How to Keep Your Employees Motivated Without Pay Increases


Employee quality performance is critical to any small business. That is why it is a necessity to keep your employees motivated and happy.

While employees are motivated by pay increases, this is not the only (or even most important) factor in the overall morale and happiness of employees. Other features of your company culture and management style play a greater role in retaining your employees for the long term and preventing your company from going bankrupt due to unnecessary pay increases.

Motivated employees

Create a successful recruiting system

First, you need to develop a great recruiting system. I started a company called CRAVEBOX in 2014, which I still own and operate. I have hired and managed hundreds of employees over the years.

It is critical that you post an attractive job posting on a job site such as Indeed. Your job should have a competitive starting salary, a clear description of roles and duties, and perhaps photos or a website link so the candidate can learn more about your company and the position.

It is important to attract a lot of high quality candidates when you are managing employees because over time you can find great employees and let go of employees who are not a good fit for you. If you don’t have a path to many great potential employees, you could end up trying to please your current employees too much, offer too many unnecessary pay increases, or set overwhelming expectations on current employees.

With plenty of great options accessible through your recruiting system, you can manage your current employees with a clearer mind and give them the freedom to stay or leave as they please.

Make the task clear and simple

When training and directing employees, you need to present their roles and duties in a clear manner. Employees want to know exactly what is expected of them and when they do, they are happier and perform better.

I manage office workers and warehouse workers. The warehouse workers have a very simple job that only takes about 30 minutes to learn. They know exactly what to do and what is expected of them in terms of quality, speed and presence of their work. They are measured against those 3 metrics so they know very clearly whether they are doing well or need to improve.

The office workers have more complicated jobs that take longer to learn, but the roles and expectations of the jobs are still very simple and straightforward. We’re sharing a Google Sheets doc in Google Drive detailing exactly what they need to accomplish each week. So they know what my expectations are and when they complete all their tasks they know they have done a great job.

Employees don’t want to enter a disorganized environment where they aren’t sure what to do or how to do it. They want some structure and consistency. It’s no fun working for a company that regularly changes jobs or functions. So have a clearly defined job that remains consistent with well-defined tasks and roles.

Training session for employees

Provide adequate training and resources

Employees want to be able to do their job well. They want to feel effective and confident. To make this possible, you need to provide adequate training and tools.

You should have a structured training system in place so that when you hire the employee, you go through the steps to show them exactly how to perform their various roles. There should also be some aspect of written manuals or videos so that after completing the training, the employee has something to refer to if they forget steps in the process.

It might be best to just let them take their own notes while you show them how to do their various tasks. It is important to explain clearly and slowly and let the employee perform each function himself while you watch.

People learn much more effectively by doing something rather than just watching or listening. After they perform well while you watch, you should gradually let them work on their own, but you should still check their work regularly to check for errors and retrain them in those problem areas. Over time, you can back off and give them regular performance reviews, as you would any other experienced employee.

You should also give them all the tools needed to complete the tasks. This can be anything from a printer or scanner to software, logins and passwords, or even money such as a company debit card. If you don’t provide the right training and tools, the employee won’t be able to perform well, they won’t feel good about what they’re doing, they’ll get frustrated and you’ll likely get tense with them.

Offer performance incentives

It is essential to attract and retain motivated people, and a bonus or incentive program will do just that.

For example, with my warehouse workers, we give cash bonuses every week to the 5 fastest-speed workers for the week. This is great because it encourages motivated people to work hard, think of ways they can improve and compete to work quickly and efficiently. Not only does it improve their short term performance but it also improves their long term morale because they receive bonuses and they know management measures and appreciate their speed and hard work.

I offer an annual bonus to my office workers and the amount of that bonus depends on their performance throughout the year. It’s not as simple as measuring a certain metric, such as speed, for the office workers, so it’s up to my discretion to assess their performance over the course of the year. If you don’t provide performance incentives, great employees may feel that they are not valued or are not being fairly rewarded for their excellent work.

Get feedback on employees

Give great feedback

Providing frequent and qualitative feedback is so important to improve employee performance and maintain motivation. You should meet with employees at least quarterly to provide them with structured, written feedback on all aspects of their work. This is a great opportunity for you to recognize what they did well and respectfully point out where they can improve. You can also ask them questions to learn more about how they spend their time, what they like and dislike about the job, etc. It’s also a chance for them to ask you questions.

Without frequent feedback, an employee will not know how he is doing and will not feel appreciated for the hard work he contributes to the company.

Provide freedom and autonomy

Freedom and autonomy are more important to employee happiness than wages. You have to be able to clearly define the position, train the employee well and then let him perform it with his own approach.

I do not micromanage my warehouse or office workers. The warehouse workers know what is expected in terms of quality, speed and presence and if they get those metrics they can do pretty much anything they want. If they want to take a few minutes to text, call, or go for a walk outside, it doesn’t matter as long as their performance stats are met.

For my office workers, their weekly tasks are clearly defined in a Google Sheets file that we share and they can do it however they want. If they want to take a break and surf the web or have something to eat, that’s fine with me, I don’t watch them. So there has to be structure in the roles of the job, the training, the feedback, etc. but you have to give them the space and freedom to do their job the way they want. This autonomy will keep many great employees, because it is rare.

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