LME021 – How to motivate employees in the workplace

Your employees don’t contribute, they lack motivation, but they are always looking for better pay? I’ll show you how to motivate your employees.

Listen to the podcast version:

View the video version:

How to motivate employees with money

Money may be attractive, but it has no sustained impact on employee motivation nor on employee commitment!

Please don’t take this the wrong way. If you don’t pay your employees an adequate income, then you’ll demotivate your employees! They will not be commited to work for you.

But the inverse conclusion will only work on an exception basis: If you pay an above average income, this will by no means result in your employees being more motivated or more commited over the long haul.

Intrinic and extrinsic motivation

There is an important difference between intrinsic and extrinsic motivation. What the difference is and why you need to have intrinsically motivated employees you can read here: How employee motivation really works!

You need intrinsic motivation

Intrinsically motivated people have 3 characteristics:

1. Desire for self-determination

They want to work independently on a task with the greatest possible elbow room.
This means for your employees: Tell them about the goal, but give them the freedom to decide how they reach the goal.

2. Strive for excellence

Intrinsic motivated people want to grow with the task. They want to continue improving themselves on an issue that they feel is important to them. This means: Hepl your employees to become better in what they are doing. Help them with your feedback and offer them training.

3. Purpose

The things they do must have a purpose. In performing their task, they want to be part of something larger than themselves.
Talk about the company vision. Talk about the why. Why are you doing what you do. Why should they care to work for you?

The funny thing with intrinsic motivation:

If you take care about these 3 points you automatically take care that your employees don’t get demotivated.

Assume that your employees are motivated – at least when they start working for your company. What happens mostly is that people get demotivated over time by buerocracy or a bad boss.

Therefore: Your task as a leader is not to learn how to motivate employees. Instead, tell them about your business vision and the why and take care that you don’t demotivate them!


The inspiring quote

“The very essence of leadership is that you have to have vision. You can’t blow an uncertain trumpet.”

Theodore M. Hesburgh


LME017 – How to become a better listener and improve as a leader

Become a better listener

Become a better listener
Image: jgroup/ Resource:

As a true leader you should always ask yourself how to become a better listener. Because, the majority of employees consider their boss to be a poor listener. This is the result of a study performed by several organisations including the Business Executive Academy in Germany (Akademie für Führungskräfte der Wirtschaft).

This is tragic. It undermines employee motivation. Many misunderstandings throughout the daily routine could be avoided – if only managers were to take the time and simply listen.

Listen to the podcast version

Why do managers have such a hard time becoming a better listener?

Managers, especially if they are new as a manager, they want to be perceived as the engines of progress. Activity may frequently give them a false sense of being in control.

But listening is erroneously equated with passivity and submissiveness. Consequently, many managers focus more on talking than on listening. In the end, what the boss says is what goes. This is a big leadership mistake.

Bad decisions are made by those who do not listen

Many managers only listen briefly and are much too quick at forming an opinion. They suffer from “premature evaluation“. They make rushed evaluations of an employee’s statement, instead of absorbing the presentation, asking follow-up questions and comprehending the matter.

Are you one of these? Do you evaluate and react while your employee is still speaking? You are then actually no longer truly listening to them. You are already distracted by your own thoughts about the solution to the problem, and are not taking the time to understand the problem in detail. Misunderstanding and poor decisions are then already pre-programmed.

Getting to the bottom of things

When something goes wrong in your company, you should not only focus on facts and figures. You must to get to the bottom of things.

You will only do so if you understand the underlying emotions and motivations of the people involved. This requires that you ask and listen – but do so correctly.

Not an inquisition – but an inquiry instead

When listening actively, you are engaged with your conversation partner. You express empathy and address the other person with an open mind. It’s important to follow up on things that are not clear, and attempt to understand and address the other person’s feelings. You make an inward attempt to place yourself into the situation of the speaker.

It is important in this case to keep your opinion to yourself. Do not allow yourself to become agitated by allegations and criticism. Keep in mind:

Listening is not the same as agreeing!

3 tips how to ask questions the right way

Asking questions can be a great method helping your employees. But you need to use questions carefully. Otherwise they can be counterproductive.

