Motivated employees can create excellence in your company

By Tom Wagner

The ability to motivate employees is often the difference between business excellence and mediocrity. Managers - I use the term "manager" to reflect a measurement and control approach toward employees - know that you usually get what you measure and reward, and are constantly tinkering with schemes to influence employee behavior.

"Leaders" also seek to improve company performance, but include influencing the work environment in their toolkit for motivating employees.

The best bosses use a mixture of both control and influence, and realize that different situations call for different techniques. "Different strokes for different folks" is a hallmark of effective human resource management.

The first step to maximizing employee performance is understanding the four distinct factors that motivate people.

• Money: Anticipated economic rewards for achieving predetermined goals
• Recognition: An employee's trust that their good results will be appreciated and recognized
• Vision: A sense of shared purpose that unites a workgroup or company, coupled with line-of-sight goals that keep the individual focused
• Passion: Intrinsic, deeply felt interest in the work

The two most common forms of employee motivation techniques involve monetary incentives and recognition.

• Incentives are predetermined rewards established before the results are known. They can be part of the employee's normal pay structure or be based on a project or other event. Incentives can be cash, prizes, paid time off, or other benefits with a financial value. Simply put, an incentive works like this: Reach goal X, get reward Y.
• In contrast, public praise or other forms of recognition are not discussed in advance but occur after the outcomes are known. Recognition is often based in part on subjective factors and may be unexpected by the recipient. There exists an almost endless range of recognition rewards, from a private "thank you" to having the employee break room named after you.

The art to maximizing individual performance is achieving the proper balance between incentives and recognition. Once this balance is reached, good leaders add vision to the mix. Passion varies from person to person, and must be considered if it is a significant motivation lever.

Leaders who communicate an inspiring vision motivate entire groups of employees because most people want to be part of a winning team, and everyone wants to believe in a brighter future. It's true a grand vision doesn't put groceries on the employee's table, but without a vision work becomes routine and dull. Visionary leaders often use broad goals, like "Improving the lives of children and families" to help define expectations and desired norms of behavior.

Finally, there's the passion that comes from doing what you really love or believe in so strongly that you do it without external prompting. A leader can nurture a passion-motivated individual by discovering the underlying drivers of the passion. When passion is a key motivating factor, the most important management advice is, "Don't kill it."

• For example, making financial incentives a large part of a passion-motivated employee's compensation package may be counterproductive. For a person who's "not in this for the money," large bonuses (as opposed to a higher base salary) can feel demeaning and "cheapen" their accomplishments.
• Another sure-fire way to dispirit a passionate type, especially if they work long hours, is to allow "slackers" to remain on their team or work group.

Anyone designing a reward system to motivate people needs to be alert to the Law of Unintended Consequences. For example, quality may suffer if too much emphasis is placed on sales volume. As a final cautionary note, research by Tony Davila at the Stanford Graduate School of Business yielded a counterintuitive finding.

Davila found that company performance suffers if variable compensation is too large relative to fixed pay. That is, over-reliance on incentive pay hurts company performance.

In his study, Davila discovered peak performance occurred when incentive pay was 18 percent of total pay.