Money Shouldn’t Be the Main Motivator for Your Employees
The following is adapted from The Problem Isn’t Their Paycheck by Grant Botma.
If every small business owner were to list the worst qualities of the worst employees they’ve ever had, I guarantee that all of them would have selfishness in common.
Managers who use money to motivate their teams contribute to creating a selfish culture, one in which employees don’t perform well. They look at the clock instead of seeing how they can better serve customers. They use the business simply as a means to get a paycheck, rather than becoming part of a team that works hard to make an impact on people.
Business owners with a money-motivating mindset don’t have self-directed employees who consistently take initiative and do whatever is necessary to innovate and create an awesome experience for customers; they have people who show up and do the least amount of work possible to keep getting paid.
In the long run, these business owners have a team of people who are not going to be there. Employees are going to leave this company and move on to the next that offers more money. Can you blame them? They took the job because of money, showing that they’re incentivized by money. If another opportunity comes up where they can get even more money, they’re going to take it!
This puts the owner in the position of trying to have the highest comp plan possible, and at some point, that’s just not going to work. They won’t be able to pay people any higher. There’s a limit to what small business owners are able to pay; their financials may not be the same as their competition. It’s been proven over and over again that money motivation is not sustainable.
But Grant, you may be thinking, surely there are some instances where money motivation works? Sure, for simple, straightforward tasks like manufacturing. If someone just connects widget A with widget B in an assembly line, money motivation will probably work better in this instance. But if you want a team of people to work on more complicated concepts or tasks requiring creative thinking — if you want self-directed employees with an ownership mindset — it will take more than money to motivate them.
Millennials, defined as people born between 1981 and 1996, make up the largest percentage of the workforce in the United States — and they leave their jobs, on average, every 3.2 years. That statistic may confirm negative thoughts you have about millennials. You may even think, “That’s why I don’t want to hire millennials!” But did you know that everybody else, the non-millennial employees who are the rest of the workforce, move on every 4.6 years?
It’s important for you, as a small business owner, to recognize that your team may stick around only three to five years before leaving to go work for another company, because you will face the high cost associated with finding new employees to replace those who leave. According to the Center of American Progress, it typically costs 20 percent of an employee’s annual salary to replace that employee. That means you’ll pay somewhere between $6,000 and $15,000 every time you have to make a new hire — and that cost doesn’t take into consideration the opportunity cost, the hours of your life, and the stress involved with filling the void left by the employee who quits.
The number one expense for most businesses is overhead related to employees. Way too many businesses are leaking money from their profit and loss statements related to either hiring and firing or employee performance as a whole. And that drain is frustrating. It erodes the trust you have in your team. It may even erode the trust you have in people altogether.
When you combine that cost with the experience of the other statistic we’ve talked about — that 88 percent of employees who are not working up to their potential — you see a team of people who are selfish, don’t give it their best, and do not genuinely care about your business. That eats at you. You pour so much time, energy, and effort — not to mention money — into this person, and as soon as they start to get good at their job and start to make you some money, they’re gone. You have to start over. At this point, you might be thinking, Why bother? It’s easier to just do it myself.
I’m here to tell you that you don’t have to do everything yourself. You don’t have to be stuck performing every task; you can work on what you want, when you want. And you have value. You can take your product, service, and business to a completely new level that will make a much bigger impact and give you a whole lot more joy.
For more advice on how to motivate employees, you can find The Problem Isn’t Their Paycheck on Amazon.
Grant Botma is the founder of Stewardship and the leader of its nationally ranked team of top producers. Thanks to a thriving company culture, Grant’s team has won numerous awards, including national performance rankings like “Top 1%” and “Top 100.” Grant’s leadership has also grown Stewardship to be an Inc. 5000 Fastest Growing Company In America. He lives in Arizona with his wife, Jodie and their three children, Cambria, Parker, and Ellenie. To learn more about Stewardship, visit moneywellrooted.com.