1. Short questions in rapid succession

If you shoot short questions in rapid succession your employees may feel like being interrogated by a police officer. They feel pressed into a defensive position and feel like they are under attack. In this way, they become more and more afraid and threatened.

If a project went wrong and you talk to the responsible person, avoid asking short questions in rapid succession. One question is enough. Allow your employee to think and to find the right answer.

If you strive for becoming a better listener, don’t fire short questions in rapid succession.

2. Don’t trigger fear with your questions.

The shorter you formulate your question, the more pressing it is perceived by your employee. So, avoid this kind of questions. Instead of

“Why did you make the decision this way?”

You can ask:

“I can see that you were in a tough situation. What led you to make the decision this way?”

You see? Asking in that way does not trigger fear and defence.

3. Talk about the background of your question.

Sometimes it can help to introduce the background of your question with one or two sentences before asking the actual question. In the end you ask these questions in order to help or to understand – not to frighten, to demotivate or to frustrate.

Questions can be a terrific way to get others to think. But this will only work if your counterpart feels that you respect him. Therefore, never ever act like a threatening inquisitor!

Gaining trust and understanding

In order to learn how to become a better listener try to understand the emotions and motivations of difficult employees.

  • Why does the employee behave this way?
  • What is his perspective of things?
  • What is his reality?

Avoid jumping to conclusions. Good listeners express appreciation and can then gain trust. They become aware of valuable information, are better able to assess situations and can therefore avoid misunderstandings.

6 important tips for how to become a better listener

  1. Don’t just go through the motions, but actually listen attentively.
    Become completely engaged with your conversation partner.
  2. Without fail, good listeners also ask good questions. Ask for more information if you did not understand something. Repeat what you understood in your own words. Keep it brief when doing so.
  3. The ability to listen actively takes time to develop. Accept that you will feel somewhat clumsy and uncomfortable in your role in the beginning.
  4. Confidence is needed to approach others and to listen to them in an open and candid manner. Precisely in your role as the boss, you must have the ability to absorb unpleasant matters or criticism without having to justify yourself on the spot.
  5. Learn to appreciate pauses. Resist the urge to say something when a pause occurs. One of my bosses once told me: “You lead a conversation by saying little.”
  6. Are you one who tends to speak too much? Then you must accept the following:
    Generally, your counterpart is much more interested in himself and his desires and problems than in your desires and problems. Therefore: Speak less – and speak less about yourself. Place your counterpart at the center of attention, regardless whether this is customer, a colleague or an employee.

Further tips on how to become a better manager

If you liked this tips you should read my post on my 3 tips whioch help you to become a better manager. Just click here:

How to become a better manager

How to become a better manager


The inspiring quote

“Listen with curiosity. Speak with honesty. Act with integrity. The greatest problem with communication is we don’t listen to understand. We listen to reply. When we listen with curiosity, we don’t listen with the intent to reply. We listen for what’s behind the words.”

Roy T. Bennett

LME008 – Performance Based Bonus – What you ought to know about it.

Performance based bonus

Performance based bonus:
image: zastavkin/ resource:

Does a performance based bonus really work?

Of course, as a manager and entrepreneur you are constantly looking for new ways to improve your operation. Your employee’s job is to support this and to pull on the same string with you.

For this reason, nearly all large companies pay their managers performance based bonuses.

Their annual income is split into a fixed and a variable portion. The company intends to motivates with the variable compensation. Therefore, they link it to the attainment of individual objectives.

Listen to the podcast episode


Does performance based bonus work for small companies?

You may now be asking yourself:

“Should we not also pay our sales team performance based bonuses? There must be something to it since all the other successful large companies are doing this as well.”

Wait a minute. First, let’s take a look and see whether variable compensation truly delivers on its promise:

Objectives of performance based salaries

Variable compensation is often referred to as performance based salary or performance related pay. What is the underlying idea behind it?

The company or the supervisor and the employee agree to objectives. The intent is to get the employee focused on the objectives.

To ensure this, the company only pays a portion of the employees income if he attains his objectives. The company hopes to motivate the employee into acting in the company’s interests.

If he is particularly diligent, he can even outperform his objective. The employee then receives even more than 100% of the agreed to variable income portion.

