Employee Motivation: The Ultimate Employer Guide

Employee motivation is a key factor in the success of any business. Afterall, your business is only as strong as your team, and if your team is full of unmotivated employees, you’re at risk of experiencing lower productivity and a decline in revenue. Motivated employees, on the other hand, make for a strong team. They’re more productive than their unmotivated counterparts and have higher employee happiness, engagement, and satisfaction. Understanding how motivation works can be a game changer for your business. Read on to learn how motivated employees benefit your business, how to measure motivation, and five ways to boost employee motivation in the workplace.

What is Employee Motivation?

Employee motivation is closely related to employee performance and engagement. Employee motivation is the energy, commitment, and enthusiasm employees bring to their role each day. In an ideal workplace, all your employees would be motivated when they come into work for their shifts. Motivated employees have higher productivity rates and go above and beyond to complete the job. If your employees aren’t as motivated as you’d like them to be, there is hope. Employee motivation is something you, as an employer, can positively influence with a wide range of motivational incentives.

Types of Employee Motivation

If you’re working to improve employee motivation at your business, it’s essential to understand the difference between the two types of motivation—intrinsic and extrinsic. Not every employee will be motivated by the same things, so it’s important to understand how motivation works and how you can adjust strategies based on people’s preferences.

Intrinsic motivation

Intrinsic motivation is when an individual is motivated internally. They’re motivated by their emotions—happiness, pride, and satisfaction push them towards their goals. When you’re intrinsically motivated, you do things because of the positive feelings completing those things gives you. Praise and positive feedback are great ways to increase motivation for intrinsically motivated employees.

Extrinsic motivation

Extrinsic motivation is when an individual is motivated by external factors. Extrinsically motivated individuals are motivated by rewards, recognition, prizes, bonuses, and even deadlines. For extrinsically motivated employees, employee of the month, incentive programs, and bonuses are great ways to increase motivation.

The Benefits of Highly Motivated Employees

No matter your business, you should strive to have a team with highly motivated employees. When your workforce is motivated, your business will experience benefits from that motivation.

Increased employee engagement

Employees who report high levels of employee motivation also report high levels of employee engagement. Employees engaged with their work are more likely to be productive and save their companies money. According to the Gallup employee engagement survey, engaged employees:

• Increase sales by 18%
• Increase profitability by 23%
• Increase productivity by 14%
• Increase organizational participation by 13%

There are three levels of employee engagement: actively disengaged (unhappy and intentionally causing issues at work), not engaged (checked out mentally from work), and engaged (works with enthusiasm). If you’re experiencing a lot of disengaged and non-engaged employees, finding a way to boost their motivation can help them re-engage at work.

Better job performance

Highly motivated employees are likely more productive and effective in their roles than unmotivated employees. Because they’re motivated, they work hard to reach their goals, focus on completing their tasks, and generally do what they can to help the business succeed. Motivation also plays a role in which employees are willing to take on more responsibilities—those who are motivated in the workplace will jump at the opportunity. At the same time, less-motivated people may shy away from added responsibilities.

Positive work environment and company culture

Think of motivated employees as your business’s biggest cheerleaders. They work to make sure there’s a positive, happy atmosphere in the workplace. They go out of their way to help team members feel safe and happy at work. And they go above and beyond for customers. Motivated employees feel connected to their jobs and the business. This positive outlook and driven nature can influence other motivated and unmotivated employees to jump on the bandwagon, creating a positive company culture with motivated employees.

Lower rate of employee turnover

The average annual turnover rate in the U.S. is 47.2%—nearly half of all American employees leave their jobs in any given year. With the price tag of replacing an employee sitting at approximately 30% of that employee’s first-year earnings, lowering your employee turnover rate is more important than ever. Boosting your employees’ motivation can help. Motivated employees tend to stick with a company longer than unmotivated employees. Also, motivated employees can help lower your employee absenteeism rates—employees who are motivated to work show up on time.

How to Measure Employee Motivation and Engagement

The first step in building a strategy to motivate employees is setting a benchmark for employee motivation and engagement in your organization. Because you’re dealing with how your employees feel, it can be tricky to decide how you’ll quantitatively measure motivation in the workplace. The best way to measure employee motivation is through employee surveys. You should already be using employee surveys to gather insights from your employees on all things related to your business and their employment. By adding questions measuring their motivation and engagement in the workplace, you can set your benchmark and repeat the questions when ready to re-measure. These seven questions are a great place to start when building your employee motivation survey. And remember, you can add a few questions to a wider-reaching employee survey—it doesn’t have to focus only on motivation and engagement.

1. How motivated do you feel when you’re at work?
2. How inspired are you by your long and short-term work goals?
3. How happy do you feel when you come to work in the morning?
4. How would you rate your overall job satisfaction?
5. Do you feel you’re contributing to the success of the business?
6. Does your manager recognize your contributions?
7. How stimulating do you find your day-to-day tasks and responsibilities?

Employee surveys should be scheduled into your calendar. Make sure you’re doing them often enough to stay on top of how your employees are feeling but not so often that you overwhelm your employees. Consider an annual or bi-annual larger format survey with employee pulse surveys every one to two months. An employee pulse survey is a short series of questions asked on a frequent basis to track responses to a specific issue over time.

How to Motivate an Employee

There are lots of strategies to improve employee motivation. Employees are individuals, so what works for some may not work for others. Getting to know your employees to uncover what motivates them is always best—a tailored approach to employee motivation is always the best choice. If you’re looking for a place to start, these five strategies are excellent motivation boosters.

