How to Incentivize and Motivate Your Star Employees

Three companies share what they do to keep key employees engaged, loyal, and on payroll.

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Diane is a writer, speaker, and human resource consultant with over 30 years of experience working in and covering employment and labor law. Before her writing career, Diane was a vice president of human resources for a major credit union. She is a certified senior professional in human resources (SPHR). Since leaving the corporate world, Diane has been consulting in human resources, speaking on employment issues, and writing on labor and HR issues for companies such as LegalZoom, Forbes, ADP, American Express, Delta Dental, Goodyear, as well as major law firms. She has ghostwritten many books and is the author of the soon-to-be-released book A Small Business Guide to Employment Law. See her work at dianefaulkner.com.

Good management makes for motivated employees

Gallup's latest State of the American Workplace study reports that only 21% of employees strongly agree their performance is managed in a way that motivates them to do outstanding work. Leaders want and need to know which incentives matter most to employees if they are going to get and keep them motivated to create and innovate.

"Employees don't expect to be offered every benefit and perk out there," according to the report, "but a handful of programs or amenities are important to them. The benefits and perks that employees truly care about are those that offer them greater flexibility, autonomy, and the ability to lead a better life."

What employees want

When it comes to money being a motivator or incentive, base pay does play a part. Employees want to be paid market rate for their talents. And the Gallup study found that 54% of respondents want to be recognized with monetary bonuses. But flexibility in work hours and where work is to be performed is hot on the heels of cash.

What companies are doing

Company leaders are listening to their employees and adapting as best they can with great results.

Jonas Bordo, CEO and co-founder of San Francisco-area based rental housing marketplace, Dwellsy, says he's always been careful to pay at levels that are fair and reasonable, but his experience running larger teams with outsized pay packages has shown him that focusing solely on pay rarely produces the desired results.

Bordo tries to motivate his employees by:

Giving star employees lots of responsibility and the independence necessary to prove themselves—and to risk failure.
Taking risks on people and give them the chance to get new experience and develop their skill sets in the ways they want to develop them.
Being strategic about assigning the highest priority/highest profile projects and tasks and ensures they go to the people who've proven they're worthy of the chance.
Finding ways to tie star employees into the success of the business.
Ensuring everyone works on being great leaders for team members, and deals with any bad management quickly and conclusively.

Gadget Review builds careers

Los Angeles-based Gadget Review CEO, Rex Freiberger, reports that "in addition to higher compensation, we also offer growth opportunities and assistance in achieving that growth as well as more flexibility when it comes to work schedules."

Freiberger hired his 11 employees "with the promise that they will have a career in our company if they want it. We offer an annual stipend for education, certification, mentorship programs, workshops, etc., all with the goal of advancing employees' skills and knowledge so they can continue in their career."

At Gadget Review, employees have publication guidelines and goals that must be met, but as employees gain tenure, "they're allowed much more flexibility with their hours and topics they choose. So far, the outcome for both [the career promise and the flexibility] has been very positive." The company enjoys a low turnover rate, and those who have left have done so to pursue other opportunities in other industries.

Qualigence International focuses on purpose

With COVID-19, Livonia, Mich.-based Qualigence International (QI), CEO Steve Lowisz says his company cannot afford to give raises or bonuses, but recognizes that "people who stay just for the money leave sooner than those who remain for a larger purpose."

QI focuses on engaging team members through other means. "I now spend more than 25 percent of my week leading leadership development classes for my internal team." Lowisz builds his business by building his people, and the result is "a more engaged team, evident in their commitment to mentoring others in the organization and offering to take pay cuts as necessary to keep the team intact."