The proponents of performance related pay primarily list the following benefits:

  • The variable portion motivates the employees.
  • The company pays the employees for performance.
  • Compensation management effort costs little, but gets good returns.

Do you also believe that variable compensation allows you to get more out of your employees? Well, let’s take a look at this in detail:

Employee motivation

I find it astonishing that companies feel that they need to motivate their employees to act in the interests of the company. I thought, the employee has an employment contract. In this contract he signed the obligation to perform this service. The company pays him his salary for it.

Now the company assumes that the employee is likely to only perform a portion of his productive output. The company’s position is that the employee will not honor his contract. Why would the company even employ someone who is very likely to not honor his contract?

Compensation structures in large companies

But it gets even more confusing:
Let’s take a look at the compensation structure in a large cooperation. This is how it works:

The higher the employee within the hierarchy, the higher their income, and the higher is also their performance based pay.

For instance, the variable income portion of a department head is typically between 10% to 20%.

However, the variable income portion of an Executive Board member can be 50% or more.

Watch my YouTube video on performance based salary of managers:

Motivation of CEOs

Performance based bonus for a CEO?

Performance based compensation for CEOs? Photo: goodynewshoes/ Resource

It gets even more extreme for the variable portion of a Chief Executive Officer working for a company listed on the stock market. The stock options and other bonus payments are in the millions.

Come on: Does somebody like that really have to be motivated to do his job properly in order to honor his contract? Is this truly necessary?

Amazing: The CEO already earns a base income of EUR 500,000 and still has to be “motivated” with a variable income portion, stock options and other bonus payments to the tune of several million dollars.

Please do not take this the wrong way: The company should generously compensate the CEO  if he is doing a good job. This should even be several million EUROS.

But a person like that does not have to be motivated! Either, he is intrinsically motivated, or he should be sent to hell!

Motivating lower-level employees

They are doing an outstanding job – although their organisations only pay a small fraction compared to the base pay of a CEO. Never mind a bonus and variable income portion.

Performance based bonus for elderly care takers?

Elderly caretakers are not paid performance based!
Photo: alexraths/ Resource:

What’s about the motivation of nurses, elderly caretakers, police men or soldiers? To the best of my knowledge variable income portions don’t motivate these people. Much more likely, these people are frequently highly motivated on their own.

As an aside: Even Presidents and Cabinet Secretaries are not motivated by variable income portions. That would really be beyond the pale!

Agree to objectives

During my 9 years as an employed Managing Director in a large international industrial cooperation, my compensation also included a variable component. My employees as well were paid based on performance.

Originally, I too was convinced that this performance based salary is fair and correct. But over time I became increasingly suspicious that something wasn’t working properly:

At the beginning of each year, I had a long meetings and objective discussions with each of my department heads. The meetings were always very important to me. Ultimately, we wanted to use these discussions to jointly paint a picture of the future, and to explore the options for the company’s and department’s direction. The idea was to find out what is feasible. The objectives from this were intended to be challenging but attainable.

The discussions actually went quite well with several employees. But in many cases the meetings were difficult because the employees sandbagged the objectives. They were not genuinely interested in finding out what was possible, and to set motivating objectives. Instead, they wanted to lower the bar for their personal objectives, in order to be assured of a maximum income with the least amount of effort.

Objective discussions turn into income negotiations

The more of these employee discussions I conducted, the clearer it became to me:

If an employee has a variable income portion,
every objective discussion is also an income negotiation.

This is counterproductive. As soon as the own income depends on objectives, most people are not motivated to even consider challenging objectives. I don’t even blame them. This is ultimately not in their interest. It even violates their underlying personal goals.

Employees become income optimizers!

Today, I am convinced that tying variable income to personal objectives is a waste. It frequently demotivates employees. In many cases, this linkage even has a more negative impact.

Let me tell you a terrific example for the damaging effect of a well intended objective that is coupled to income:

The Executive Board for a large telephone company issued a new customer bonus. Sales employees were to receive an additional bonus if they generated sales revenues with new customers.

What did the salespeople do? They prompted their long-standing customers to cancel the contracts, in order to sign them up as new customers. Instead of focusing on actual new business, they preferred to benefit from easily realized pseudo-new business.

When you create financial incentives you should not be surprised if your employees do not focus on the company’s success, but rather on how to maximize the incentive.

