The components of motivation

Individuals are motivated by a combination of:

• financial reward
• implied sanction
• self-respect
• non-financial reward
• recognition of value contributed.

The importance of each motivating component will be different for different people. Factors such as age, personal circumstances and social considerations all have an impact. Most of these differences, with one exception, need only subtle changes in your approach. The big variance is among the younger members of your team who are often disproportionately motivated by cash. You might think that everyone is but, over the next few pages, I’ll show you why that’s not quite true.

Show me the money – financial reward

A common mistake we all make on motivation is to assume that financial rewards are the most important and most motivating thing we can offer. The truth is – and this might be hard to accept because it is counter-intuitive – that money has very little motivating effect beyond a certain point. So long as the wage is fair, anything over that, such as special bonuses or massive cash competitions, has very little additional impact on employee motivation. People love getting it, sure, but it can even be counter-productive because the payment of large bonuses tends to condition staff to only ever put in extra effort if they can see a wad of cash in it for themselves. Pay too little, however, and money becomes an astonishingly important demotivator.

Those retailers with the most motivated workforces have observed that offering significant cash rewards in exchange for performance improvements has three negative effects:

• It drives too much focus into short-term revenue generation at the cost of falls in customer service quality.
• It conditions employees to only go beyond the job description when they are offered a cash incentive to do so.
• Bonuses become absorbed quickly into the employee’s general budgets and, as such, are not remembered over the longer term, thus losing motivational impact.

There is so much credible research that proves that cash triggers only very short-term satisfaction in the mind of the recipient. It boils down to cash being, by its nature, ephemeral – here today and gone tomorrow. I know you probably still don’t believe me, but this effect has now been observed time and time again. Money is important, but it doesn’t create long-term motivation. You might need just to trust me on this one.

Incidentally, you can measure employee motivation by looking at factors such as employee satisfaction, employee turnover rates and customer service quality scores.

The stick to your carrot – implied sanction

Implied sanction is the stick to your reward carrot. It is the rulebook. It’s “implied” because you may never have to use it, but the team knows you would, if pressed. It is “sanction” because it’s what happens when the list of minimum standards is not met. Implied sanction is a strong motivating factor, but one that requires significant skill to manage effectively. It takes a lot of common sense too, and certainly sympathy with the concept of treating others how you would like them to treat you.

A sales assistant, for example, needs to know that a drop in customer satisfaction will lead to a serious chat. Furthermore, they must know that the serious chat will generate a set of actions that, if not carried out, will cast serious doubt over their future in the team. That’s the sanction part.

The team needs to know that sanction is possible, but, at the same time, they must not be working in an atmosphere of paralysing dread of that sanction. It’s a tricky balancing act sometimes but much better than the alternative, which is to manage by fear. Management by fear generates lots of problems, such as decreases in service quality. Frightened staff don’t work well with customers. Fear can also lead to increased employee turnover and even industrial disputes.

In the 1980s, hard-bastard macho managers dominated retail management. Fear was a powerful motivator then because unemployment hung over pretty much everyone all of the time, especially in Europe. Times have changed and there have been retail vacancies going unfilled in the UK for some years now. Management by fear is a poor technique but we must recognise that we’re all human. A lack of sanction for those times when we let standards slip lets us become lazy. To motivate, you must ensure that the team knows you have set standards for a good reason and that you will maintain those standards vigorously.

Treat me like a grown-up – self-respect

The default position for the majority of workers is to do the best job we can. If you create the right conditions, most people will work hard to deliver a good result. What stands behind that reality is self-respect. I’ve already talked about how the best teams are built on respect, and self-respect is a crucial component of that. It’s what makes people feel like it’s worth making the effort.

The opposite is also true: put individuals into situations where they are robbed of their self-respect and they will react accordingly. People will steal and treat customers with contempt, and why not? If you take away a person’s self-respect, how can you ever expect that person to, in turn, respect your customers?

Without wishing to get horribly political, I’d like to ask you to take a look at what poverty and unemployment do to communities. Take away jobs, put people in shoddy housing they don’t own or ever could, then crime, drugs and malcontent flourish. The truth is that, if I don’t respect myself, I’m not going to respect you. You can do such a lot as a retail leader to encourage self-respect to grow among the members of your teams.

Here are some of the things you can do to foster a respect culture.

