How to motivate your employees beyond pay
Launching and running a startup is, like much in life, a balancing act between cost and benefit. The risks are high but so are the rewards if you get it right. The same is true for candidates when they analyse whether the rewards justify the risk of joining. It also applies to your team when deciding whether to continue to invest time and effort in an early-stage business.
As we remind founders, people are integral to your identity as a business. How you motivate and develop them as people and professionals defines the company you’re building. It also defines the identity, and whether it’s a success. We get the opportunity and privilege at the People Collective of seeing, from the inside, how various startups approach this.
We’re going to focus on the task of developing and executing a strategy by using financial and non-financial rewards.
Your system should aim to contribute to a positive employee experience accounting for their needs while recognising the constraints of your business.
Where do I start?
To develop a reward strategy, you need to understand the motivations of your team. Human motivations are made up of both extrinsic and intrinsic factors. Extrinsic motivators are driven by our desire to achieve a result, a reward, or avoid unfavourable outcomes. Intrinsic motivations are driven by our internal needs and drives, regardless of the reward.
Start with some basics questions:
- What interested them in the company and why did they decide to join
- What makes them happy and engaged at work
- What frustrates them
- What drives them to achieve great things
How you ask these questions varies, but ultimately getting a picture of your team’s motivations and analysing the themes will help you understand your current position. It also helps you when building a plan of what needs to change and where you must be.
What’s your current ‘offering’?
For your attention span and the word count, we’ll ignore pay for now. Check our previous post How To Build A Stress-free Reward Plan to learn more. Instead, we’ll focus on other areas that tap into other areas of extrinsic and intrinsic rewards.
Benefits and Perks
Benefits and perks are there besides, not in replacement of pay. They prove you are meeting the necessities of your team through pay but also that you want to create an offering that considers their development and well-being. Below is a table to get you started on the specific categories:
Pension
Office location
Wellness schemes
Tools & technologies
L&D budgets
Flexible working
When reading this, you must ask yourself some honest questions. Is what you offer today attractive? Will it help get initial commitment with candidates when they are considering whether to join? Some good questions to ask:
- Do people really value them?
- Have you asked what people really want from their benefits package?
- Can you be more flexible?
- What can you do with your current budget?
It’s all about the mission, right?
While pay, benefits and perks are an essential lever for getting commitment from new hires, there also needs to be a powerful reason for people to remain motivated to achieve great things. The mission, vision, team, culture and development opportunities are the most important reasons for joining a startup; you must be clear about how they allow you to operate at work. To offer something that people will believe in, it needs to be authentic and based on reality, not your wishlist.
- Team Culture: Values-led, inspirational leadership, colleagues
- Vision & Mission: Identity & purpose, company strategy, goal setting process
- Professional Development: role & career growth, mentoring & coaching, performance reviews & feedback
To offer something that people will believe in, it needs to be authentic and based on reality, not your wishlist.
Good questions to ask:
- Do people understand our mission and vision?
- Which of our values do we consistently live and what’s aspirational?
- Have we provided the structure and support for people to grow?
- Are we clear about our expectations of the team?
Your own confidence about your offering does not mean that it works for your team, and their feedback will be essential throughout.
The disadvantage of this approach is that you won’t be able to please everyone. What you can ensure is a transparent and explainable methodology behind it. Some useful considerations to remember:
- Is this an equitable way to reward people for their contributions?
- Are the rewards easy to understand and accessible?
- Do we communicate our offering consistently from the recruitment process through to the way we develop our people?
You will want to identify areas that need immediate attention and improvement. A useful technique to prioritise is the ‘Start, Stop and Continue’ method.
This will provide the path for your People plan moving forward and help to evolve your offering.
Be transparent
Your offering may be market-leading, but if it’s not embedded into your People practices and process, then you’ll suffer from disengagement and build up People Debt.
Be transparent about the type of company you’re trying to build and how you want to reward people for their hard work and contributions. Embrace feedback, allow yourself to be challenged and be open to refining your approach. Effectively balancing what your company offers to those who take a risk on you ensures greater retention, saving you money. By listening to your team, you can also build a high trust environment which will allow people to thrive.
Organisations with a high level of trust achieve 50% greater productivity than those without, so you cannot afford not to do it!
To sum up, all of this clear planning means that you can address the smaller problems before they become bigger ones and ultimately build a sustainable company with far stronger foundations.
Who wouldn’t want that?
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We’re the People Collective. We design and build organisations to scale. If you need advice or dedicated support to develop your reward strategy or other areas of your employee experience, we are here to help. Book some time here and let us know how we can help.
