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MOTIVATION IN SMALL BUSINESSES

Author: Richard Miller Date: January 19th 2006 Publication University of Liverpool MBA-EN-051109-05 pgs 18-22

Motivation is a difficult problem that at times is exasperating for not only the business owner or manager but anyone in a leadership role, with the problems and challenges being much the same, though perhaps on a different scale. Since it is a universal concept it is something that we are all familiar with and most people have their own unique ideas of what it means, which may or may not be true. Dr Denis Waitley states: “Motivation is a much maligned, over-franchised, over-promoted and misunderstood term. The word “Motive” defined as that within the individual, rather than outside, which incites him or her to action; an idea, need, emotion, or organic state that prompts action” [1] In my experiences in English as a Foreign Language (EFL) pedagogical settings that certainly has rung true. One of the great motivation researchers in second language acquisition, Zoltan Doyei stated, "teacher skills in motivating learners should be seen as central to teaching effectiveness". And that motivation largely comes from intrinsic motivation. [2] In study after study he has shown that competent and long lasting second language learning and acquisition can only come from inside the student, while extrinsic motivation was not long lasting [2,3,4] I have found that to be mostly the cases in the class setting that I have experienced. While external stimulants [for example, a candy for the correct answer] are those that can have short term success and it inevitably has limited long term success. The exception to this might be the grades that students earn, however it can be argued that motivation towards grades are largely intrinsic. [3] In business, at first glance extrinsic stimulants are all that matter in employee motivation through monetary remuneration and benefits. However, I don’t believe that that is the prime motivating factor in motivation (assuming that the salary is not way out of comparable metrics within similar industries) of employees. One valuable way of creating motivation is simply the way that the company treats its employees. An example, I’ve seen a close friend keep competent and valuable employees for years and years even though they could make more money in other companies. This motivation to stay and do a good job seems to stem from personal loyalty to the company as well as the president’s charisma and leadership when dealing with the employees. Fairness is one way that I would use to describe the way the company’s

founding president deals with all employees, and giving the employees a sense of belonging in the company. This seems to have had a very big impact on keeping his workers from moving to jobs that are more lucrative. He is quick to praise, not to show favoritism and to look at all sides of any conflict. In addition his salary is a well known fact in the firm, and it is lower than the highest paid employees. Taking those factors into consideration, the challenge for most entrepreneurs is to find practical ways to motivate employees to do their best and to remain within the company. I think that there a number of factors that can contribute to the success of having a highly motivated workforce. These can be through money (as would be expected), but also through other means as well. While motivation is something that is mostly intrinsic the question arises as to how to practically motivate. One way that an entrepreneur can motivate is through the use of titles within the company (CFO, Director of. . . and any other of the numerous titles that are available). Another is having the employees take a set number of “mental health days” without having to lie. Flexible hours are also something that does not cost the company anything, but allows employees the freedom to choose the hours that they work. While on the surface much of this appears to be extrinsic awards for the employees, I think that it shows that the company really cares, and that it something that the employees will see the gestures the benefits that the company provides. In addition, recognition for jobs well done and this does not always have to be an award or prize. Just public (announced in a meeting, a plaque on the wall or private (voiced or written) recognition is something that can go a long way to motivating employees. [3,5] If there is to be some type of award, one thing that I have found to be very practical is to actually give the employee something that they would really appreciate rather than the money for the award. After all, to a football fan a pair of great seats to the game is far more impressive than money added to a monthly pay check to pay for the tickets. Perhaps the best way to balance the intrinsic and the extrinsic is to give the employees an ownership stake in the business. While it may be actual shares, a very effective way is through profit sharing is one way to distribute. Not a new method of motivation; J. Paul Getty explained how it work on an oil rig in

Southern California before WWII. In the story he explained that a very knowledgeable oil rig foreman dramatically changed his attitude when a form of profit sharing was implemented. [6] One real estate educator advocates giving part of the profits of your investment properties to the manager, provided that person is still the manager when the property is sold [7] However, Marc Allen is one of the most forceful when he suggests that even the post office should have some form of profit sharing. He advocates that even tiny firms with only one employee should have profit sharing, by giving a hundred dollars when the company has made a sufficient profit to be able to afford to pay that amount. [5] While on the surface profit sharing is an external stimulant that the employees gain from, it brings the employee closer to the company and make them feel that they have an ownership stake in the company. [IBID] Finally, I think that it is important to make the employees feel that they are an important part of the team and that the business (and in turn the entrepreneur) cares about the employee. Works Cited [1] Waitely, D. The Psychology of WinningBerkly Books,1984. NY. [2] Dornyei, Z. 2001. Teaching and Researching Motivation. England: Pearson Education Limited. [3] Dornyei, Z. and Otto, I. 1998. Motivation in action: A process model of L2 motivation. Working Papers in Applied Linguistics (London: Thames Valley University), 4: 43-69 [4] Dornyei, Z. (1997). Psychological processes in cooperative language learning: Group dynamics and motivation. Modern Language Journal, 81, 482-493. [5] Allen, Marc The Millionaire Course. New World Library, Novato CA 2003. [6] Getty, J. Paul How To Be Rich. Playboy press, 1961. NY. [7] Aaron, R. Real Estate Success Prime Books Inc., Thornhill, Ont. 1993.