3 Cash-Free Ways to Motivate Employees
Life + Money

3 Cash-Free Ways to Motivate Employees

iStockphoto/The Fiscal Times

Given the tough economic environment, it’s no surprise that many employers are making hard-nosed decisions about compensation and benefits. And while raises and promotions are becoming increasingly rare, employee workloads continue to grow. The result? Waning employee loyalty, increased turnover, and lowered productivity and morale, according to a recent Knowledge@Wharton article.

Meanwhile, managers find themselves in a bind. If the company has frozen wage increases and cut back on benefits, what tools do employers have to motivate their workers and boost morale? After all, work still needs to get done — and done well.

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According to Wharton management experts, there are things that good managers can do during difficult economic times to keep their employees positively engaged in work. They cost nothing, and may help companies retain the talent they will need once the economy turns around.

1. Create ‘Intrinsic Motivators’

During a recession, when financial resources are particularly tight, “it can be quite powerful to focus greater attention on building more autonomy, mastery and purpose into employees’ jobs,” says Wharton management professor Adam Grant, who notes that author Daniel Pink summarizes these “major intrinsic motivators” in his book Drive. “Autonomy involves inviting employees to make choices about what projects to work on — or at least how, when, where and with whom to complete them. Mastery involves creating more opportunities for developing knowledge, skills and expertise. And purpose involves helping employees see how their work benefits others or contributes to a greater good.” (Grant has done extensive research on how a sense of purpose impacts employee performance. See: “Putting a Face to a Name: The Art of Motivating Employees.”)

2. Try a Tournament

According to Grant, certain practices pack a punch in terms of fostering the intrinsic motivators he cites above. One of them is holding a company-wide innovation tournament. “Recessions often elicit a threat-rigidity response, where employees focus their attention narrowly on protecting their jobs,” he notes. “Innovation tournaments can be a powerful way to break out of this threat rigidity and encourage a broader focus on creative ideas.” When innovation tournaments are well-designed, he says, they provide employees “with autonomy in selecting the ideas that they want to develop and the colleagues with whom they want to collaborate; opportunities for mastery in building and developing their knowledge; and purpose in helping the company weather a storm or designing new products and services that benefit end users.”

3. Watch for ‘Emotional Contagion’

And while employers can focus on finding functional ways to build workers’ morale, they need to remain aware of less obvious forces that can still drag them down. According to Wharton management professor Sigal Barsade, one of the most common threats during difficult times — and perhaps the most subtle — is “emotional contagion.”

Emotional contagion happens when co-workers “catch other people’s emotions through subconscious mimicry” and think that the emotions are their own, Barsade says. If one colleague becomes worried that the organization is having trouble, or if he or she expresses general fear, anger and anxiety about the economy at work, the mood can quickly spread. “Because employees’ moods can be as powerful an influence on performance as their words and deeds, the possibility for negative emotional contagion needs to be taken seriously, and managers need to be particularly vigilant in making sure this negative emotional contagion doesn’t spread.”

How? Barsade suggests that managers can start by addressing a negative person directly. “People often don’t realize how negatively they are being perceived, or how their negative emotions are influencing others in their work environment.” If an employee is intentionally negative, determining and discussing the source of the negativity can be helpful. (In some cases, Barsade notes, negativity is a legitimate reaction to circumstances.) If these steps don’t work, she says, managers need to move to “the non-verbal domain. That is, avoid sharing your gaze more than necessary in meetings with negative people.”

The best insurance against emotional contagion, Barsade adds, is to “create an environment in which positive emotions are not only allowed but encouraged. Having an emotional culture that makes it clear that destructive negative emotions will not be accepted gives employees the power to understand what the organization expects of them.”

Featured Professors: Adam Grant, Sigal Barsade

Republished with permission from Knowledge@Wharton , the online research and business analysis journal of the Wharton School of the University of Pennsylvania.