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How do you motivate and reward your small business employees?

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As a small business owner, you know how important it is to motivate and reward your employees. They are the backbone of your success, and you want them to feel valued, engaged, and productive. But how do you do that without breaking the bank or creating resentment among your team? Here are some tips to help you design a motivation and reward system that works for your small business.

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1 Know your employees

The first step to motivate and reward your employees is to know them as individuals. What are their goals, interests, preferences, and needs? How do they like to be recognized and appreciated? What motivates them to perform well and stay loyal? You can find out by asking them directly, conducting surveys, observing their behavior, or using personality tests. Knowing your employees will help you tailor your rewards and incentives to suit their preferences and values.

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2 Set clear and realistic expectations

The second step to motivate and reward your employees is to set clear and realistic expectations for their performance and behavior. You need to communicate your vision, mission, values, and goals to your employees, and explain how their roles and tasks contribute to them. You also need to define the standards, criteria, and indicators of success, and provide regular feedback and coaching. Setting clear and realistic expectations will help your employees understand what is expected of them, how they are doing, and how they can improve.

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3 Offer meaningful and varied rewards

The third step to motivate and reward your employees is to offer meaningful and varied rewards that match their achievements and efforts. You need to balance extrinsic rewards, such as pay, bonuses, benefits, and perks, with intrinsic rewards, such as recognition, praise, autonomy, learning, and growth. You also need to diversify your rewards and offer different types of rewards for different types of accomplishments and behaviors. For example, you can reward individual performance, team collaboration, customer satisfaction, innovation, or loyalty. Offering meaningful and varied rewards will help your employees feel appreciated, motivated, and satisfied.

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Craig Fry

Small Business Bookkeeping and Fractional Controller
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When I managed a small business we implemented the game of work. It was a consulting arrangement but the basis was work should be just like playing sports. In sports players get immediate feedback from a coach on how they are performing. Work should be the same way, as employees are performing well they should be congratulated, pat on the back or some other simple method of feedback

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4 Involve your employees in decision making

The fourth step to motivate and reward your employees is to involve them in decision making and problem solving. You need to empower your employees to have a voice and a say in matters that affect them and their work. You can do this by soliciting their opinions, suggestions, and feedback, by delegating tasks and responsibilities, by creating self-managed teams, or by implementing participatory management practices. Involving your employees in decision making will help them feel respected, trusted, and engaged.

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Courtney Ball

Chief People Officer | Host of "Serve It & Own It: Leadership Lifestyle" podcast
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I immensely value my teammate's opinions, especially because they possess an expertise that I don't. My marketing lead and web designer have helped me grow my company because there's an understanding that I respect their expertise and they accept my vision for the company. I lean on their expertise and experience to execute my vision, and in return, I'm giving them experiences to add to their resume and career trajectory.

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5 Create a positive and supportive culture

The fifth step to motivate and reward your employees is to create a positive and supportive culture in your small business. You need to foster a culture of respect, trust, collaboration, communication, and fun. You can do this by modeling the values and behaviors you want to see in your employees, by encouraging teamwork and cooperation, by providing opportunities for social interaction and bonding, by celebrating successes and milestones, and by addressing conflicts and issues constructively. Creating a positive and supportive culture will help your employees feel happy, comfortable, and loyal.

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6 Review and improve your motivation and reward system

The sixth and final step to motivate and reward your employees is to review and improve your motivation and reward system regularly. You need to monitor and evaluate the effectiveness and impact of your rewards and incentives, and solicit feedback from your employees on how they feel about them. You also need to adjust and update your rewards and incentives according to the changing needs, preferences, and expectations of your employees, as well as the market conditions and industry trends. Reviewing and improving your motivation and reward system will help you keep your employees motivated and rewarded in the long run.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you motivate and reward your small business employees?

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1 Know your employees

2 Set clear and realistic expectations

3 Offer meaningful and varied rewards

4 Involve your employees in decision making

5 Create a positive and supportive culture

6 Review and improve your motivation and reward system

7 Here’s what else to consider

Small Business Management

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