Business Owners Try to Motivate Employees

Wall Street Journal | Small Business By SARAH E. NEEDLEMAN – JANUARY 14, 2010

As Recession Lingers, Managers Hold Meetings and Change Hiring Practices to Alleviate Workers’ Stress

Some business owners say their employees—after months of dealing with layoff worries, wage cuts or scaled-back hours—are stressed out and in need of extra attention.

In November, Nancy Jackson was able to hire a new full-time salesperson for the company she co-owns, Architectural Systems Inc. in New York, but found herself facing an angry 19-person staff. “I couldn’t believe their reaction,” she says. Just a few months earlier, some had seen their workweeks reduced or salaries scaled back; two colleagues had been laid off.

To mitigate the situation, Ms. Jackson quickly called a meeting to explain that beefing up the firm’s sales force was a necessary first step for making a companywide recovery. Meanwhile, she has since gone about hiring differently, she says, bringing on a new marketing associate as a temporary part-time employee, rather than a full-time staff member, so as not to rile her team. “There’s been a lot of emotional hand-holding here that we’ve never had to do before,” she says.

As the recession lingers, business owners are finding it necessary to take extra steps to make employees feel valued. They say their efforts—many of which cost little or nothing—are critical for maintaining employee productivity, confidence and satisfaction.

“Your employees are being bombarded with doom and gloom,” says Bert Martinez, a small-business adviser in Houston. “If there’s anything you can do to make your employees feel secure and that they’re important, they’re going to work better.”

What’s more, making strides now could help reduce turnover when the job market recovers. A recent Conference Board survey of 5,000 U.S. households showed that just 45% of respondents are satisfied with their jobs, down from 61% in 1987, the first year the survey was conducted.

To show appreciation for her five employees, Elise Lelon, owner of The You Business LLC, a leadership-consulting firm in New York, says she upgraded their job titles. “It doesn’t cost me anything and it makes them feel good,” she says. “You’ve got to think outside the money box when it comes to motivating your employees in this economic environment.”

Ms. Lelon says workers tend to value senior titles like “director” and “manager” because these can make their résumés more robust. “I have two housewives who were high-powered women before they settled down and had families,” she says. “We crafted titles and roles that offer them more continuity. As a result, they feel as if they haven’t missed a beat with their careers.”

Elise Lelon, right, upgraded job titles to motivate employees at her consulting firm, The You Business LLC.

Ms. Lelon pulled other levers as well. For example, she granted her staff the option to work remotely and at hours of their choosing, including nights and weekends. “Autonomy is worth a lot to people,” she says. “This creates an entrepreneurial environment for them.”

And because she didn’t give out pay raises last year, Ms. Lelon says she created a generous bonus-incentive program tied to the amount of revenue her employees generate for the firm. “It gets their juices flowing and it helps the business grow,” she says. “Today, it’s all about switching fixed costs to variable costs whenever possible.”

Christopher Mills, co-owner of Prime Debt Services, a debt-management firm in Dallas, took another approach. Last spring, he began meeting privately with his 14 employees once a week to let them vent, share ideas or just shoot the breeze. “I found the more I listened, the better they pepped up,” he says. “It takes time from me, but it’s worth it.”

Mr. Mills says he has gained valuable information from the get-togethers. For example, an employee once explained that he and some colleagues were upset because the prior week’s sales leads hadn’t been distributed evenly as usual. “It looked like all of a sudden we were playing favorites,” he says.

Immediately after, Mr. Mills met with his sales team to explain that what happened was a mistake, thus avoiding “a huge mutiny,” he says. “When they get it off their chests and realize I do care, it becomes my problem to solve. I can address it and they can go about their day being productive.”

Mr. Mills has also been showing his staff appreciation by preparing them a breakfast of waffles, bacon and coffee every Wednesday. “It’s one less thing on their to-do list.”

Write to Sarah E. Needleman at sarah.needleman@wsj.com