Business Leadership Today

How Employee Motivation Impacts Performance


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

How Employee Motivation Impacts Performance

The most important job of a leader is to motivate their employees to do outstanding work. Unfortunately, only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. 

Managing employee performance effectively requires leaders to identify and implement strategies that keep employees motivated to continually perform well and produce outstanding work. 

Understanding the ways in which motivation impacts performance can help leaders land on the best strategies for increasing it and ensuring they are providing a work environment employees can feel inspired in and thrive in. 

Employee motivation impacts performance in many positive ways. Motivated employees are more productive, happier at work, more committed to the vision, better collaborators, and more likely to stay with the organization. Effective performance management is essential for high motivation and high performance. 

This article will explore the ways motivation affects performance and how leaders can boost employee motivation to improve employee performance.

What Is Employee Motivation?

Employee motivation is the level of energy, commitment, and creativity that employees bring to their jobs and describes how invested they are in the work they do, how engaged they are with the organization’s goals, and how empowered they feel in their daily work to achieve those goals and reach their full potential. 

Motivated employees adhere to certain behaviors and engage in actions that result in positive rewards that satisfy human needs. They find satisfaction in going above and beyond because they like what they do and want to do it well. 

There are two types of motivation: extrinsic and intrinsic. Extrinsic motivation is motivation to participate in an activity based on meeting an external goal, earning praise or approval, winning a contest or competition, or receiving an award or payment. Intrinsic motivation is defined as doing an activity for its inherent rewards rather than for a separable consequence. 

What Are the Benefits of High Employee Motivation?

Motivation drives employee success and plays a vital role in employee satisfaction, which drives performance. In turn, improved performance impacts customer satisfaction, which can fuel organizational performance. 

Motivated employees are better at adapting to change and collaborating with their teammates. They are more willing to go above and beyond for a project, customer, or co-worker, and maintain a positive attitude at work. Having a team of highly motivated employees can also reduce turnover and absenteeism, boosting the team’s overall performance. 

What Are the Benefits of High Employee Motivation?

Often, managers do not realize how essential motivation is to leading well and ensuring an organization’s future success. They may even believe, mistakenly, that extrinsic motivators like compensation are enough to motivate team members to consistently perform well. 

But intrinsic motivators are actually a stronger predictor of performance. 

While both kinds of motivation are essential, intrinsic motivation is particularly important because intrinsically motivated employees are happier in their roles and more productive. They will continue to work at an organization because they love the work they do, not just because of the paycheck. 

How To Improve Motivation for High Performance

Good leaders motivate employees to follow them because employees want to follow them, not because they have to follow them. The same goes for motivation, and leaders can leverage the intrinsic motivation employees experience when they like what they do.

When employees like their jobs, they want to perform them well, so leaders have to foster intrinsic motivation for employees to consistently perform at a high level. 

They also have to manage employee performance in ways that increase engagement and support a positive employee experience. Strategies that are aimed at improving engagement and that support a positive employee experience can also improve performance because of the positive impact they have on motivation.  

These performance management strategies should be focused not just on outcomes and productivity but should also make employee well-being a priority. This ensures a sustainable high performance that won’t harm employee well-being or erode motivation and morale. 

Here are six strategies that leaders can implement that will help employees stay motivated to do great work. 

1. Give Employees Clarity on Performance Expectations

Accountability plays a crucial role in employee motivation. Employees who hold themselves accountable are motivated to meet deadlines, collaborate with teammates to achieve shared goals, and go the extra mile to get the job done. 

To stay motivated and accountable, and for leadership to effectively measure an employee’s performance, employees need to have clear goals to work toward, and they also need to know what is expected of them as they work to achieve their goals.  

When employees lack clarity on work expectations and goals, they can be confused and conflicted on a daily basis about their duties and responsibilities. This can raise stress levels, erode confidence, and decrease motivation. In situations where job responsibilities and duties may shift regularly, this clarity becomes even more important.

Providing clarity on goals and expectations makes it easier to increase alignment between an employee’s goals and the larger goals of the organization. This allows employees to focus more energy on achievement and allows leaders to better manage an employee’s performance without resorting to micromanagement. 

What to do: Have a dialog with employees about expectations, help them set goals, discuss how they fit into the organization’s bigger-picture goals, and ask the right questions to ensure they understand what is expected of them. 

What to avoid: Using vague language, failing to provide context, or setting unrealistic expectations without providing the tools employees need to meet them can hurt motivation and severely impact performance. 

2. Set Achievable Goals with Employees

To ensure the goals we set for teams and individual team members are achievable and vision-focused, leaders and team members should work together to set S.M.A.R.T. goals.

Set Achievable Goals with Employees

S.M.A.R.T. goals are specific, measurable, achievable, relevant, and time-bound.

  • Specific: Setting a specific goal helps employees narrow their focus and ensures there is no ambiguity around what is expected of them. 
  • Measurable: Making the goal measurable connects it to a single performance result and helps employees chart their progress. 
  • Achievable: Setting achievable goals ensures that expectations are reasonable and possible to meet. 
  • Relevant: Making sure the goal is relevant to the larger purpose or vision can keep employees intrinsically motivated. 
  • Time-bound: Making the goal time-bound can help employees avoid procrastination. 

