How to Motivate When Pay Increases Are Small

Pay increases this year will again be small or nonexistent – below 3%.  Even top performers will get planned increases less than 3%. So, what can you do to motivate people?  The answer is, “plenty”.

A gazillion studies have shown that if pay is at a competitive level, non-financial incentive are MORE effective than financial incentives in engendering motivation and employee engagement.

Want examples of non-financial incentives?  Praise from an employee’s manager or supervisor, involvement with senior leaders on business issues, and the opportunity to be included in key projects are three of the most effective. 

Other key points:

  • Annual pay increases motivate no one.
  • If you give an unmotivated workforce more money, all you get is a wealthier unmotivated workforce.
  • Some say, “You can’t take praise to the bank.”  But neither can cash buy you work satisfaction – the kind that truly generates motivation. 
  • Praise is not a substitute for pay.  But pay is also not a substitute for praise.  Both are important.
  • People can understand that times are tough, and yes, they’re thankful to have a job.  But they don’t understand why managers can’t recognize and praise them for the work they are doing, especially when the workforce is leaner and people are asked to do more.
  • Too many managers and supervisors are deficient in the skill of providing praise.  Or their egos, need for power, or personality disorders cause them to not want to give praise.

Here’s what to do: 

  1. Get your managers out of their offices and talking to people.
  2. Give them training and role plays on how to do it.
  3. Start giving specific praise to a couple people or a group at the beginning of every meeting.  Work on making it a habit.
  4. Don’t confuse praise with flattery which is artificial and motivates no one to improved performance.

Bob Legge is a consultant and speaker.  He helps companies improve profits and increase individual and organization performance.  His clients have included Wrigley Chewing Gum, Wilson Sporting Goods, United Airlines, Mutual of Omaha, Paychex, Rochester Gas and Electric, Valeo, Adelphia Communications, Rich Products, American Hospitals Association, among others.  Bob can be reached at  Bob’s company website is

How to Build Stronger Accountability

The number one cause of poor strategy execution is the fact that managers do not understand their roles and decision rights.  The result is endless meetings and layers of approval, along with micromanaging, second-guessing, politics, and a weak connection between performance and rewards.  It breeds a non-responsive, bureaucratic culture; or is the result of such a culture.

Weak performers love this kind of culture because they don’t need to be accountable.  High performers can’t stand a culture like this.

It’s what Edward E. Whitacre, GM’s CEO, is up against at GM.  He recently told a group of his key executives to make the decisions about new car and truck plans instead of looking for his approval.

The top two reasons people aren’t held accountable:  1. They don’t know what they are accountable for, and 2. The organization doesn’t have an effective accountability process.

Other comments:

  • Accountabilities are results — NOT activities, skills, responsibilities, or behaviors.
  • People should be accountable for results and responsible for their actions.
  • Ask managers what overall results they are accountable for.  Chances are they will struggle to come up with an answer, and when they do start to answer they’ll talk about activities.
  • Most position descriptions end up being a list of 15-30 activities and are totally useless as performance planning, development planning, or performance evaluation tools.
  • Most managers don’t know how to hold people accountable.

Here’s what to do:

  1. Define the accountabilities for key positions.
  2. Implement an effective accountability process.
  3. Train or coach managers on how to use the process, and track results.

What’s Wrong With “Holding Their Feet to the Fire”

“Make people accountable.”

“Lay down the law.”

“Hold peoples’ feet to the fire.”

“Increase the heat.”

If there’s one big idea we learned from Alvin Toffler’s classic book Future Shock, it’s that when you overload people, the result is not better productivity. And putting on more heat won’t make it any better. 

Toffler’s point was this: When the demand exceeds the individual’s ability to handle it, the result is dysfunction.

It’s not that people shut-down, but they begin to exhibit dysfunctional behavior beginning with signs of stress and ending at the far extreme with suicide.

Stress is everywhere, and most people will perform at their best with some level of stress. But you’re fooling yourself if you think you can continue to run people hard. It will backfire.

There are far better ways to deal with increasing work loads and a lean staff.