Money makes the world go ‘round, as they say, and ultimately every company’s goal is to turn a profit. But are helping to hit financial targets really enough to motivate employees to do their best work?
Many experts agree that employees need more than metric-based targets to truly feel a sense of buy-in at their organizations. But if that’s the case, why do so many leaders make financial gains the focus of their communications with their workforce? As Lisa Earle McLeod and Elizabeth Lotardo write in Harvard Business Review, “financial results are an outcome, not a root driver for employee performance.”
Talented, ambitious people want to feel like their contributions are making an impact. At my company, Jotform, we build web forms that make our customer’s lives easier, freeing up countless hours they can instead use to do something else. Sure, we’re not curing world hunger, but I try to give my teams the freedom to work toward our goal — making a great product — in whatever way works best for them, while encouraging their growth and creativity along the way.
It takes effort to move beyond financial metrics and help employees see the other ways in which their work is valuable. But the result — having more engaged teams with a real stake in their work — is well worth it.
Keep the financial talk to 50 percent
When you’re leading a company, it can be hard to keep talk of financial output from leaking into every conversation you have with your team since it’s so often at the forefront of your mind. Even so, it shouldn’t dominate all of your airtime. McLeod and Lotardo recommend a 50/50 split, with no more than a half of your communications spent on metrics and deliverables, and the other half building belief in the impact of the work.
Rather than focusing solely on financial results like his predecessors, Blackbaud CEO Mike Giononi began using his town halls to talk about the impact the company was having on customers. The result was a demonstrable increase in customer empathy and value, says Blackbaud President and GM Patrick Hodges. “Over time, your attrition goes down. When people feel good about what they do and they’re more successful, they’re not going to look for another job.”
Within six months of Giononi’s script flip, Blackbaud saw an important innovation breakthrough, more employee engagement, market share increase, and revenue growth.
In order to be successful, it’s imperative to get every member of your team behind the organization’s vision. But that doesn’t mean telling them how to do their jobs.
Girish Pancha, CEO of StreamSets, maintains that a good leader anchors the company’s vision in the “why,” but leaves the “how” up to his or her employees. This is because dictating how a job should be done can force an employee to think in a way that clashes with their instincts, which risks stifling creativity.
“Once you specify the method for attaining success, you are taking responsibility for the success of someone else, who is actually implementing the how and getting the job done,” he writes.
Research confirms this. Of the 560 employees polled for Deloitte’s Talent 2020 report, 42 percent of respondents looking for a new role said they felt their current job didn’t make good use of their skills and abilities.
At Jotform, I make sure to clearly communicate the company’s vision on a regular basis, particularly as it evolves. Ivy Exec CEO Elena Bajic put it well when she said,
While the vision for Ivy Exec is mine, I cannot make it a reality on my own. I need the understanding, buy-in, and the enthusiasm of my team to work together collectively to take the company forward, and everybody’s favorite word, ‘scale.’
Instead of stepping on your employees’ toes, foster an environment where they can take ownership of their work. People who feel like they’re adding value to an organization feel a personal investment in its success, and are much less likely to pursue opportunities elsewhere.
Satisfied employees are motivated employees
It’s straightforward logic: Employees who are fulfilled by their jobs will ultimately be better employees. One HBR survey of more than 19,000 people across a range of industries found that “people feel better and perform better and more sustainably when four basic needs are met: renewal (physical); value (emotional), focus (mental) and purpose (spiritual).”
Striving to hit financial targets alone feels abstract and impersonal. But employees who know their work is having a direct, positive impact are motivated to succeed. In one study, call center employees tasked with soliciting donations from alumni were divided into two groups: The first called potential donors as usual. The other group made their calls only after having a short conversation with a scholarship student who was able to get an education as a result of the donations the call center was soliciting. After a month, the employees who had spoken with the scholarship recipient spent twice as many minutes on the phone, and brought in significantly more money, averaging $503.22 per week, up from $185.94.
Knowing the work we’re doing matters not just on an organizational, but personal level, makes all the difference.
Keep employees in the loop
Among companies who have effective performance management strategies, 91 percent say that employees’ goals are linked to business priorities. This is because employees are more effective if they understand how their individual goals fit into the bigger picture.
And employees should have a hand in establishing those goals: According to Gallup, employees who are included in the goal-setting process are 3.6 times more likely to be engaged than those who are not.
While setting goals with employees, focus on making them SMART: Specific, measurable, attainable and relevant. Sticking to that criteria means that goals are clearly defined, but the fact that they’re also conceived collaboratively means that employees will have a sense of ownership in achieving them. Setting stretch goals can also help push performance and create the motivation to grow.
Hitting financial targets are indisputably important for a successful business. But when you have employees that care about the company’s mission and personal investment in seeing it through, the money is far more likely to follow.