In these challenging times we look to protect profitability by reducing costs. It is important to avoid unnecessary expense.
However , there are three great ways to increase profitability without spending a penny:
1. Develop employees to the highest level of personal achievement
2. Recognise and appreciate good performance
3. Deal with negative influences
It is all to do with good leadership and employee motivation.
Contrary to popular assumption personal achievement – not money – is the number one motivator for most people. Don’t take my word for it. Studies, from the 1950s right up to today, show personal achievement and recognition as one and two in employee motivation, with financial rewards at number six.
Motivation makes money. An employee survey by a US retail chain revealed that the difference between the top 25per cent of stores and bottom 25per cent in terms of employee motivation equated to $100m of sales (Buckingham & Coffman 1999).
Good leaders invest in their people and give them the opportunity to fulfil their potential. Higher productivity almost inevitably follows. Whilst some financial cost may be involved, particularly developing management, some programmes are still government funded for example adult apprenticeships.
Recognition is largely intangible. It is about making employees feel valued. Saying thank you, writing notes of appreciation, praising publically and making small gestures of gratitude raise performance and help create a winning environment. Catching people doing things right!
Of course, for every action there is an equal and opposite reaction. Poor leaders look to save cost by reducing investment in the personal development of their people, and as sure as Sunderland will not win the Premier League this season, employees’ motivation falls and performance with it.
I’ve heard some leaders say “why should I thank someone for doing what they are paid to do?”. They rather miss the point. Why do we clap a singer who is paid to sing?
It is also the case that few problems improve with age. A recent study revealed that the biggest de-motivator was a negative experience with colleagues. Nothing can be more distracting or sap energy more than internal conflict. Nip in the bud any such problems or other negativity such as defeatist language or behaviour.
Take a little time to reflect whether your actions as a leader truly motivate your team to give you their best. Changing what you do as a leader may be all that it takes to see those profits rise.”
Note about the author
Paul Rutherford established sales leadership development in 2008 and coaches leaders to achieve high performance results. He has almost 40 years business experience and fulfilled several senior management positions in HSBC, leading teams of all sizes to outstanding success. Paul is a professionally qualified business coach having completed the ILM Level 7 Certificate in Executive Leadership Coaching and Mentoring. Paul moved to the area when appointed as Area Director of the bank for Chester and the Wirral in 2000. Though he subsequently took up senior positions in Leeds and London he continued to live in the area and his roots are firmly in Cheshire.
Member since: 10th July 2012
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