When bonus systems can be useful

The expectation of a bonus is only motivating and purposeful when routine assignments are processed according to 3 points:

  • Simple rules apply.
  • A clear-cut objective is set.
  • The path is clearly described and easily understood.

But this is rarely the case especially in todays world. Here, you need employees who are creative, who think on their own feet and contribute, accept ownership, and are reliable.

You therefore need employees who are self-motivated, i.e. intrinsically motivated. They need to understand the purpose of their work. You should therefore not attempt to increase employee motivation with a compensation scheme! The individual sense of purpose will fall by the wayside. Do not attempt to compensate for deficient leadership by means of a compensation scheme!

How should you structure an alternative compensation scheme?

Treat your employees fairly and pay fairly and avoid common leadership mistakes.

Especially in a small company, you don’t need a complicated compensation scheme for this. All you need is common sense and empathy.

Take the following rules to heart regarding your employee’s incomes:

  • Lead with objectives, but don’t tie the income to the objectives!
  • Agree to a fixed income that correlates with the employee’s performance!
  • If the employee demonstrates consistently good performance, you can increase his income!
  • If the employee consistently underperforms in spite of support, you should reduce his income or separate from the employee.
  • At the end of the year, pay a bonus to all employees if the company made good profits. If the company is doing well, then the employees should participate in this. That is fair. If the company is doing poorly, then it is also clear that a bonus cannot be paid.

LME007 – Employee motivation: How does it work and how can you improve it?

I recently spoke to a young high-tech entrepreneurabout employee motivation. He was complaining about his employees. They didn’t contribute, lacked motivation, but were always looking for better pay. He rolled his eyes and asked me in a depressed mood:

“All I want is to have motivated employees showing commitment. Is that asking too much? “

No, it’s not. You will only achieve long-term success with motivated employees.

As a manager you impact the employee motivation and employee commitment in your company – but in ways other than what you may think.

Listen to the podcast version

Could you possibly improve employee motivation?

This will work in the short-term, but it’s a dangerous game. Money may be attractive, but it has no sustained impact on employee motivation nor on employee commitment!

Please don’t take this the wrong way. If you don’t pay your employees an adequate income, then you’ll demotivate your employees! They will not be commited to work for you.

But the inverse conclusion will only work on an exception basis: If you pay an above average income, this will by no means result in your employees being more motivated or more commited over the long haul.

The crux with bonus payments

Some believe that they can master and control their employee’s motivation with bonus systems so called performance based bonus. A bonus is paid if the employee attains a certain performance. – How odd. Why does companies do this? Doesn’t the employee have an employment contract obligating him to perform this service, while the company is paying his income to do so?

If you wish to motivate with money, then you’re accusing the employee of not giving their best effort. You believe that he’s sandbagging a portion of his work performance. For example, then you are therefore only paying him 80%. By enticing him with a 20% bonus payment at the end of the year, you want to close this gap in his work performance, provided he performs.

The German motivation expert Reinhard K. Sprenger accurately called this type of bonus payment a mistrust discount. By making this type of bonus payment, you are suspecting your employees of an unwillingness to perform. This doesn’t exactly instill a trusting relationship. Does it motivate? Does this lead to real commitment? – Not really.

Then what exactly is employee motivation?

Employee motivation is one of those hard to grasp concepts. When is an employee motivated?

Generally put, my understanding of motivation is:

“The force of our psyche that drives and controls our behavior.”

Motivation then is the reason behind a person’s particular behavior. Motivational science differentiates between extrinsic and intrinsic motivation.

Extrinsic employee motivation

If you hold a carrot to a donkey’s nose, this is extrinsic motivation. This is how you would motivate the donkey to continue walking and carrying loads.

Employee Motivation?

Employee Motivation?
Image partly: deDMazay & phodopus/ source:

Applied to the business world: You simply replace the carrot with a financial enticement, a bonus or a promotion. Now you’re on your way to motivating extrinsically. By the way: if you threaten your employee with punishment, you are also motivating extrinsically, for instance:

“John, if you don’t start showing up at work on time at 7:00 a.m., you’ll get fired!”

