Competitive wages are a critical element of attracting and retaining great employees, but there's more to motivating employees than dollar signs. In fact, studies indicate money is neither a significant factor in employee job satisfaction nor in employee engagement.
So what is it that makes your employees happy? And does employee happiness really affect your bottom line?
The following list is a roundup of the top factors that contribute to employee happiness, and at the end we will take a look at why it’s important.
Using Their Skills and Abilities
If you spent 4 years getting a degree in astrophysics and 2 years in pilot school and 2 more years training so that you would be prepared to pilot the space shuttle, it’s unlikely that any amount of money would make you excited to get up in the morning to collect garbage.
While this may be an extreme example, the principle holds true for anyone. It’s not that collecting garbage is not a respectable vocation; it’s that people want to use the skills and abilities that they have developed through their education and training.
According to a survey by the Society for Human Resource Management, employees are most engaged when they “feel that they are using their skills and contributing fully to the success of their organization.” If you want your employees to be happy (and you should), then the first step is making sure they are in the right position in the first place.
Recognition for Accomplishments
Giving employees recognition for a job well done is a simple but often overlooked method of motivating employees.
Recognition doesn’t mean doling out 6-figure bonuses or throwing extravagant congratulation parties; recognition is about providing genuine and positive reinforcement when employees get things right. And it’s about doing it regularly.
Study after study after study has demonstrated a real relationship between recognition and employee engagement, as well as with ROE, ROA and Operating Margin.
Many managers and supervisors find it difficult to prioritize recognition among their long list of responsibilities. Educating them to the importance of recognizing and acknowledging jobs well done is effective at encouraging the practice, as are incentive programs.
Relationships with Management
Having a good relationship with management is another crucial factor that improves employee morale and job satisfaction.
The foundation of a good relationship is good communication, so it is important for managers to be available and accessible. This makes it easier for management to respond to the problems of their employees and to provide direction where it is needed.
Good relationships and communication is not just important for immediate supervisors, but also with upper management as well. Ensuring that employees feel comfortable bringing forward ideas and criticisms not only gives employees a greater sense of ownership in the company, it also ensure that an excellent creative resource isn't lost.
Belonging to something bigger than yourself is a desire all humans share, and your employees are no different.
Creating a company culture that revolves around shared values and actually strives to make a difference in the world is not just a cheesy PR stunt - it is actually essential if you want to retain top talent. Employees are more motivated by their values than they are by profit margins and sales goals.
In fact, Deloitte’s survey on millennials (who already make up a majority of the workforce) found that “Corporate values that are shared with and believed by Millennials also promote loyalty—particularly when employers demonstrate a strong sense of company purpose beyond financial success.”
Why It Matters
Financial incentives alone are not enough to build a loyal and productive workforce. Happy employees are both more productive and less likely to walk out the door.
We all know that money doesn’t buy happiness, but apparently happiness does buy money.
Unsurprisingly, happy employees are also more likely to recommend your company to potential employees and your products to potential customers. Making concrete efforts to increase employee happiness can jump start this virtuous cycle that ultimately leads higher profits.