How to Motivate Your Team Without Breaking the Bank

We all dream of having an energized team, totally motivated and hitting all their goals. If you’re lucky, you may work in such an environment. Congratulations, that comes from hard work by leaders like you.

For the rest of us, the question then becomes how to motivate your team to be more like that. What do you do if you have limited budget, and not much time?

If you’re on your own to create such an environment, it can feel daunting. You can’t build an uber-cool, space-ship office like Apple, or make drastic changes to work schedules like Treehouse’s 4 day work week.

Fortunately, with a little thoughtfulness and planning, there are quite a few things you can do that will help motivate your team, regardless of your situation.

how to motivate your team is not giving more work like Dilbert

How to Motivate Your Team Without Breaking the Bank

One of the first things many people think of when motivating employees is to use the Carrot & Stick approach; threats and financial rewards seem to be the default for most managers.

However, if there’s any creativity or innovation to a role, research shows the Carrot & Stick approach doesn’t work. In fact, as Dan Pink reports in his book, Drive, it’s destructive:

  • Leading to increases in unethical behavior as people push to reach required or rewarded milestones.
  • An expectation for rewards for any task they’re assigned once they start getting rewards.
  • Creating short term thinking as they only focus on immediate rewards (similar to addictive behavior, it turns out).
  • Reduced risk taking to ensure safely reaching the goal, but missing potential greater gains.

So if a bonus is bad, how can you reward or thank people for good work and incentivize the behavior you would like to see? Here’s a few ideas how to motivate your team beyond that carrot and stick:

1) Look for inexpensive (or free) perks

A good perk makes life a little better, or easier, for your team. They demonstrate you care about your people and what’s important to them in their day to day life.

While stories of Silicon Valley startups overflowing with perks can make it sound like a costly investment, it’s often not as much as you think.

Google was at the forefront of the perks movement, and now offers dozens of perks to their employees. It’s easy to assume that they cost Google tons of money, but in fact many are free.  As Laszlo Bock, SVP of People Operations at Google, wrote in his book, Work Rules:

how to motivate your team - perks don't cost what you think

You may be thinking,  “I don’t have 50,000+ employees to use as leverage. I can’t do this,” but you’d be wrong. As Bock has found, you only need 50 to 100 employees involved to start getting significant volume discounts.

Every perk Google has offered has a benefit, and most have very little cost to them (except for their free food, and their shuttle buses). Here’s a list Bock provided in his book to give you some ideas you can try with your company:

how to motivate your team perks don't cost as much as you think

Your company probably isn’t going to have a list as comprehensive as Google’s perks. Instead, consider how one or two that cost little or no money can impact your people in a very a positive way. Small efforts can have a big impact.

2)  Replace bonuses with thoughtfulness

If perks aren’t your style, there’s still many other options you can try. Whether you have a budget to work with or not, there’s some great things you can do to motivate them.

Appreciate them for less than $10

The person who first remarked, “it’s the thought that counts” must have been a manager. Your actions are what resonate most with your team. What are you telling your team with how you turn your thoughts into actions?

One of the simplest things you can do to thank and reward a team member is to give them a thoughtful gift. If you take the time to build rapport, you’ll learn what they value and care about beyond work.  It is those things that can lead to a great, inexpensive gift.

A Story: Mark Price FTW

I worked with an engineer once who was a mega-fan of NBA Hall of Famer, Mark Price. Everyone knew it, because he often wore Price’s jersey to standup meetings.

When he went above and beyond to help me out once, I wanted to thank him, but I had no budget to do so. Anything I did would be out of my own pocket, so I got creative.

After some quick Google searching, I found an awesome Mark Price figurine on Ebay for $7. I eagerly bought it, and sent it to them with a note thanking them for their efforts helping me. Their reaction speaks for itself:

how to motivate your team - buy them an inexpensive gift like a mark price figurine

Not only did this instantly improve our working relationship going forward, it’s something that meant enough to him, that he still has this on his desk to this day.

When was the last time you made your team feel this way?

[Ed note: You can read the full story and some tips on finding an inexpensive gift like this for your team member here.]

Thoughtfulness beats bonuses

If you have a budget for bonuses for your team, consider how you could better spend them. Rather than giving them cash, which is easily forgotten, think about how you can better invest that money in a thoughtful way.

Turn a bonus into a gift

After hearing the story about the Mark Price gift, a friend who is a CTO at a 250 person startup, tried it with a bonus he was going to give someone.  It worked better than he expected, as he told me over a Twitter DM:

how to motivate your team turn a bonus into a thoughtful gift

Now, every time the engineer uses that MacBook, they remember who gave it to them. Unfortunately, people don’t remember money in their bank account the same way (though getting sufficient salary is of course important).

