Do Financial Rewards Really Improve Staff Motivation? – Workshop Whisperer
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Do Financial Rewards Really Improve Staff Motivation?

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Do Financial Rewards Really Improve Staff Motivation?

How do you keep your employees motivated? How do you show them that their work is valued? Many auto repair business owners use bonuses or raises, and while everyone loves a little extra cash, motivating your team with money may not be as effective as you think.

Offering extra financial incentives can actually cause a decrease in quality, as team members cut corners to do whatever it takes to earn the additional cash on offer. It can lead to dishonest practices, arguments, and an overall decrease in productivity.
Does money actually demotivate us then?

The fact that there is little evidence to show that money motivates us, and a great deal of evidence to suggest that it actually demotivates us, supports the idea that that there may be hidden costs associated with rewards. Of course, that doesn’t mean that we should work for free. We all need to pay our bills and provide for our families — but once these basic needs are covered the psychological benefits of money are questionable.

We probably think too much about using money as a motivator and too little about other motivators. When used poorly, monetary rewards can feel like coercion, an effect you see in the classic carrot-and-stick approach to motivation. If we want to motivate our workforce, we need to understand what our employees really value — and the answer is bound to differ for each individual. The only way we can find out what these motivators are, is to ask!


Having a quarterly review with each team member is the best place to start. Simply have a conversation about the goals your team member has. How can you as the business owner help your team member to achieve those goals? Can you assist with additional technical, business, or management training? A more flexible working roster? Provide lunch? Can you set up salary sacrifice for your team members to assist them with meeting their cost of living or saving for their first home?

Here are my top 3 tips for helping you to understand team motivation:

1.Facilitate a sense of autonomy.Employees need autonomy and respect in order to feel motivated. When money is used as bait, it can undermine empowerment. In those situations, employees feel controlled and lose their self-motivation. A workshop that demands gruelling hours in exchange for quarterly bonuses might convince employees to do the work, but it will likely be lower quality.Instead, offer your employees reasonable freedoms, listen to them, and give them an opportunity to pursue and achieve their goals. Create a positive and pleasant work environment so you don’t need bait just to keep them coming into the workshop.

2.Use a variety of individualised rewards.Just as you need to tailor your management style for each employee, your motivational style needs to be tailored as well. Consider your employees’ values, tasks, and goals. The devil is in the details when it comes to incentives and motivation. Monetary rewards are not a one size fits all kind of thing.Remember, rewards are add-ons, not the whole package.

3.Focus on the means as well as the end. If getting a bonus is the primary goal, employees will start taking short-cuts. If the activity is an instrument to the reward, then they’ll try to do it as easily as they can.

As a leader, emphasise the broader goals, such as the company’s mission, and pay attention to how your employees reach their goals. Reward the people who embody your values most fully, and be clear that those are the behaviours you want to reinforce.

Enjoy your week!


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