As reported in this recent BBC news piece, as many as four in ten employees are considering quitting their job in the next year, according to YouGov research for Investors in People.

“A lack of motivation at work is cited as a major problem, with unreasonable workloads, feeling underpaid and a lack of career path being blamed.”

Employees feeling detached, unsupported and with no clear direction are symptoms of poor communication, leading to de-motivation.

“De-motivation was highest within larger companies, the report said, with 39% of people in organisations of 5,000 or more saying that they were either not very or not at all motivated compared with 30% in organisations of between 50 and 250 people.”

Employee motivation is not just good for morale, it’s good for the bottom line, both in terms of productivity, but also because hiring staff is an expensive business. It costs many times more to recruit and train good staff than it does to retain them.

Any successful motivation and incentive activity has to have, at its heart, communication. Rewards are a means to generate attention, and open a channel of communication. Giving rewards without communication is meaningless and in the long run won’t improve employee motivation or performance.

Considering the wider implications of a sales incentive? Can your business handle the growth?

Thats the word of warning sounded by the Incentive Research Foundation. Soaring sales figures from incentive activity can put a strain on the rest of your business processes, creating a snowball effect on other aspects of the business that you should might not have considered:

“Developing an incentive program with a focus on sales growth alone is myopic,” says Dr. Gopalakrishna. ”Their impact extends well beyond the sales function to other constituents and processes within the organization.” A preoccupation with sales growth with no consideration for other business functions can produce a domino effect including: 1) an adverse affect on cash flow, an important business metric; 2) a possible disruption in supplies leading to unforeseen procurement expenditures because of the need to procure additional raw materials, often at short notice, to support higher sales arising from the incentive program; 3) extra shipping costs of ordered merchandise; 4) acquisition of new accounts may involve other subtle aspects such as customer quality. For example, some new accounts may delay paying their bills, causing an increase in accounts receivable which can hurt bottom-line profitability, specifically cash flow and the management of short-term capital; and 5) planning for additional workers (even though it may be temporary) involves considerable expense including the cost of hiring and training new workers.”

While the article offers good advice in the need to consider the wider implications of a hike in sales figures, these are nice problems to have, in our opinion.

(Snowball effect image by Flickr user Bikeclimbsail)