, and attendance. They are measured on those 3 metrics so they know very clearly if they’re doing well or need to improve.

The office employees have more complicated jobs that take longer to learn but the roles and expectations of the jobs are still very simple and clear. We share a google sheets document in google drive that lists exactly what they should accomplish each week. So, they know what my expectations are and if they accomplish all their tasks, they know that they’ve done a great job.

Employees don’t want to enter an unorganized environment where they aren’t sure what they’re supposed to be doing or how to do it. They want some structure and consistency. It’s no fun working for a company that changes your job or role frequently. So have a clearly defined job that stays consistent with well-defined tasks and roles.

Provide Adequate Training and Tools

Employees want to be able to perform their job well. They want to feel effective and confident. To make this possible, you must provide adequate training and tools.

You should have a structured training system so that when you hire the employee, you go through the steps of showing them exactly how to perform their various roles. There should also be an aspect of written manuals or videos so after you complete the training, the employee has something to refer to if they forget steps in the process.

It might be best to simply have them take their own notes as you’re showing them how to perform their various tasks. It’s important to explain clearly and slowly, and allow the employee to perform each function themselves while you’re watching.

People learn much more effectively by doing something as opposed to just watching or listening. After they’re performing well while you’re watching, you should slowly start allowing them to work alone but you still need to monitor their work frequently to check for mistakes and retrain them in those problem areas. Over time, you can continue to back away and give them regular performance reviews like you would with any other experienced employee.

You also need to provide them with all tools necessary to complete the tasks. This could be anything from a printer or scanner, to software, logins and passwords, or even funds like a company debit card. If you don’t provide the right training and tools, the employee won’t be able to perform well, they won’t feel good about what they’re doing, they’ll become frustrated, and you will likely have tension with them.

Offer Performance Incentives

It’s key to attract and retain self-motivated people and a bonus or incentive program will do just that.

For example, with my warehouse employees, we give cash bonuses each week to the 5 employees with the fastest speed for the week. This is great because it excites self-motivated people to work hard, think of ways in which they can improve, and compete to work quickly and efficiently. Not only does it improve their short-term performance but it also improves their long-term morale because they’re receiving bonuses and they know management measures and appreciates their speed and hard work.

For my office employees, I offer an annual bonus and the size of that bonus depends on their performance throughout the year. It’s not as simple as measuring a particular metric like speed for the office employees, so it’s up to my discretion to judge their performance over the course of the year. If you don’t offer performance incentives, great employees might feel like they aren’t being appreciated or that they’re not being fairly compensated for their excellent work.

Give Great Feedback

Providing frequent and quality feedback is so important to improving employee performance and maintaining their motivation. You should at least meet quarterly with employees to give them structured, written feedback on all aspects of their job. This is a great opportunity for you to recognize what they’ve done well and respectfully point out where they could improve. It also allows you to ask them questions to learn more about how they’re spending their time, what they like and dislike about the job, etc. It’s also an opportunity for them to ask you questions.

Without frequent feedback, an employee won’t know how they’re doing and they won’t feel appreciated for the hard work they’re contributing to the company.

Allow for Freedom and Autonomy

Freedom and autonomy is more important to employee happiness than pay rate. You must be able to clearly define the job, train the employee well, and then let them perform it with their own approach.

I don’t micromanage my warehouse or office employees. The warehouse employees know what is expected in terms of quality, speed, and attendance and if they’re reaching those metrics, they can do pretty much whatever they want. If they want to take a few minutes to text or make a phone call or take a walk outside, it doesn’t matter, as long as their performance metrics are being hit.

For my office employees, their weekly tasks are clearly defined on a google sheets file that we share and they can accomplish it however they want. If they want to take a break and surf the web or get something to eat, that’s fine with me, I’m not watching them. So there needs to be structure in the roles of the job, the training, the feedback, etc. but you must give them the space and freedom to perform their job in the manner that they please. This autonomy will retain many great employees because it’s rare.