For The Manager: What works when it comes to employee motivation

One size does not fit all

The second key to remember is that employees are individuals and therefore not all motivated by the same things. You know this is true of your customers, and it also applies to your employees. Also, people can be motivated by different incentives at different times and under different circumstances. For example, someone who seeks monetary rewards one year may crave recognition another year. Since one generic solution rarely motivates an entire group, it's best to offer your employees a menu of incentive options rather than one generic solution.

I encourage agency owners and managers to ask their employees how they would like to be compensated. Their answers may surprise you. Some producers have responded that the best way to inspire them to increase their sales is not to offer more money, but rather better products and services, less paperwork, better job titles, or ownership in their books of business. Staff members have indicated that better procedures, more compliance with those procedures, improved information systems and additional training would motivate them. These are great ideas, and implementing them would help make an agency better, too.

Share the vision

Another way to motivate agency employees is to share the agency's plans. Many employees I have surveyed over the years have said they do not know where their agencies are headed. In such situations, no carrot of any size will have much effect. Employees need to know where the agency is going, if they are to help it along.

General Patton's rule

Gen. George S. Patton summed up the next rule best when he said, "Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity." I have found that successful agency managers follow this advice. They work with their employees to set goals, solicit the employees' input about the resources needed to achieve the goals and provide those resources (within reason, of course). These managers then let the employees figure out how to accomplish their goals.

When setting goals, remember that they must be achievable, desirable and realistic. A good "bad example" is an insurance company setting 20% growth goals for their agents during a soft market. In most cases, setting such a goal just isn't realistic, and agents won't think it's worthwhile to even try to achieve it, although it may give them a good laugh. Don't do that to your employees.

A benefit of including employees in the processes of setting goals and determining the necessary resources is that they become a partner in achieving success. When agency managers independently set goals, employees may lack confidence that the goals are achievable, desirable and realistic. Without such confidence, it is easier for them to dismiss the goals. I see many agency owners giving their producers and staff members third, fourth or 20th chances to improve their performance. On the other hand, when employees are involved in goal-setting and given control over reaching their goals, the agency managers'–and the employees'–belief in the goals is much stronger, and their confidence can provide the desire and commitment necessary to achieve success.

Rewards and risks

Consider the risk/reward factor and carefully match the reward to the achievement (or risk). If the agency is simply asking employees to do their jobs-for example, processing an average number of activities per day-an award probably is not warranted (although there might be a penalty for failing to achieve a predefined goal). However, if employees are asked to perform an extraordinary task, like completing a big conversion in record time, then an extraordinary reward might inspire them to put forth the extra effort needed to reach the goal. Offer big rewards for big achievements.

The risk/reward factor can have the opposite effect, too. Much has been written about the theory that money is not a great long-term motivator, and its effect can be the opposite of that intended when a miserly bonus is paid to an employee doing a great job.

Minimum standards

The risk/reward factor presumes that monetary rewards motivate all employees, but that is not true. I have seen agency owners offer huge sums to producers and CSRs to get them to produce, all to no avail. Sometimes no carrot, no matter how big, will motivate some people. Therefore, I recommend that all agencies establish minimum performance standards for all positions. People who do not meet such standards may simply be in the wrong job, industry or agency, and they might perform much better in a different situation. In such cases, ending the employment relationship usually leads to a win-win outcome for everyone. Almost every producer fired by agencies with whom I have worked went on to find a more rewarding vocation. Those producers would not have made the move, however, of their own volition.

Peer pressure

Peer pressure in the right environment can be the best motivator. The U.S. Army conducted a study to determine why so many soldiers were willing to lay down their lives in World War II. Their conclusion? The soldiers did not want to be perceived as "chickens" by their buddies. Similarly, good salespeople are competitive, and peer pressure can be highly effective in motivating them and other employees as well. A study cited in the Wall Street Journal many years ago noted that most salespeople would rather make a sale and lose money than lose a sale and make more money–the epitome of competitiveness. How much peer pressure do your salespeople feel to make a sale?

How are you going to motivate your employees? Let them tell you what they want. Focus on creating the right environment. Share the agency's direction, include employees in setting reasonable goals, be open to constructive criticism, follow through on your commitments, and make sure everyone knows what must be done, by whom and by when. Then get out of the way and let your staff surprise you with how innovative they can be.