How to Motivate Small-Business Employees

Good people are hard to find. In fact, they may be your biggest asset. Corporate America may be able to offer workers large salaries, big bonuses and other perks to attract and keep the talent, but you are running a small business and your pockets just aren’t that deep.
What can you offer to your staff without busting your budget?

You can afford to be flexible.

In many cases, employees will perform best for a boss who can accommodate their needs, whether that’s giving them an afternoon off to take care of a personal situation, re-arranging their work schedule so they can pick up kids from school, or allowing them to telecommute as needed, says John Challenger, head of outplacement firm Challenger, Gray & Christmas in Chicago.

So when it comes to energizing your staff, being small can be your best advantage. Here are five steps from SmartMoney.com you can use to engage your employees:

1. Communicate your vision
A boss at a small firm should explain the company’s missions and goals, preferably right when a new employee starts, says Jeanie Adkins, a rewards consultant at Mercer Human Resource Consulting in Louisville, Ky. Studies at larger corporations show that employees perform better when they understand the company’s vision, think the company’s mission is worthwhile, and think they can contribute to the success of the organization, she says. “Small businesses have perhaps an easier task than big ones because it’s easier to create that line of sight,” she says.

2. Acknowledge your limitations
Admit it: You may not be able to provide the same opportunities for promotion that a large company can. But, “what you can do is make sure employees are getting the mentoring, training and development that they need to build a career with you — or someone else,” Adkins says. While it sounds counterintuitive, offering an employee valuable (and marketable) work skills can reinforce good performance, she says.

3. Involve workers in special projects
Ask your employees to step away from their routine jobs and come up with creative solutions to customers’ problems, suggests Ron Wince, president of Guidon Performance Solutions, a Mesa, Ariz., consulting firm. That sends a message that you value their creativity, which in turns boosts their job satisfaction. “If you go into a company and all people do is punch the clock, you as a customer can almost always tell how the morale is in an organization,” he says. Once a month, invite a cross-section of employees to meet for a few hours and work on a particular issue, usually one involving customer service. Not only will you probably get some good ideas, but “the employee feels like they’re part of something,” he says.

4. Offer “add-ons” in addition to wages
Younger people, in particular, have grown up hearing catch phrases like “work-life balance” and value benefits such as child-care programs, flexible schedules, and even wellness initiatives almost as much as competitive salaries, says Pete Stoddart, a spokesman for Ceridian, a Minneapolis human-resources company. A small-business owner might not have the resources for formal programs, but can promise the flexibility to work with individuals in the event of major life events, such as the birth of a child, the death of a relative or health problems. And consider employee-assistance programs, which have come down in price and can be purchased by small businesses for roughly “a few dollars per employee per month,” he says. “It’s a very easy thing for a small-business owner to have in place.”

5. Get creative with rewards
At trucking company Admiral Merchants Motor Freight in Minneapolis, which has about 60 employees, human-resources manager Augusta Kirk has come up with an original (and relatively low-budget) rewards program called “Run to the Border” to encourage the office staff to exercise. Working under a $2,000 budget, Kirk doles out gift certificates to restaurants and sporting-goods stores to employees who agree to work out for 30 minutes, five days a week, for all of 2007. (Kirk says each work-out session equals about six miles, so by the end of the year, employees who stick to it will log 1,508 miles, roughly the distance between their office and the Mexican border.) “You definitely do have better-performing employees if they are more active,” she says. If an exercise routine doesn’t work for your staff, Challenger suggests something like an NCAA basketball tournament. “Rather than drive the pools underground, do it for free and give an award out to the winner,” he says.

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