Spring 2006
Employee Motivation

The vast majority of today’s workers report they are overworked and underappreciated. This is partly because many retailers are not sure what they should be doing to create an environment where employees feel they’re appreciated and recognized. Here’s what you need to know about employee recognition and its impact on employee motivation and performance.

Recognition really works

The most validated principle of employee management (and we’re talking about thousands of studies here) is the simple notion that “you get what you reward.” If you systematically provide positive consequences to your employees for desired behaviors and results, you will get more of those behaviors and results. It’s that simple.

Studies prove that employee recognition also has an immediate positive impact on stress, employee morale, job satisfaction and increased performance. That translates into more sales and better customer service.

There’s also strong evidence that employee recognition has a direct impact on employee retention. Robert Half International, the staffing firm, found the number-one reason why people left their jobs was “limited recognition” for the work they were doing.

Similarly, The Gallup Organization found that the number-one predictor of tenure on the part of any employee is the relationship that person has with his or her immediate supervisor. In relationships that were characterized as “positive,” employees tended to stay in their jobs longer. In other words, for most of us if we have a good boss and a good job, we think twice about leaving it!

Finally, for those organizations that truly create a culture of recognition, their reputation as being an employer of choice becomes a competitive advantage in hiring and recruiting staff. Companies with cultures of recognition draw talent.

Effective recognition

Fortunately, the most effective forms of recognition cost little if anything and are within the grasp of any motivated manager. Here are the top categories of recognition workers say they want in study after study:

  • Support and involvement How well do you provide the information to employees that they need to do their jobs? How well you involve employees when making decisions? How well do you support your employees when they make mistakes? These are all aspects of support and involvement. Employees want to know how they are doing in their jobs and how the company is doing in its business. Involving employees is both respectful and practical: you increase their commitment, make it easier for them to complete their work, and encourage them to implement changes and adopt new ideas.
  • Personal and public praise It only takes a few seconds to thank someone for going above and beyond by helping a co-worker or staying late until a project is completed. If your thank-you is immediate, sincere and specific, it will be on the mark in making your workers feel valued and appreciated—and will increase the chance that they will repeat the behaviors you noticed. And if it’s done in front of co-workers, all the better.
  • Autonomy and authority Most employees value being given a chance to do their work as they see fit. Do you allow employees to decide how to get a job done, give them increased job autonomy and authority once earned, and allow them to pursue their ideas or give them a choice of assignments, when possible? These actions allow autonomy and authority to flourish—and provide powerful motivators to workers.
  • Flexible working hours Time is the new currency for today’s employees. They expect work to be an integrated part of their lives, but not their entire lives. Given that 83 percent of employees report wanting more time with their families, allowing greater work flexibility, where possible, can be a great motivator. Using time off as a form of reward—whether it’s an hour, an afternoon, or a full-day—is another way this need can be met.
  • Learning and development Most development and learning occurs on the job from new opportunities, new challenges and chances to gain new skills and experience. Do you support and encourage employees to learn new skills? Do you allow them to take on new tasks, discuss what they’ve learned after the projects are completed and explore continuing career options within the company? If not, now is the time to start!
  • Manager availability and time Are you available to address employees’ questions and concerns? Do you take time to get to know your employees and listen to their non-job issues? Being accessible to employees is critical for building lasting relationships with your workers. Remember, you can’t be open and receptive with a closed mind!

Note that the recognition options discussed so far involve little or no financial cost. Also note that there has been a shift from formal to more informal forms of recognition being the most desired by today’s employees. Capturing the moment and thanking an employee in the here-and-now is more important and meaningful to most employees than a formal award presented at the end of the year.

This is why “employee of the month” programs are so ineffective. Seldom are such awards timely, fresh and relevant to the employee who is supposed to feel honored. Today’s motivation comes more from the personal and timely actions taken within interpersonal relationships than from any formal program.

No- and low-cost methods

As entrepreneurial operations, specialty retail businesses have the ability to be flexible and spontaneous. Because employees need to wear multiple hats, take initiative and act on ideas they have to improve service, cut costs or streamline processes, there are enormous opportunities for employee recognition.

Here are a few examples of effective and low-cost recognition methods used by larger retail firms, methods that easily can be adopted by smaller, more nimble retailers:

  • Crate & Barrel store managers in Houston, TX, started a program for their associates involving a “surprise hour off.” Once a week, each store manager would pick a sales associate, and take his or her shift on the floor for an hour, saying, “You’ve been working hard, and I appreciate it—take an hour off and come back refreshed and ready to sell some more.”
  • When he was CEO of Smart & Final, a Los Angeles-based operator of more than 245 food and foodservice supplies warehouse stores, Rocky Laverty awarded “Rocky Dollars” for outstanding performance to employees. The award consisted of a silver dollar mounted on a certificate, presented personally by the CEO, with public congratulations. Under Laverty’s leadership, Smart & Final grew to more than $1 billion in revenue and subsequently went public.
  • At Claire’s Boutique in Wooddale, IL, district managers reward store managers for the highest sales by filling in for the store managers on a Saturday so the manager can have a day off. The regional managers also present simple trophies to district managers in recognition of their achievements.
  • As a result of its commitment to a more balanced work life, employees at clothing outfitter Eddie Bauer can “call in well.” The company’s Redmond, WA, store has even created Balance Day, an additional day off for all employees.
  • A Gap manager who wanted to thank everyone for working hard to meet a big deadline gave everyone gift certificates to a spa for a facial or a massage.

Aligning goals

A recognized and valued employee can be given more responsibilities. But the key is to be sure those additional responsibilities are in line with where the employee wants to go.

If the foundation for your relationship with the employee has been to learn about them, their interests and goals, where they want to be five years from now, you can keep the employee in mind for assignments or opportunities that can help him or her reach those goals. If, on the other hand, you give an employee two new projects because that employee was the first to finish the previous project, this may not seem like a reward to the employee—it might seem like just more work!

People are the most important asset in your business, so it’s important to show them that you value them and the work they are doing. The most-valued forms of recognition are those that show a basic trust, respect and appreciation on the part of the boss. The boss’s actions might be small, but the cumulative effect is significant: Workers enjoy their jobs better and do a better job as a result. A sense of team spirit and pride pervades and success and sales escalate.

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