As a business owner, one of the best measures of your company’s performance is your bottom line. Now, the financial success of your company may have a lot to do with the performance of your employees, since they are the folks who make the sales, retain the accounts, or develop your next hit product. However, is it motivating to your employees to have their performance evaluated based on the financial success of your company?
According to a recent report published in the Harvard Business Review, this “make the numbers” attitude – especially when it is tied to bonuses and other incentives – is far from motivating for employees. In fact, talking about an individual’s performance as it pertains to your bottom line makes workers feel that they are simply a cog in the machine that is your company and that their only contribution to said machine is driving up revenue. In fact, the Business Review notes that “financial results are an outcome, not a root driver for employee performance,” citing a growing body of research that suggests that tying performance to your business bank account can actually decrease employee morale!
As our post-pandemic lives start to return to some degree of normalcy and businesses begin to get back to work, it seems only natural for owners to focus on the numbers. After all, Covid-19 has caused many companies to put business on hold or significantly stall growth simply to survive, so keeping a close eye on revenues to assess the efficacy of your return-to-work plan is certainly important. However, there’s a difference between you being interested in the numbers and you holding your employees accountable for the number.
Recognizing the importance of boosting employee morale and engagement post-pandemic, the smart folks at the Business Review recommend the following strategies:
Shift your focus
As we acknowledged above, financial performance is an important metric to gage the success of your business. However, it isn’t the only metric and often times isn’t even the most important metric. As such, experts suggest that you focus on a different aspect of your business and use that to drive morale. For example, some executives have found that looking at the impact that their company and its various departments have on the consumer experience can prove very motivating to employees. This metric can capture success metrics such as percentage of customers retained or average spending per customer but can also look at “softer” targets such as steps certain departments have taken to improve interactions with customers or develop a more consumer-friendly product that is getting rave reviews. When folks feel included in the dialog they feel more engaged and more motivated to keep up the good work.
Give them background
Providing a series of numbers is typically going to be insightful or even mildly motivating to those in your accounting department! If you do need to share financial numbers, share them with a backstory to help staff feel more connected to the data. If you had a period of growth, talk about the event or series of events that precipitated the change, including which departments or staff were involved, what their contribution was, and why it resonated so well with the customer or customers. In this way, you not only acknowledge your staff’s contribution to the boost, helping to reverse those “cog in a machine” concerns, but you also provide information on how you might replicate such successes in the future.
Resist the urge to forward
When the quarterly or annual reports hit the presses, it seems only natural to share it with your managers, who in turn typically dutifully share it with their team. After all, we’ve harped for years that transparency is key to forging trust with employees. Where there is trust, there is generally a relationship that breeds engagement and morale. However, one of the biggest roles of a manager is to draw the attention of their team to newsworthy information or at the very least, information that deserves a second glance! Piggybacking off the idea that numbers don’t mean much to folks if they are lacking context. We suggest that if you do feel compelled to share numbers, rather than forwarding along the whole report – or accompanying PowerPoint deck, you (or your managers) instead highlight a few metrics that will feel tangible to your employees. Further, any “forwarded” data should include information on how this information might alter the team’s daily behavior or even their long-term goals. By “filtering out the noise,” the Business Review notes that you can focus your team on the “two things that are 100 percent within the control of your team: their mindset and their behavior.” Again, we’re not suggesting that you stop sharing your financial data as it can be important to employees. Especially those that might be nervous about the longevity of your company given the pandemic-related economic downturn. Share the information in a way that is going to prove both more meaningful and more motivating to your staff.