A business which truly understands what motivates its employees can then make sure that employee rewards match what they are seeking.
It seems logical this would then create the most engaged and empowered workforce – which must surely result in a more successful business.
So, why do we go to work? Is it for the money?
Yes, to some extent.
But it is also because we enjoy working. If this wasn't the case, there would be no nurses or other health professionals, who do purposeful jobs which are underpaid.
Being allowed to be involved
Why, then, do we focus the return on employment in financial terms? We advertise jobs by salaries. We implement financial targets and bonus payment schemes.
Kirsty Lynagh, chief people officer at Nucleus, once told me: “Everyone says that employees are the most important part of their business. And yet, as they grow, the first outside appointment is usually marketing or finance, not HR support.”
In the book Drive, Daniel Pink explains that modern working is less about performing a series of steps for an outcome, and much more about problem solving.
Accordingly we are less motivated by reward, and more interested by achieving purpose.
Far from giving employees money for performing well then, we should be offering thanks for their help in supporting the business to achieve its purpose.
This is important when preparing to sell to an Employee Ownership Trust (EOT), but is relevant to any owner who wishes to reduce the reliance of the business on them.
In The Eternal Business, we call this ‘the flag’.
It is the flag in the ground around which everyone will gather; the flag at the front of the army that leads the soldiers into battle. It is the reason the company exists.
The flag is difficult to nail down. It is not just ‘making clients happy’. It's not what you do, but what gets you out of bed in the morning to do it.
The clearer the flag, the greater the inspiration. It won’t suit everyone – a flag which tries to attract everyone risks attracting no one.
Once the flag is established, the role of management is to give the employees as many opportunities as possible to contribute to achieving that purpose.
Think about your own business.
To what extent do you tell your employees what to do? How often do you give them a challenge, then allow them to find their own way to complete that challenge?
How often do you allow your team to follow a course of action that you don’t completely agree with?
Give peeps a chance
On the question of appraisal systems, these can often do as much to instil negativity as they can inspire.
I've certainly been subject to appraisals along the lines of:
Step one - This is what is expected of you over the coming year
Step two, a year later - These are the ways you did not achieve our expectations.
This was thoroughly soul-destroying.
Instead, make the flag is clear as possible, make sure it is communicated, and then discuss with employees ways they can contribute.
The focus of the appraisal then becomes how the employee has helped the company achieve this purpose.
A friend of mine who ran an engineering firm tells me the most popular action he took during his time as managing director was to scrap the company’s bonus scheme.
Rather than isolating individuals for their part in a team effort, surely better to reward everyone for the success of the business.
The Employee Ownership Association reports that the increase in profit simply due to employees being allowed to have a voice in the running of the business is 15 per cent. They call this the ‘whoosh effect’.
In summary, treat employees like worker ants, and they might work hard. However you may well need to stand over them to make sure they are working effectively.
Instead, set a clear purpose for the business and provide opportunities for employees to achieve that purpose.
By giving them challenges or even letting them set their own challenges, your employees will become inspired.
As a result, the business may well begin to run itself.