This objective-setting technique provides the clarity employees need on performance expectations and helps them take ownership of their roles and hold themselves accountable by establishing a plan for achieving their goals and a way to track their progress.

What to do: Set S.M.A.R.T. goals with employees and check in on their progress through regular coaching sessions. 

What to avoid: Setting goals without employee input or setting unrealistic goals that employees will struggle to meet can hurt engagement and be disastrous for performance.

3. Exchange Feedback Regularly with Employees

Whether it’s praising employee achievements, offering ideas about how to improve processes, or suggesting behavioral changes, in an organization where feedback is the norm, we see open, frequent dialog between employees at all levels of the organization and a high level of trust that supports employee motivation.

In a feedback-rich culture, employees exchange constructive feedback regularly with direct supervisors and their co-workers. This ensures a work environment’s channels of communication remain open, transparent, consistent, and supportive. 

Exchange Feedback Regularly with Employees

For employees who may be struggling to hit deadlines or provide exceptional customer service, exchanging feedback with them can help them determine where things are going wrong, where improvements can be made, and what those improvements should be. 

To successfully implement a culture of feedback, leaders can demonstrate a communication style that improves the organization and its employees by emphasizing listening, understanding, and deep reflection over focusing on or reacting to any one individual’s views. 

What To Do: Leaders should give magical feedback that emphasizes connection, belonging, and high standards and focuses on growth, collaboration, and impact.

What To Avoid: Organizations should avoid the “feedback sandwich” method, which can be ineffective, and they should also avoid giving non-specific feedback that doesn’t let employees know what they did right or where they may need to course-correct. 

4. Offer Employees Incentives and Rewards They Want

Incentives and rewards can be a simple way to motivate employees—when done correctly. 

Incentives and rewards boost motivation because they reward the behaviors that underlie achievements and can improve values alignment. They can increase employee performance by as much as 44% and motivate up to 66% of employees to stay with their organization. 

Rewarding employees for their efforts and celebrating their progress lets them know they are valued and the work they do has an impact. It helps them connect the dots between their day-to-day job duties and the larger mission, vision, and goals of the organization and demonstrates to employees that they are essential to the organization’s long-term success.  

Non-monetary incentives, including extra PTO, flexible working hours, and recognition can be just as powerful as money, and help employees tap into intrinsic motivation, which can supercharge performance. 

What to do: Offer incentives and rewards that employees care about and that boost intrinsic motivation, embed recognition in workplace culture, and offer immediate rewards that increase intrinsic motivation by linking activities and goals.

What to avoid: Annual recognition programs that provide employees only an occasional reminder of the difference their work makes or offering incentives and rewards that are strictly tied to extrinsic motivation. 

5. Offer Employees Development Opportunities That Help Them Grow

One of the keys to motivating and engaging employees is helping them fulfill their need for growth. Employees need to feel that they are improving at something that is important to them. They will be more engaged in jobs where they feel they are picking up new skills, developing their intellectual capabilities, or moving into more senior positions. 

Offer Employees Development Opportunities That Help Them Grow

Learning a new skill that can help employees advance within the organization or within their field boosts motivation, and it’s also great for building a succession pipeline of highly motivated employees in an organization. 

Providing training, tuition reimbursement, leadership development, career-pathing, or coaching helps employees grow and yields results that benefit both the employee and employer.

Research compiled by LinkedIn has shown that when employees spend time learning on the job, they are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more able to take on additional responsibilities, and 21% more likely to feel confident and happy. 

What to do: When you set work goals with employees, also discuss their career goals, make them a part of the goal-setting process, and help them find and navigate paths to achieving their goals.

What to avoid: Offering employees access to training and development opportunities but not the time to do them. 

6. Give Employees the Flexibility They Need for a Healthy Work-Life Balance

Traditional performance metrics can’t tell us everything we need to know about an employee’s performance, including the anxiety and life stressors they may be encountering at home that can hurt their motivation and negatively impact their performance. 

Our employees have many demands on their time and energy. Consider the number of employees who are in a caregiver role, caring for a child, elderly parent, or family member with a disability. According to a recent Harvard Business School study titled The Caring Company, 73% of all employees have some type of current caregiving responsibility. 

Caregiving can be a full-time responsibility. It can create situations where employees need to change or reduce work hours, use leave time for caretaking responsibilities, or even leave their job (or their profession) due to the stress of juggling their personal and professional obligations. Offering them flexibility when possible shows employees that they are trusted, valued, and supported. 

Whether it’s remote or hybrid work options, a change in hours, or more leave time, offering a little flexibility can make a tremendous difference for employees who have competing demands on their time outside of work and improve their work-life balance. 

What to do: Offer the flexibility and autonomy employees need to build self-confidence, self-motivation, and accountability, and look for ways to help them balance work and personal life obligations so that they can be fully present at work and at home. 

What to avoid: This requires the right balance of oversight and autonomy; avoid micromanaging employees but be sure to check that they have the right amount of structure and that performance isn’t suffering.

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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