Does your business struggle with unmotivated employees and high turnover? Are you concerned that if you were to try selling your business a buyer would object to your personnel issues?
Maybe you’ve even asked business brokers, CPAs, or consultants what you should do and you’ve been told that you need to provide higher salaries, bonuses, or other additional compensation.
Yet, if you do so, that may reduce profitability which will negatively impact business value.
Running a business can be difficult when employees aren’t motivated, and finding a solution that doesn’t compromise business value is important.
SHOULD YOU PAY EMPLOYEES MORE?
New research shows that if you listened to a business broker, CPA, or consultant who suggested paying employees more, you may have received bad advice.
While it is true that if people have too low of compensation they may be unmotivated, the research indicates that giving high pay or bonuses for better performance may not work.
Instead, what tends to motivate employees – at least for challenging, skilled work are: autonomy, mastery, and purpose.
Why AUTONOMY, MASTERY, AND PURPOSE are motivating factors
Autonomy is the desire to be self-directed. Providing a sense of autonomy can increase employee engagement.
Mastery is the urge to get better at something, and provides satisfaction.
Purpose – if separated from profit – gives meaning.
Take a look at this animated video discussing these issues by RSA Animate, Drive: The surprising truth about what motivates us.
How to Motivate Your Employees & maximize profit
Think about how you run your own company and what you do to incentivize performance. Do your employees feel a sense of autonomy, mastery, and purpose?
If you could benefit from more advice about maximizing profit, contact James M. Hillas, P.C. to make sure you’re running your business efficiently.