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How to Motivate Employees Without Money or Promotions

Happy worker

The reality in many workplaces today is that the best and brightest talent will jump ship if they feel they've topped out on salary or can't expect a promotion anytime soon. And that's fair: Workers, especially top performers, will naturally want higher titles and compensation to reflect their contribution levels.

That's especially true at companies where pay has skyrocketed for certain hard-to-find employees while remaining flat or falling for others. So how do companies keep great workers engaged when budget and promotional limits could otherwise stifle career growth?

First, let's be clear about two things: 

  • People join companies but leave managers.
  • The relationship to the boss and the learning curve are the two most critical aspects of employee retention.

"Unlimited growth potential isn't required in most situations when trying to retain top performers who otherwise feel connected to their work and are fully engaged," said Rob Hall, senior vice president of global human resources at Avita Medical in Valencia, Calif.  "In other words, when people experience self-fulfillment in their contribution levels, their relationship with their boss and the positive difference they believe they make every day, compensation plays less of a role in that individual's overall assessment of their work situation."

Hall further explained that "compensation and vertical promotions may be very legitimate motivators under certain circumstances, but you have to see past that initial excuse to examine whether the real, underlying reason for an employee's departure has to do with the relationship with their boss. Likewise, workers may feel like they're treading water career-wise, doing the same work they've been doing for years with little opportunity for growth, challenge or professional development, which also leads to regrettable turnover."

HR professionals need to  start with one basic assumption, though: Their role is not to motivate the staff. All motivation is self-motivation; people are responsible for motivating themselves. Instead, HR should be responsible for creating an environment in which people can motivate themselves. It's an important distinction to understand because the weight of the world isn't on your shoulders to keep people happy.

Few companies have unlimited opportunities to promote people internally, yet they benefit from long employee tenures. Many employers have withheld equity adjustments and even annual merit pool increases because the bottom line has been squeezed so tightly, especially in light of large-scale downsizings in certain industries.

Therefore, now is the time to look at the latter half of the recruitment and retention equation. The time to begin recognizing, appreciating and motivating staff is now. That doesn't mean you have to bring your corporate pompoms to work and play cheerleader. There are, however, several relatively simple ways to create an environment in which people can motivate, reinvigorate and reinvent themselves.

1. Increase Opportunities for Delegation

"When done right, delegation provides on-the-job training that can challenge and motivate people exponentially—as long as what they're working on ties into their longer-term career goals," said Brenda Villa, director of human resources at Desser Aerospace in Montebello, Calif. "This isn't about managers delegating minor tasks that they want off their desk; it's about delegating what they're good at and putting people in a position to gain hands-on experience doing what they're most interested in."

In this case, delegation refers to stretch assignments where employees are able to get their hands dirty learning about and gaining exposure to other parts of the organization that they find exciting from a career development standpoint. "Far better than any 'book learning' or canned workshop, hands-on exposure rotates people into positions of pure learning and growth that's meaningful to them personally," Villa said.

Does a recruiter on your team want to learn more about human resources in general?  Assign that person the task of conducting a departmental baseline audit to capture the broader picture of the department's effectiveness. Would it make sense for them to spend a half day every week over the next quarter shadowing their peers in other areas of HR to learn firsthand what they deal with and how they handle challenges? Is the recruiter a high-potential performer who wants to visit corporate headquarters and get to know their international recruitment peers? You won't know until you ask, but delegating or exposing the individual to other areas of the organization can go a long way (with low expense) in re-engaging and retaining talent.

2. Introduce Rotational Leadership for Staff Meetings

"One thing that staffers often look for in an ideal employer is leadership development opportunities," Hall said. "In fact, we know that career and professional development lies at the top of Gen Y and Gen Z wish lists. Place employees into rotational leadership roles that help them grow and develop professionally. Specifically, allow each of your employees to run a weekly staff meeting—its structure, delineation of responsibilities to others, and follow-up. Placing future leaders into management development roles is probably the most important benefit that you have to offer your people."

Remember that it's much easier to complain than it is to fix a problem. People responsible for attempting to fix problems are less likely to blindly blame others because they're more sensitive to the challenges involved in rendering solutions.

3. Explore External Training Opportunities

With the cost of bachelor's degrees skyrocketing, professional certificates may be a great alternative. Assume that many of your best employees will be resume-builders: They'll stay long enough to prove their worth, so long as they feel they're on the fast track. Once they feel blocked from upward mobility, new learning or greater responsibilities, they may look elsewhere rather than forgo their personal agendas.

"The key is to allow all your employees a chance to make a difference and do their very best work every day," Villa said. "People are much more inclined to feel like they're making a positive contribution to your organization if they're in a learning curve. So even if you can't promote them because of budget or headcount restrictions, you can still challenge them to challenge themselves."

Training organizations offer hundreds of situation-specific seminars via Web-based e-learning self-study courses, such as finance for nonfinancial managers, foreign language acquisition and software certification. Two or three seminars per employee per year will add very little to your budget but allow employees a one- or two-day "sabbatical" to reflect on their careers, as well as reinvent themselves in light of your organization's changing needs.

4.  Hold Quarterly Professional Development Meetings

Scheduling a 30-minute meeting with each of your direct reports will help you, as a leader, build stronger relationships and learn what each individual values.

"Better yet, have your employees schedule time on your calendar, prepare the agenda and lead the conversation," Villa said. "You can review progress towards established goals, discuss where goals may need to be tweaked, ask about professional development opportunities and find out how you can provide greater organizational exposure or build stronger technical skills. Most important, take the time and make the space to listen."

What you talk about on the shop floor or in the office corridor is not what this is about—this is personal. This is about them: their self-assessment of their work; their identification of where they need greater support, structure and direction; their progress toward goals; and their identification of where they need help. Placing yourself into the role of mentor and coach says a lot about who you are and how much you care.  

Ultimately, you won't know what makes an individual tick until you spend one-on-one time listening. "That's especially important in remote and hybrid relationships," Villa said. "Effective leadership is based on personal relationships, and you won't really know how your individual staff members are doing unless you ask and make it safe for them to provide sincere answers."

People are, after all, motivated by very different things, and true motivation and bonding happens at a personal level as well as at the team level. If you could build a program at little or no cost to turn your people back on, then you'll likely avoid a crisis of excessive turnover and strengthen your reputation as an outstanding leader. In today's business environment of scarce resources, payroll increases and promotional opportunities, you'll have provided your staff with the two key elements of any successful retention program: a personal commitment and relationship showing that you care, along with a learning curve and constantly evolving, challenging and meaningful work.

Paul Falcone ( is a frequent contributor to SHRM Online and has served in a range of senior HR roles at such companies as Paramount Pictures, Nickelodeon, Time Warner and City of Hope Medical Center. He's a member of the SHRM Speakers Bureau, a corporate leadership trainer, a certified executive coach and the author of the five-book Paul Falcone Workplace Leadership Series (HarperCollins Leadership and Amacom)His other bestsellers include 101 Tough Conversations to Have with Employees, 101 Sample Write-Ups for Documenting Employee Performance Problems, 96 Great Interview Questions to Ask Before You Hire and 2600 Phrases for Effective Performance Reviews.