How to Create a Workplace That Motivates Employees

It’s an age-old question and a $10 billion industry. Every year thousands of self-improvement books and courses are sold, and the most successful motivational speakers command tens of thousands of dollars per engagement. Yet leaders of companies both large and small continue to be frustrated by “unmotivated” employees.

One of the most common motivational management theories developed in the industrial age and still used is the “carrot-and-stick” approach. If you want to make more widgets, offer your employees a reward: the more widgets they make, the more money they make. If your employees aren’t making enough widgets, then dole out a form of punishment in order to motivate them.

The carrot-and-stick approach proved to be moderately successfully in manufacturing environments, so it soon spread and was widely adopted in other industries as well. In dealerships, this theory translated into “The more cars you sell, the more commission you make.”

Unfortunately, the carrot-and-stick motivational theory has been proven to be ineffective in industries outside of manufacturing. In fact, this approach demotivates employees more than it motivates them. In jobs that require creativity, abstract thinking and the ability to solve complex problems, success cannot be quantified in the same way that making widgets are. That’s because people are not all motivated by the same things.

As leaders, we are caught in a quandary of sorts; on one hand, it is our responsibility to motivate our employees. Yet we all know that an ideal employee is one who is “self-motivated.” So, do our attempts to use external forces for motivation even work?

The answer is yes: IF your goal is to create a work environment in which employees become self-motivated. In the best-selling book Drive, writer Daniel Pink identifies the three most important inner “drives,” or motivators, for humans:

1) Autonomy and Freedom

This primary motivator in all of us is simply the desire to direct our own lives. For employees, that means they want to have control over what they do, when they do it, and whom they do it with. Instead of managers setting goals for employees, let employees set their own goals. Managers can certainly set guidelines; goals must be achievable, verifiable and within the employees’ control.

Offering a reward to hit a goal is OK, but if the reward is purely monetary, employees often take the shortest route, which in some cases may be the “low road.” Imagine a salesperson with a goal of selling 20 cars per month. When a prospect walks in the door, the salesperson’s attitude is “How can I close this person right now?” instead of “How can I develop a good relationship with this person and best serve their needs, so they become a loyal customer of this dealership?”

I have also found that letting employees set their own work schedules is very appreciated. Some employees work 7 a.m. to 3 p.m., some work 10 a.m. to 6 p.m. Flexibility is key.

2) Mastery

This motivator is the urge to be good at something. In a work environment, the desire to get better at something at matters. Doing a job well gives people a sense of accomplishment and pride. To give your employees the opportunity to achieve mastery, break down goals not into dollars but into key performance indicators (KPI’s) that benchmark what it takes to do the job well.

Goals for employees should be related to attaining mastery in skills and performance, rather than sales targets and quarterly revenue goals. The goal of mastery engages people. Mastery does demand some pain, grit and deliberate practice to become better at something, so encouragement by team members, mentors and managers is an important aspect of this motivator.

3) Purpose

This motivator is the desire to be part of something meaningful and a yearning to work in the service of something larger than ourselves. As an emotional catalyst, wealth by itself fails to motivate most people, but the ability to take care of your family might be very motivating.

In your workplace, it’s important to identify what motivates your best employees and use that to motivate them. If time with family is important, offer a couple paid days off for a long weekend. If health is important, offer to pay for a gym membership.

Helping others by being involved in community projects is also important. Participation in meaningful projects is more satisfying for most employees than hearing that the sales team hit their quarterly goal or how much money the dealership has made this year. Dealers can also engage employees by letting them choose which community projects to be part of, like voting on a certain cause or fundraising campaign.

Another aspect of purpose is the joy of doing a job well as an inherent motivator. People like to solve problems and typically get a tremendous amount of satisfaction in being able to figure something out. The solution and recognition for the solution is the reward itself. If you are a manager, is there a problem in your department? Why not ask your employees for their solutions? A team with a common purpose and laser focus can solve just about anything.

These three basic drives–autonomy, mastery and purpose–are innate psychological needs for the majority of people. When these needs are met, we are motivated, productive and happy. Dealers who focus on creating an environment where these three primary motivators can flourish won’t have to worry about unmotivated employees for long.