Compensation that Motivates
Getting the most motivation from those precious payroll dollars

When HR professionals peer inside the crystal ball, some see a time when the annual salary increase is no more. This is because for many employers, the financial investment of company-wide salary increases yields frustratingly small amounts of employee goodwill and little, if any, increased motivation. A 2% to 4% increase range may represent a significant investment of company resources, but it’s simply not enough to wow any individual employee. Additionally, over time the annual increase becomes expected rather than appreciated, an acknowledgement of tenure and not hard work. Money should be the ultimate motivator, but after a year on the job, a 3.0% increase can feel more deflating than motivational.

And the word is out. Per WorldatWork’s 2016-2017 Budget survey, the number of employers using bonus pay to supplement their annual salary increase has risen to 86%. Simply put, any organization that doesn’t offer something more than base salary risks losing its motivational – and competitive – edge.

But what if money is tight and the addition of a bonus pay program is simply out of reach? Can these organizations still compete and motivate their employees? The answer is a resounding…yes!

Connecting the dots: Motivation through employment

The first step toward empowering employees can be as simple as a well-designed job description. But even the best-defined role can stagnate after a while, and there’s nothing particularly motivating about feeling stuck.  Although the three-day seminar at the expensive hotel that your most promising employee just requested may be financially out of reach, there are other ways to help her obtain those training and development goals:

  • Webinars or on-site group trainings on requested topics;
  • Formal or informal mentorship programs such as one-on-one monthly lunches with a senior management member of her choice or including the CEO in department meetings to provide the “view from the top” from which many employees feel disconnected;
  • Sponsorship or cost-sharing of industry certifications and test-preparation programs.

There are endless possibilities, but the only ones that matter are those that matter to your employee. So, don’t forget to ask her!

Connecting the dots: Motivation through inspiration

Every business owner will eventually ask themselves about the type of company culture they want to create. Thanks to McGregor and Doshi, we know that when it comes to employee motivation, there’s never been a more important time to ask that question than right now.

What matters here is connecting that decision to the mission of the organization. If the company’s mission is to make the world’s best running shoes and encourage healthy lifestyles, an aligned company culture might provide an extra-long lunch break for employees who want to exercise and a place for them to shower before returning to their desk. If the mission is to be an exemplary world and social citizen, consider closing the office one day a month so employees can volunteer at a charitable organization of their choice. Put company muscle behind the mission, or that carefully crafted mission statement will fall flat and won’t inspire or motivate the people who matter most – your employees.

Non-Monetary Motivation

It may seem like an oxymoron, but evidence for the effectiveness of non-monetary rewards keeps building. And for many employees, non-monetary rewards are just as motivating as monetary ones. According to a report from Mercer, respect and work-life balance hold court at the top of the list. After all, cash may be King, but it won’t get you to your daughter’s softball game on time. Only a flexible work schedule can do that.

What else?

  • Starting every staff meeting with time for employee acknowledgements and appreciation;
  • Handwritten thank you notes for closing a big deal or diffusing a tricky customer situation;
  • Sleep-in Mondays, where an employee can arrive to work late one Monday morning;
  • Giving star performers first dibs on the most requested vacation days or the prime parking spot;
  • The list goes on!

Just like the annual salary increase, a compensation program built around strictly monetary rewards is becoming a thing of the past. A total rewards program must be designed in a careful and thoughtful way to fulfill its goals of reflecting company culture, and inspiring and motivating employees. Once the right mix of compensation and non-monetary rewards are in place, employers may find it’s not only the key to motivating staff, but also to recruiting and retaining them.

How’s that for a bonus?

Facebook Live: Top 5 HR Traps to Avoid

There is no crash course in HR required small business owners before we open our doors! We learn as we go. But that may mean we are taking on more risk and headaches than we realize.

Join us LIVE Monday, May 22 at 3pm. Our CIO Mindy Flanigan will be going over these 5 traps and is available to answer your questions! 

  1. 1099 vs. Employee – because no one wants to pay back taxes
  2. Job Descriptions – yes, you need them
  3. Hiring the Wrong Employee – selection means being selection
  4. Failure to pay Overtime – the retaliatory ex-employee is your biggest threat
  5. New Employee Onboarding – sink or swim does not work well
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