If you’re not rewarding an engineer, a high end MacBook may not be the best option. Fortunately, there are many other things you can do.

Google A/B Tests Rewards

One of the beautiful things about Google is that at their scale, and with their engineering driven culture, they can design and run statistically significant experiments in ways few companies can. Their results have been reported in the New York Times, the Harvard Business Review, and in detail in the book, Work Rules.

When it comes to bonuses, Google wanted to know which made employees happier: cash awards, or thoughtful gifts of the same value (like trips, Google TVs, dinners, and team parties).  

As Bock wrote in Work Rules, the results left no doubt:

“Despite telling us they would prefer cash over experiences, the experimental group was happier. Much happier. They thought their awards were 28 % more fun, 28 % more memorable, and 15 % more thoughtful.”

And before you think about reasons it won’t work in your situation, realize that Google found this was broadly true across all rewards they tested:

“This was true whether the experience was a team trip to Disneyland (it turns out most adults are still kids on the inside) or individual vouchers to do something on their own. And they stayed happier for a longer period of time than Googlers who received money.

When resurveyed five months later, the cash recipients’ levels of happiness with their awards had dropped by about 25 percent. The experimental group was even happier about the award than when they received it. The joy of money is fleeting, but memories last forever.

Whether you are pulling cash out of your pocket for a small gift, or repurposing money from a bonus, being thoughtful is one of the best ways to approach the question of how to motivate your team.

3) Use recognition and praise

The best way to regularly motivate your team is also the least expensive. All it takes is a little thought and effort on your part.

how to motivate your team - be like mary kay ash and praise

This quote from Mary Kay Cosmetics founder, Mary Kay Ash, rings so true. If you’ve ever given genuine, specific praise to a team member for a job well done, you’ve seen how it makes their day.

The impact of praise

Praise isn’t just a warm and fuzzy feeling. There’s a measurable impact it has on your team. Research by Gallup found that regular praise significantly improved turnover and productivity:

“[Those answering “strongly agree to] “In the last seven days, I have received recognition or praise for doing good work” is responsible for a 10% to 20% difference in revenue and productivity.

Employees who report that they’re not adequately recognized at work are three times more likely to say they’ll quit in the next year.”

Are you building a habit of giving regular praise to your team? Or do your people feel unappreciated? Don’t starve them of something humans crave so much.

[Ed note: You can learn more about how to give awesome, effective praise here.]

Regularly recognize hitting your standards

Every leader has expectations to meet, whether it’s to customers, shareholders, or colleagues. To meet those expectations, you have to rally your team to deliver results.  One of the best ways to do that is to establish standards, that if met, will make you and your team successful.

It can be tempting to press on to the next project or set of goals as soon as another finishes.  Don’t do that. Take the time to pause and reflect with your team. Recognize those that met your standards.

Recognize everyone that’s earned it

Former financial industry executive, Mark C Crowley, has a simple hack that he used to help motivate his teams to perform regularly in the top 5% of the organization.

Once a month he would meet with them and go over the results of the past month. Everyone who hit their goal was recognized at the start of the meeting.

how to motivate your team - reward hitting standards with something like a bag of candy

Crowley used bags of candy like the one pictured above to reward them. He would toss the candy to each person as he called them out and thanked them for their hard work in front of the rest of the team.

This gave every person working hard a brief moment of public recognition. It also gave those that came up short a healthy moment of feeling left out; it gave them something to strive for next month.

Even better, as he rose in the ranks and those he managed were also leaders, the bags of candy were a reward those leaders could take back and share with their teams.  This helped the praise spread even further in the organization.

Crowley summarized his approach well in our recent interview of him when he said:

“If you have 30 people working for you and 25 of them met or exceeded the goal, you have to recognize all 25.

A lot of times we go, “Well, it’s like the Olympics, we’re just going to give gold, silver and bronze.” If you want to destroy the spirit of the other 17 people that met their goals and your expectations, fail to acknowledge them.

People should know that if they meet your expectations and they meet the goals you set for them, that they’re going to get acknowledged. “

By consistently recognizing everyone that met his standards, his teams consistently outperformed the others in the organization. A few bags of candy each month were a small price to pay to get top performance.

If you’re wondering how to motivate your team, the limits are only in your creativity and thoughtfulness.

You don’t have to like candy, have a budget for Disney World, or buy figurines on EBay. Find what uniquely fits the culture and values of you and your team and make it a habit. Any act of genuine appreciation will be felt by your team.

What has worked for you to consistently motivate your team? Share your best tips how to motivate your team in the comments.