How to Create and Measure Employee Motivation

We often used the term motivation, but do we always mean the same thing?

Last week I gave a talk in two classes in the School of Economics & Business Administration at the Ruppin Academic Center, as part of Dr. Adi Loria ("Select Issues in Management MBA"). The topic was "The Relationship between Management Methods and Employee Motivation".

The first question I asked the students, most of whom come from the world of industry or business, was "what is motivation?".

‏I received a variety of answers:

Propulsion to action.
An urge to succeed, inner strength.
An urge to act.
A desire to do something – energy.
Result – improved performance.
The will to get up in the morning.
The desire for change.
The desire to achieve and accomplish.
Propulsion/enjoyment.
A willingness to give up on things or make sacrifices.
Making existing potential manifest.
Getting out of your comfort zone.

The variety shows us the differing ways we perceive motivation, or, perhaps articulate a shared perception in differing ways.

Either way, all the definitions are very similar and question of how to create and measure motivation fits them all.

How to Create Motivation?

He next question was – how to create motivation? Here to it's interesting to see what the students, who as mentioned all know the world of work and organizations well, said:

Knowing your employees.
A sense of belonging and responsibility.
Clear, achievable, and specific goals.
Letting your employees feel you care.
Connecting employees to the company and its work.
Respecting employees and seeing them as sources of knowledge in their fields.
Positive reinforcement.
Developing employees' skills, investing in them, etc.
Valuing, stimulating and satisfying employees.
Responsibility, authority.
Delegation.
Empowerment.
Setting goals.
Meaning.
A developing, supporting, and enabling environment.
Consulting and appreciation.
Challenges.

Attitudes, Meaning, Valuation, and Feedback

Without taking away from the importance of each of the above definitions, I think they can be boiled down to four areas:

Attitudes

treating employees with respect as we would like to be treated. This includes the style of address and conversation with employees, as well as a respectful physical environment.

A dismissive attitude from management towards employees creates alienation and anger. Exactly the opposite of what is required to produce efficiently quality products or services.

I've often had people tell me they'd left well-paying jobs because of dismissive attitudes from management. One of the common ways to describe such attitudes is coffee: "you could never have coffee during your break. Either there was no coffee, or no sugar, or cups or no hot water"...

Meaning

give employees the sense that they are meaningful and important to the company and give meaning to their tasks.

Even seemingly simple tasks can be meaningful if we share with employees company goals, listen to their ideas about how achieve those goals in their own realm of work which they know best and share the results.

Many private companies treat sales (goals and achievements) and profits as top secret. But do publicly traded companies, which must share that information (and more) every quarter less successful?

In many companies I meet employees who don't even know what they produce. They only see a specific part and aren't familiar with the bigger picture, the final product. Or they're unaware of the importance of the service they provide to clients.

Responsibility

delegating responsibilities to employees is a very powerful tool for creating motivation.

Is it possible to delegate to every employee?

Of course. Remember the old (and true) saying that a chain is only as strong as its weakest link. Meaning, all employees have an effect, as part of the chain, on product or service quality.

Every employee must understand their responsibility, measure their work or have it measured, and receive respectful feedback.

Feedback, valuation and appreciation

we all want to be appreciated, or applauded, for our work. Every time we give employees positive feedback, we increase their sense of belonging and their motivation to receive appreciative feedback again. Written feedback increases the positive effect. This topic has been widely discussed on my blog.

Is There between Low-Tech and High-Tech?

The above definitions given by about 100 MBA students refer to all people, without a specific reference to people working in low- or high-tech industries. And yet some student claimed the above is only true about high-tech companies, and not about low-tech ones.

These claims (which, it seems, were voiced during the semester), were one of the reasons I was invited to talk to the class.

Among the reason for the supposed difference suggested by the students were:

Different forms of motivation.
Different environment conditions in production companies.
In high-tech companies – employees are creative.
Different rewards.
High-tech employees are more educated.
The characters of the employees.

Seventy thousand years after the development of language which allowed homo-sapiens to communicate and form societies, and five thousand years after the development of writing (according to Prof. Yuval Noah Harari's book, Homo Deus: A Brief History of Tomorrow), did the 30 or 40 years since the development of high-tech industries create a new kind of person? One different from the people working in low-tech industries?

Seems utterly ridiculous to me.

I've managed companies where employees (mostly new immigrants) had wide academic educations no less than those of employees in high-tech companies, and I've yet to meet a person for whom the motivating factors listed above were not meaningful and greatly influencing.

It seems to me that if there is a difference, it exists in the lacking understanding of some managers in low-tech industries who do not yet connect the written above with their employees' performance and the turnover in their companies.

Not too long ago I hosted a senior executive from a company in Denmark who told me, in a conversation about motivation, that the unemployment rate in Denmark is below 3.5%, and employers know that if they don't give employees fair working conditions and treat them with respect they will simply leave, and the company will struggle to recruit replacements.

In Israel, too, there is difficulty in recruiting employees in all fields and all levels of seniority, and in Israel, too, turnover for new employees is very high, unless the company succeeds in creating a bond.

I also recommend you read in Morton Mandel's book It's All About Who. His description of the revolution his management team lead in Phoenicia Glass Works in Yeruham, Israel, after purchasing the factory.

How to Measure Motivation?

People are the most meaningful advantage any companies has. Almost any machinery we might purchase, competitors can purchase an improvement on, prices of energy and capital are similar throughout the world, and all that's left is a company's ability to motivate its employees and create in them a commitment to company goals.

So, the influence motivation has is wide ranging, and in particular effects efficiency and quality.

But in most variables it is difficult to isolate the effect motivation has in order to accurately measure.

However, two variables are greatly influenced by motivation:

Turnover and absences.

We'll define turnover as the number of employees who left or were fired (for any reason!) over one year, divided by the number of over-all employees.

Of course it is also important to measure this variable during the course of the year, in which case it will be adjusted for the appropriate time unit. For example, if over two months 10 employees left, we'll multiply that number by 6 and divide it by the number of employees in the company.

If your turnover rate is higher than 10%, you have a problem and a fundamental change in the way your company operates is required.

Since turnover among new employees is, usually, highest and it is difficult to recruit them, I suggest you evaluate this sector separately and pay it focused attention.

Absences is one of the ways for employees to express their lack of motivation, when they don’t dare or are unable to leave.

We'll define absences as any that is not a pre-approved vacation, maternity leave, etc. unfortunately, we do occasionally all sick, so we'll look at the rate of absences due to sickness compared to the average (between 1% to 2.5%).

Summary

People are the most meaningful, and sometimes only, advantage we have against our competitors.

That is why employee motivation is so essential to a company's success and profitability.

The main factors which create motivation are: attitude towards employees, making tasks meaningful, delegation, and feedback, valuation and appreciation.

The most accurate variables to measure motivation are turnover and absences.

Some companies treat investment in employees as a luxury or a waste of time, while such investment quickly repays itself and often doesn’t require considerable expense.

However, such investment does require a change in attitudes amongst management and senior executives. Change is complex, and people are inherently opposed to it. Hence the difficulty in creating motivation in companies and organizations.

The subject of motivation is the focus of many articles on my blog.