1. Recognize your employees for their hard work

It may sound simple, but taking the time to recognize your employees for the hard work they put into your business goes a long way. Recognition is a great way to show your employees you appreciate them and to motivate them to keep working hard. A 2023 survey found that for 37% of employees, more personal recognition would be the best motivator for them to produce better work more often. An employee of the month program is a great way to recognize your employees for the hard work they put into your business. But it doesn’t even have to be as formal as that. Some of the common ways to show your appreciation to your employees include:

• Internal employee shout-outs for good work
• Celebrate milestones like birthdays and work anniversaries
• Give handwritten appreciation and thank you notes
• Say thank you when employees do a great job

2. Offer an employee incentive program

Employee incentive programs use extrinsic motivation to encourage employees to achieve specific goals to receive a reward. The rewards and program set-up can come in many different forms, but the best programs re-engage and motivate employees to become more efficient and productive. Incentive programs increase employee motivation, engagement, and productivity. They’re an excellent way to reach extrinsically motivated employees—the promise of a reward or gift will help spur them into action. Some of the common employee incentives include:

• Monetary bonuses
• Wellness initiatives
• Fun gifts
• Company swag
• Additional paid time off
• Travel incentives
• Meaningful experiences

3. Give your team autonomy

When you give your employees autonomy, you provide them with control over their time and energy. Whether you’re offering flex schedules, shift bidding, or simply letting go of micromanaging, giving your employees autonomy shows you trust them. And that trust and autonomy add to motivation and overall job satisfaction.

4. Work on your management skills

Regarding management skills, it’s important to be the best manager for your team. A good manager has a significant impact on employee motivation. When a manager shows employees they’re invested in their success and keeps open lines of communication, employees are more likely to be engaged at work and motivated to give their jobs their all. Hold one-on-one meetings with your employees and spend the time building positive relationships with everyone on your team. This is also an excellent way to learn what motivates your employees.

5. Ask for—and act on!—employee feedback

We discussed employee and pulse surveys, but one of the most effective ways to motivate employees is to ask them for feedback. You get the information right from the source by asking your team what would make work more meaningful. But for this to be effective, you’ve got to do more than listen to your employees. You must act on their feedback to capitalize on what motivates them. When you get feedback from your employees, give yourself a realistic timeline to make changes in the workplace.

Psychological Theories of Motivation

Understanding what drives employee motivation can benefit from insights offered by several psychological theories. These theories explain the different factors that motivate people and how these can be applied in the workplace to enhance employee engagement and productivity.

Maslow's Hierarchy of Needs

Abraham Maslow's idea is pretty clear: people have needs that range from the basic, like food and safety, to the complex, like feeling valued and achieving personal goals. In the workplace, this means we have to cover the basics before expecting employees to chase after bigger things like recognition or personal development.

Herzberg's Two-Factor Theory

Frederick Herzberg's theory splits things into two: things that make us happy at work (like achievements and being recognized) and things that stop us from being unhappy (like getting paid enough and having a decent work environment). Both are key to keeping everyone motivated.

Self-Determination Theory

Edward Deci and Richard Ryan's Self-Determination Theory tells us that feeling competent, having freedom in our tasks, and feeling connected to others are essential for real, inner motivation. Creating a work environment that supports these aspects can really boost how engaged and self-driven employees are.

Companies Excelling at Employee Motivation

Some companies really know how to get employee motivation right, which pays off in business success and innovation.

Southwest Airlines

Southwest Airlines stands out for its strong company culture. It keeps its team motivated with recognition programs, profit-sharing, and giving them freedom in their work. This approach not only boosts customer service but also the company's profits.

Google

Google offers its employees unique perks, allows them time for personal projects, and fosters a team-based environment. This strategy has made Google a go-to example of how to motivate employees, driving innovation and success.

Salesforce

Salesforce focuses on keeping its team engaged and motivated by rewarding experiences, encouraging volunteer work, and being transparent. Its "Ohana" culture promotes a sense of family and belonging, leading to high employee satisfaction and loyalty.

Barriers to Employee Motivation

Keeping your team on track and motivated isn't always straightforward. Overload and stress can sap energy and productivity. Without clear paths for growth or learning, team members may look elsewhere for opportunities. Mixed signals or vague instructions from leadership can cause confusion and drop motivation levels. A negative workplace, filled with drama or lacking in respect, drives good people away. When effort isn't matched with fair compensation or even a simple "well done," feeling undervalued is common. Addressing these challenges directly is key to creating a supportive and positive environment where everyone feels valued and driven.

Manager's Role in Fostering Motivation

Managers play a huge role in creating a workplace that keeps everyone motivated. By leading in ways that empower and support the team, they set the stage for everyone to do their best. Clear communication and constructive feedback are critical; they let people know what's expected and how they can improve, boosting their drive to succeed. Letting team members have control over their work and decisions gives them a sense of ownership and satisfaction. Recognizing and rewarding hard work shows them they're valued, pushing them to keep up the good work. And providing chances for professional growth shows you're invested in their future, which motivates them even more. Put all these elements together, and you've got a work environment where everyone feels appreciated and ready to give their all.

Give your Team the Tools they Deserve

Another great way to motivate your employees is by giving them the tools they need to make their job easier. With Homebase, employees can clock in and out for shifts, access on-demand pay, and easily access and make adjustments to their schedules. You can also recognize your employees' hard work in Homebase and send and receive employee surveys in the built-in team communication app. Get started today.