It doesn’t matter if it’s a reward or a punishment: Extrinsic motivations involve actions that are initiated from the outside. Put bluntly: an extrinsically motivated employee will think:

“I’ll do it because I have to, otherwise …“

Intrinsic employee motivation

If someone takes an action for the action’s sake, he’s intrinsically motivated. He’s commited to his work. He either simply enjoys the activity, he believes it’s worth doing, or it represents an interesting challenge for him.

An intrinsically motivated employee thinks:

“I’m doing this because I want to! “

Extrinsic motivation is a source of focus

The expectation of a reward, but also the avoidance of a punishment is always dependent on the situation. Extrinsic motivation allows you to establish a focus.

But the extrinsic motivation will only last while the reward is anticipated, or the force is applied. When you motivate extrinsically, your employees aren’t working for the sake of the issue! They aren’t really commited.

But if an employee’s intrinsically motivated, no external controlling influences are needed. If you value creativity, self-reliance and reliability, then you need intrinsically motivated employees.

The anticipation of a reward or threat of punishment will only – and only then – motivate and be sensible if

  • Routine tasks need to be performed by following simple rules.
  • A clear-cut objective is set, and the path to achieving it is easily achieved.

A classic example for this is piece-work on an assembly line. It is quite possible to motivate employees to do such work extrinsically.

But extrinsic motivation squelches creativity!

However, extrinsic motivation will not work

  • with any task that is not routine
  • requires thoughts because the way to the solution is not clear
  • for tasks that call for creativity

Extrinsic employee motivation may even be counter-productive. The anticipation of a reward or threat of punishment will cause the employee to focus strictly on this reward or punishment. But the focus should be on creativity, right?

If you need commited, creative employees, you should not put them under pressure. Pressure kills creativity, regardless of whether it is in negative form as a punishment, or in positive form as a reward.

What kind of employee motivation do I need in my company?

Under normal business conditions, intrinsic and extrinsic motivation works in parallel. But the higher the intrinsic motivation, the better.

Why? For the most part, routine activity has fallen by the wayside in most companies. In today’s environment, companies automated most routine activities. They’re being performed by machines, not employees. This is why you need people who contribute, who work independently:

Employees who operate your expensive equipment.

Or are you able to specify each manual intervention and to show your employees in detail how they should operate the equipment?

Employees who call on your customers on your behalf.

You don’t want them to sell as many of your products at all costs. You need them to serve your customer in such a way that he will buy from you again.

Employees in the R&D department.

If they are not creative and develop new products, what will your company sell in the near future?

How can I motivate my employees intrinsically?

You can’t. I my opinion, Daniel H. Pink put his finger on it quite pointedly. He states that intrinsically motivated people have the following characteristics.

1. Desire for self-determination

They want to work independently on a task with the greatest possible elbow room.

2. Strive for excellence

Intrinsic motivated people want to grow with the task. They want to continue improving themselves on an issue that they feel is important to them.

3. Purpose

The things they do must have a purpose. In performing their task, they want to be part of something larger than themselves.

Watch that great video of Daniel H. Pink about intrinsic and extrinsic motivation. Awesome!

What can you do for your employee motivation?

Don’t spend so much time thinking about how to motivate your employees. But instead, spend time making sure that you don’t demotivate your employees.

  • Don’t skimp on their pay! Pay your employees adequately and fairly.
  • Be consistent and predictable.
  • Do not micromanage!
  • Give your employees decision making authority and manage with objectives and trust.
  • Support your employees in their personal development and their desire to improve themselves.
  • Answer the question why your company is a great place to work. Have a great business vision, emplyoees can connect with.

If you behave in this way, I assure you you have motivated and commited employees in the long term.

The inspiring quote

“The very essence of leadership is that you have to have vision. You can’t blow an uncertain trumpet.”

Theodore M. Hesburgh

How to motivate yourself to reach your goals

motivate yourself

How to motivate yourself.
Image: LuMaxArt/ Resource:

“Setting goals” is part of how to motivate yourself, but it isn’t enough. You must define action plans to ensure that your objectives are attained – and you must also execute these action plans.

I am sure that you are familiar with this: The implementation and stamina is the tough part – especially when changing your own habits.

Motivate yourself to become more efficient!

