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The Importance of Employee Motivation to Retention

Learn ways companies increase their employees' motivation to succeed

Human beings learn a valuable lesson early on in life: Doing things we actually want to do is fun, and being forced to do things we don't actually want to do can be a big bore. Just think of book reports that are assigned in school – so many students who are, outside of the classroom, bright, voracious readers don't approach school readings with the same zeal simply because they're being forced to do them. The same principles apply in the workplace. Employees that feel intrinsically motivated to do their jobs – and do them well – are not only more productive, but are more willing to stick around at their companies long- term. A motivated workforce is a loyal one.

And there's never been a better time to embrace that fact. Studies by ADP have shown that "job switching is at an all-time high," and that 46 percent of employees are passively looking for new jobs while 17 percent are actively looking. Put this together and more than half of America's workforce is searching for greener pastures.

Many studies and articles have looked at the relationship between employee engagement and retention. However, employee motivation is that secret ingredient that allows greater engagement to be possible in the first place. And by instilling a sense of drive and personal satisfaction in employees, companies can decrease turnover and keep their top talent around long-term.

How Employee Motivation is Essential to Retention

When examining the reasons why employee motivation is so closely linked to retention, it's helpful to look at Maslow's famous "hierarchy of needs." The psychologist changed the way society thinks about human nature, and his insights have been applied to everything from educational models to corporate organizational structures. Maslow maintained that there are five levels of inherent needs that every human being has, and imagined these needs in a pyramid shape. The needs at the base of the pyramid need to be fulfilled before all else.

At the bottom Maslow placed physiological needs, such as food and water. Next came safety, followed by a sense of a love and belonging. Second- highest on the pyramid was self-esteem, and at the top was self-actualization, or an individual's ability to be creative, solve problems, feel satisfied by their activities and generally live life to the fullest.

When considering employee motivation and retention, one should put these top-two levels of the pyramid into focus: esteem and self-actualization.

  1. Employee esteem: It's hard for someone to feel motivated when they do not take pride in what they do for a living, and these feelings are magnified when they feel they are not respected by their management or other higher-ups. Add to this a lack of confidence in their abilities - for example, feeling as if they do not receive recognition for their talents or are not provided with opportunities for career growth – and employees will feel little motivation to do their best at work each day.
  2. Employee self-actualization: Beyond having positive self-esteem and feeling respected, people want to feel like their jobs are serving a greater purpose both for themselves and for the world. They want to feel like they are using their gifts and talents effectively, that they're improving their lives by doing so and that their companies – through their efforts – are making the world a better place.

When seeking to improve employee motivation, companies should first take stock of whether their people feel a sense of esteem as well as self-actualization.


When it comes to boosting motivation, it's easy to be tempted to think that more money is the answer. But while a competitive salary is essential to an employee's overall job satisfaction levels, feeling happy and appreciated can pay dividends – and may have an even greater impact on motivation.

A study by Research firm Mercer found that while base pay is a major factor in job satisfaction, it has less impact on employee engagement and "day-to-day motivation," as the Society for Human Resource Management noted. While financial factors have a positive effect on employee sentiment, their effects are limited when it comes to the personal drive to succeed that employees bring to their desks each morning.

"Employee engagement reflects the total work experience, and a big part of it is how you are treated, what kind of work you do and how you feel about your co-workers, bosses and the general work environment," said Mercer senior partner, Colleen O'Neill, in an interview with SHRM. To improve the "total work experience," and thus motivation, companies need to take a look at their work culture and take steps to make it more positive and supportive.

They should also strengthen the ways that corporate goals are connected to personal satisfaction and purpose.

When employees feel that the effort they put in goes only toward furthering their companies' goals, and not their own, motivation suffers. As Entrepreneur magazine noted, the leaders of organizations need make sure that employees know that their work is appreciated and that everyone, at all levels, has a stake in the company's success.

Recognition, Motivation and Retention are the Employee Trifecta

A major way to help employees feel personally invested in and rewarded by their jobs is to recognize them more robustly and more frequently. The Mercer 2017 Global HR Talent Trends Report found that 97 percent of employees want to be recognized and rewarded for the work they do day in and day out, big and small.

Furthermore, a survey by the SHRM found that "Values-based employee recognition is seen as significantly contributing to bottom-line organizational metrics." Recognition may just be the single most important factor in employee motivation, and, in turn, retention. Here are a few ways companies can improve their recognition programs and practices:

Implement Values-Based Recognition Programs

The survey by SHRM found that when recognition programs acknowledge employee efforts based on their alignment with the organization's values – thereby connecting corporate goals with personal purpose – recognition is even more effective. The survey showed that SHRM found that 90 percent of companies that had a values-based recognition program saw that their employee recognition awards had a positive effect on engagement. In comparison, 67 percent of companies with non-values-based programs saw a positive impact of recognition. Similarly, 68 percent of values-based programs improved retention, compared to 41 percent of non-values-based programs.

Show Recognition Through Gifts

While words of thanks and praise can make employees feel valued and appreciated, giving out employee gifts, award plaques, commemorative items and even thank-you notes can magnify the positive feelings associated with recognition and improve motivation levels. There are many ways gifts can be used – managers can give out fun items like tote bags, tumblers and tech accessories to employees for meeting weekly sales goals, and higher-end items can be given for important milestones. Items can also be personalized to make them even more special.

Managers should remember, however, that gifts and thank-you notes should not be saved for only the big occasions - they should be given out for major moments as well as for less- flashy day-to-day work.

Listen To What The People Want

A big part of effectively recognizing employees is also listening to their wants, needs and concerns. As Mercer found in its 2017 Global Talent Trends Report, "People expect their employer to ‘make work work' for their individual circumstances."6 Providing flexible work arrangements, more frequent reviews, greater career development opportunities and other perks are also a way of recognizing employees for the great work they do.

Motivated employees are more likely to stay at their companies long-term.

Financial incentives can help overall job satisfaction, but when it comes to day-to-day motivation, creating a positive work environment built on respect, personal purpose and recognition instills a stronger sense of drive in employees and improves retention for companies. Successories has everything organizations need to improve their recognition programs on any budget – check out their catalog today and get started improving employee motivation today.

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