• Share information: tell the team the confidential stuff such as the state of the cash flow, company health, costs, losses and profits. Show that you trust them with such sensitive numbers. Some of it will find its way to your competitors, but the losses will be vastly outweighed by the benefits.
• Delegate power: allow team members to make decisions for themselves, especially on customer-facing issues such as discounts and resolving service issues. Give people the confidence to make these decisions by ensuring that you have a good set of practical and sensible guidelines in place. Good procedures help people to make good decisions. I’ve seen the provision of customer-delight budgets doing powerful good work when placed in the hands of people on the earliest rungs of the retail ladder.
• Delegate responsibility: in stores, make members of the team responsible for the performance of specific departments. Responsibility is a powerful source of self-respect, especially when combined with a variable such as profitability or sales revenue. In service centres, make individuals and small teams responsible for the satisfaction of their customers.
• Encourage training: make sure everyone who wants it has access to all the training opportunities available. Do so from the part-time shop floor assistant to the most senior directors. Make a habit of promoting manufacturer-sponsored training and seminars too. These are often of a high quality and they make a welcome break from the usual company formats. Make sure directors and heads go on this training too – they will sulk and moan about the value of their time, but hands on the product, while in the company of colleagues responsible directly for selling it, is insanely valuable. You are saying to the team members who go on these courses: “I value you and I want to give you access to skills you’ll find useful.”
• Share the good jobs: make members of the team responsible for specific tasks, especially those “cushy” jobs managers often keep for themselves.
• Muck in: if you expect the team to polish and dust, do it yourself too. Show that it is not a job that’s beneath you. Get out of head office and work in stores, call centres and distribution often – you will learn more here than in a week of consultant meetings and the people around you in those places will respect you more.
• Listen to both sides: when a customer complains, listen to both sides of the issue. If this is happening on the shop floor, don’t blame the salesperson in front of the customer. You are responsible for service quality, so you make the apology. Then go and talk with the salesperson and, if there really is an issue, give them an opportunity to suggest ways in which to solve it.
• Don’t wash your dirty linen in public (even if you run a dry cleaner’s): never embarrass or dress-down a colleague in public. I once observed a frustrated manager in Sainsbury’s having a go at a cleaner in front of customers. This cleaner had been skiving, but that didn’t matter, the manager ended up looking like a bully. That reflected badly on the shop.
• Consider the rulebook: is there anything really daft in the rulebook that just forces people to do stupid things? If there is, then get rid of it.
• Let others do the talking: give everybody who wants to a chance to run team meetings. Encourage staff to present ideas at these meetings too. Go with the three-slide rule to prevent meetings becoming too competitive or boring: one to set up the “what it is”, one to explain the “how it is” and a final slide to summarise “why it is”.
• Listen: shut up and listen to what people are telling you before you go making up your mind. Ask questions and allow people to give you the whole story. People respond better when they feel they are being listened to.
• Encourage every opportunity for feedback: get and give feedback on ideas, interviews, worries, suggestions and concerns. Do this in an honest, active way. Take things on board. If the answer to an idea or issue is yes, then get on and do it. If the answer is don’t know, go and find out what you need to know. If the answer is no, explain why. Offering a shrug and a “because it just is” is never acceptable. Always do these things within a short time frame. Anglo-French giant Kingfisher encourages a French employment tradition that it finds incredibly useful, which is to bring in new employees after three months and encourage them to give honest feedback – what doesn’t work, what do they miss from their previous employer’s culture, what do they feel is underrated?
• Build people back up: if you ever have to pull somebody up, discipline them or criticise their performance, then always build that person back up again afterwards. Leave people on a high. If, instead, you send them back into the fray feeling rubbish about themselves, that will show. Let them know that you believe they can fix whatever is under discussion, and that is the basis for making an effort to discuss it.
• Don’t badmouth people: every time you say “So and so is an idiot” in front of your team, you send a negative message about your attitude to colleagues. Negative talk infects your team – just don’t do it!
• Recognise contribution: learn to give specific praise as well as specific criticism. This is really very hard to do at first but is the most powerful motivating force of them all. Recognition is free and makes a real difference. By giving recognition you are giving person X a reason to feel that getting out of bed and coming to work today was worth it. The keys to recognition are to be specific, to do it as soon as you think about it, and to do it little and often.
• Celebrate success: absolutely essential to the strength of the team is making time, and plenty of it, to celebrate success. I don’t mean the embarrassing forced stuff such as ringing a bell every time somebody makes a sale. Celebrating success means saying “Well done” to people. It means making a small fuss of good things in the daily team meetings. It means going off for a pizza or a beer together. Toasting a hard-won target feels great. It feels even better if you’ve talked one of your suppliers into paying for the beer. People need to know that the effort they’ve put into achieving something had a point to it. Celebrating success is one critical way in which you can do that. It says: “I’m proud of us, we took on a challenge and we beat it together.” I cannot stress enough that you will gain many times more benefit from putting aside a proper budget for doing this.
• Be ready to admit your own mistakes: if you get it wrong, be honest about it and move on: “Okay, I got this wrong, now how can you help me to do this right next time?”
• Put the customer at the centre: show your people that you respect them by showing them that you’re all working together for the same boss: the customer (because it really is the customer that we work for). They are the ones who pay our wages. Teams need to have focus and in retail the customer is the best target for that focus. Everything you do must be built around the notion of helping customers to love buying from you.

