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More Than Praise: When Company Success is Employee Success

While scanning the headline news one day, I couldn’t help pausing to contemplate the meaning behind one article’s accompanying photo. In the picture, a protester is seen holding a sign with a simple expletive: More than praise… give us a raise!

Underlying that statement has been an evolving and growing struggle between many small business owners and their employees.

On one side of the equation stand the owners of small companies who are facing declining optimism, poor sales, and cash flow woes as reported in several recent studies such as the Wells Fargo Business Insight survey and the National Federation of Independent Business (NFIB) Optimism Index report.

In response to these and other pressures, countless small business owners have had little choice but to let go of workers, reduce or drop benefits, cut back hours, and freeze wages. Many have also sought low-cost ways to motivate the workers they are trying to hold on to – an effort that typically amounts to various forms of praise and recognition with little or no monetary value.

On the other side are the employees themselves, many of whom are struggling to get by even if they are technically receiving a paycheck. According to the latest  Associated Press-GfK poll, a fifth of adults worries about debt most or all of the time, and of those who made purchases on credit in the past month, more than a third reported they don’t plan on fully paying off the bill.

All this debt-related stress has likely been exacerbated by the fact that earned wages have either stagnated or gotten smaller over the past few years as the cost of food, fuel, and other life “staples,” such as health care have continued to climb.

That said, thank you notes, gift certificates, and other little tokens of appreciation, while they are certainly necessary, they may not be enough these days by themselves to foster employee motivation and loyalty as more and more American workers take up the daily struggle to make ends meet.

So what’s the answer to this dilemma?

Perhaps the best solution for both sides of the equation is the addition of performance-based pay incentives that are closely tied to the company’s performance and bottom line, such as offering employees a percentage of the revenues from any new accounts they help to set up, an employee bonus for ideas to improve quality or efficiency, and bonuses for high customer satisfaction scores.

Why would this stand a good chance of working? If employee goals are in line with company goals, then this form of increased compensation can be a simultaneous all hands on board call to action- especially if you open up these opportunities to all your employees, not just the top performers or senior members.

Employees will be more motivated to give it their best, to help both themselves and the company as a whole, and this could just be the boost a business needs to successfully ride out these difficult economic times.

Adam Gottlieb is a small business owner, freelance writer, and small business consultant with over ten years experience helping small and home-based businesses improve their image, increase sales and better manage their resources (both the animate and inanimate ones). You can find him blogging at The Frugal Entrepreneur and Growing Your Business

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  • Hi Adam, I’m in full agreement with you here but I think that thisu00a0 idea needs to also extend to goverment/public sector employess where productivity remains a non-priority 🙁

  • Anonymous

    Hi Adam. u00a0I recently has a good debate about this with an ex colleague. u00a0A person recently moved to a new company where he was struggling with the culture created in an environment where people where receivingu00a0performance related bonuses. u00a0He found that there was less of a team spirit as everyone was out for themselves tou00a0ensureu00a0they got a bonus. u00a0He found people less willing to share good ideas in this type of environment.

  • Adam Gottlieb

    Hi Frank,nWhile I can’t speak for your ex-colleague’s company, I think it really depends on how the bonus system is set up. If collabrative behaviours and attitudes are rewarded, then it shouldn’t result in such a competitive, everyone out for themselves cutlure.nnAdam

  • Adam Gottlieb

    Hi Niall,nnYeah, and not just productivity, but also real concern for the sector they were hired/or voted in to serve. I think though that in this case it would require more than just bonuses- especially in America.nnAdam

  • My sentiments would be similar to Frank’s ex colleague; if managed badly, that system could encourage a culture of politics, “me-feiners”, and double standards. nnHowever, if managed properly, and ALL employees were empowered to work together to build the company, it would encourage collaboration, self-responsibility and the want to help the organisation they are a part of.nnThe reality is lots of SMEs are struggling, and everyone is fire fighting, so I imagine it would be hard to implement, but certainly not impossible!nnIt just takes one to try, keep the momentum going, and honour their promises.

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