Let’s assume you need to be more efficient. For this reason, you have decided to limit yourself to checking your emails only twice a day. You want to focus on the important issues and not be constantly distracted by insignificant emails. You want to prevent email overload. That is a great intention. You know why you want to do it. You’re intrinsically motivated.

You are full of energy in the first few days and vigorously stick to your own rule: You read your emails only twice a day: once in the morning around 11:00 a.m., and then again in the afternoon around 5:00 p.m.

The email software is shut down for the rest of the day. Terrific. You are getting much more work done during the first week, and are focusing on the actually important issues.

And now it gets tough!

But you cannot stick with it. You cannot resist after the weekend: You have barely entered the office, and the email software is up and running: All you want is to take a quick look at what came in over the weekend. – That’s unfortunate. You did not stick by your own rule.

The next day, you open your email software at 11:00 a.m., but don’t close it after you have read your emails. You’re waiting for an important email from your employee. He promised to send you the presentation for tomorrow’s meeting. And once more, you fail to stick by your own rule.

You can probably guess the rest: After no more than three weeks, everything is back to usual. Your email software is constantly running, you immediately read every incoming email, and your efficiency is back to rock bottom. You are back to focusing on a myriad of details in the operational part of the business. This is unfortunate! Motivate yourself failed.

To motivate yourself is difficult?

Why is it so difficult to break one’s own habits? For example, why don’t New Year’s resolutions typically survive past the second week?

The reason can be found in one’s own willpower. Almost no one can withstand it for more than 1-2 weeks. But a minimum of 4-6 weeks are needed to form a new habit. Some even say it takes more than 60 days.

What can you do to motivate yourself?

Before I reveal the solution for this problem, I want you to think about the following situation: What would happen if you knew that every time you violated your resolution,

• $ 1,000 are automatically deducted from your account


• Someone would hand you a resounding slap in the face.

Would that be helpful? This might just work, right? Avoiding the pain would be a decent motivator to stick to one’s own rule. This would even work when your own willpower begins to fail you.

And now think about the following: What would happen, if every day that you stuck with your own rule, someone

• would give you $ 1,000 as a gift


• you would be surprised with your favorite meal, wine or dessert in the evening?

Would that be helpful? Here again: This would probably work for most people.

Change is driven by strong motivation!

People want to experience pleasure and avoid pain! What you need is something that triggers an emotion in you. If you have that, then you don’t need discipline. Declining willpower then no longer threatens your good intentions.

To implement your own intentions and motivate yourself over a period of several weeks, you can use this kind of extrinsic motivation: choose between the flight motivation or the goal motivation.

You can either penalize yourself if you didn’t stick with your intentions at the end of the day, or you can reward yourself. Neither the penalty, nor the reward has to be as drastic as the aforementioned examples. It is strictly up to you.

Pleasure or pain?

Psychologists will say that flight motivation is the better of the two to break a habit or doctrine. But to instill a new habit, the goal motivation is probably the better choice.

My recommendation: Simply experiment to find out what works for you and how to motivate yourself. I wish you lots of success and stamina with your good intentions. Here are 3 tips to help you:

3 Tips to stay motivated

1. Put it in writing!

You already know that objectives and action plans should always be recorded in writing. But also draw on your motivation yourself. Think about your motivations, and write these down in advance for each day.

An example for flight motivation:

If I leave my email software up and running, then I am not allowed to watch my favorite show tonight.

An example for goal motivation:

If I am successful in only reading my emails at 11:00 a.m. and at 4:00 p.m., then I can watch my favorite show tonight.

You may think this sounds trivial or immature. This may be so – but it works. Give it a try! You only need to rely on these motivations for the first 6 weeks. After that you will have become used to the new rule, and will use it automatically.

2. Have an accountability partner

It is very helpful to tell others, for instance your partner, about your intentions, motivators and also how you try to motivate yourself. This approach will help you to rigorously implement the reward or penalty.

Try to find someone who checks in on you time to time how you are doing with your goals. This can be a mentor, friend or even one of your employees. Just openly ask him or her if they would be willing to become your acountability partner.

3. Find a routine for yourself

Create a schedule that works for you, but consistency is key. It will become much easier, if you work at your best time. For instance: schedule your routine for the morning if you are a morning person.