The fun that is non-financial rewards

“Non-financial rewards” is just a name for the fun stuff. They can include all sorts of things such as extra days off, flash cars for a month, long-term product loans, gift vouchers, freebies and holidays. Now there is a really fine line here between exciting and tacky. It’s so easy to make rewards embarrassing. Worse, lots of retailers go for the big dramatic holiday-type incentives where only one person can win anything significant. Maybe the best-performing store manager gets to go to Bermuda for a fortnight.

I’ve often worked with clients, employing thousands of people, who have insisted on running these demotivating incentive structures. They launch huge incentive programmes worth big money but concentrated into maybe only five major prizes. Fantastic for the lucky five but really all this succeeds in doing is turning off the thousands who are pretty sure they won’t win. Worse, out of the 200 who think they are in with a chance, 195 high-achievers are left feeling positively demotivated when they don’t win that holiday.

When it comes to all motivating rewards, including cash bonuses, recognition and non-cash bonuses, little and often is best. In this case little because that means you can spread the budget much further and, in doing so, touch far more people. Often because it keeps things fresh and gives you lots of opportunities to boost performance without incentive programmes going stale.

It’s how you use the little non-financial rewards that is critical. If you are an owner of an independent store or site or a chain-store manager you have lots of freedom to do what you think will work best. Buddy-up with the manufacturer’s reps. Let them do some training at your site one evening and suggest they give the expense account a workout by taking the team for a curry afterwards. I’m always pleasantly pleased by how consistent manufacturers’ reps are in this regard. They always agree to it eventually. If you’re an owner you should be doing these things anyway, out of your own pocket. Incidentally, building in an ideas session before you eat is a good way of recouping the cost.

Don’t overdo it

The wrong way to use non-cash rewards is to over-hype the reward or to use inappropriate rewards. So, for example, offering to give someone a £10 Burger King voucher for doing 200% of their target is an insult to you both. Wrong too would be to make a shy person stand on a chair to receive a commemorative “Top Person” plaque. Use your best judgement and knowledge of the individual – what works for one might well turn off another.

Buy the team a daft gift each at Christmas but hand-write a thank-you note on each package, or at least get each section head to do so. It reminds people that they are important to you. Always generously mark people’s birthdays, weddings and new babies. Preferably do so out of your own pocket rather than via a staff whip-round.

Try to include your employee’s partners on social invites. Partners have a massive influence on your people and on their view of you. A career in retail features strange and challenging hours that take people away from their families. Don’t make that worse by extending this exclusion to the team’s social occasions. Getting partners involved in idea generation can be very effective too.

In-store dodges

If you are running a store, a good tip is to save any freebies you receive as a manager and pass them on to the team rather than keep them for yourself. Some managers save up these goodies to use in one go. Others dish them out straightaway. Either way, you must ensure that you don’t fall into either of the following traps:

• Only ever giving stuff to the loudest members of the team because they are the ones you notice.
• Showing favouritism to a person who the team could, conceivably, suspect you of having more than a professional interest in.

Here are two ways of avoiding these freebie pitfalls and at the same time bringing some fun to the proceedings.

Recognition and motivation

Each of the motivating factors we’ve gone through does in itself also have a recognition component. Giving out prizes is recognition, trusting somebody to make decisions is recognition and bonuses are also a form of recognition.

Team meetings

You have seen how important communication, team-building, recognition, respect and trust are. One of the most useful opportunities to make things happen in these areas is your daily team meeting. I did say “daily” team meeting.

I recommend you hold a 5 to 15-minute team meeting every single day. You don’t have to do this but all the best retailers do. It’s hard to build a team spirit if the team never gets to stop to spend a few minutes focusing together. Equally, what better way is there to swap ideas, jump on to opportunities and share responsibilities?

Although all management levels should do daily team meetings, they are critical in stores and often the missing ingredient in many an otherwise great store manager’s repertoire. If you are a store manager or owner, grab your store diary now and write five headings into tomorrow’s date and run a meeting around those five things. Some of the items worth covering in team meetings include:

• customer service issues and how these were solved
• forthcoming events
• promotions
• new products just in
• bargains identified
• review competitor activity
• review new best-practice ideas identified
• discuss incentive schemes
• review any challenges
• introduce new employees
• review targets and performance
• celebrate success
• recognition
• consider improvement ideas – even if you can only do this one it will have been worth having the meeting.

Please do this daily. I don’t mean to nag and I know shifts and part-timers and such mean you’ll need to juggle a bit but the effect is hugely positive. You’re a leader and you can only be that if you set down plans, review those plans and keep everyone bang up to date with what’s going on and what’s expected of them.