Technique Tuesday: Ways to Motivate Staff: Monetary
Here’s Part 2 of our Technique Tuesdays blog on motivating employees. We’ll share what we’ve learned about using compensation and other monetary incentives to encourage high performance.
We start new employees above minimum wage by a certain percent, based on several factors such as the local job market and cost of living. We also want our base pay to reflect the fact we are seeking high caliber employees. They receive an incremental raise after six months and another one after a year—as they increase in knowledge they are more valuable.
Wages reflect levels of experience, trust and responsibility needed for a position. If the employee handles cash or customers they are paid a higher rate than if they work in a warehouse and deal with neither. In order of increasing compensation for in-store employees: Back room staff, cashier at a smaller store, cashier at a larger store. The larger store cashiers make more because they work both evenings and weekends, and have more experience; the smaller stores operate on one shift so they only work weekends, and have fewer staff to manage.
Our drivers are paid a higher rate because the position requires a license and experience. A forklift driver is not paid more since we provide the training and they don’t have to have a driver’s license (just the forklift license that we provide).
After the first year, employees then will receive an annual raise. We do performance evaluations and base the percentage increase on their performance over the year. We ask managers to include both positives and negatives in evaluations. If an employee had an issue addressed and corrected it doesn’t hold a lot of weight with their evaluation. Our raises vary from 3-10 percent depending on the employee.
We’ve tried various incentive programs, here is a sampling:
* A bonus program where the cashiers would get $5 in store credit for every appliance over $100 they sold.
*We like to give our managers a monetary incentive to improve their store. For managers: every month from the previous year that the store has a 1% increase they get $15. That goes up to 21 percent; over 21 percent they get $5 increase for every percent increase they have. If it’s a new store they base the number to beat on a similarly sized store.
* Kudos to employees who do exceptional customer service or stand out in their work: in store credit
* $1 bonus for every mattress stripped above the daily quota (40 per day base quota)
Curtis, one of our general managers, said he had a hard time having staff do the work the job required because they developed an expectation of getting in store credit for the general job, so they switched to giving an occasional in store credit if a staff member went above and beyond. He said you can encourage staff members to step up, let them know where the numbers are and what the goal is, and offer in store credit “bonuses” for staff members going above and beyond.
Compensation matters to performance and retention. We strive to provide living, fair and equitable wages to all employees.
More to learn:
Here’s an in-depth look at developing a compensation strategy for non-profits:
Motivated to learn more about motivation at work? Here are some great TED talks!