Beyond Prizes: How to Really Motivate Employees by Pamela Leven ...................................................................................................

Forget prizes for performance. Contests have no staying power, and competition is not universally appealing.

"To motivate employees to perform at their best, cultivate a working environment that gives people opportunities to succeed and allows them to rise to each occasion," says Alexander Hiam, workplace expert and author of Making Horses Drink.

"The vast majority of external incentive and reward schemes fail to create lasting improvements in motivation or performance," says Hiam. "People who are highly motivated are self-motivated. They have a strong will to achieve, to succeed, to learn and perform."

In the area of customer satisfaction, Hiam applauds business owners and managers who teach through their own example. By being accessible and available in the workplace, they can also spot negative behavior and quickly advise employees on better ways to handle situations, particularly in dealing with unhappy customers. Even better than the learn-by-example system is making employees thinks and acts independently.

"Feedback should be informative rather than controlling. You want employees to develop their own abilities, independent of the boss, to perform better," Hiam says. "Business owners should sit down with employees to discuss the basic goals of their jobs and find ways to identify success. Then make a measurement tool to quantify it."

"In customer service, you can use the smile test," Hiam says. "Did the customer leave smiling? That's a very powerful indicator of satisfaction. The boss is probably sensitive to it, but employees generally are not."

After each customer encounter, the employees quantifies the customer's facial reaction on a simple scale of, says, one to five. This system provides feedback and positive reinforcement. It is not a test for the boss to grade. "The employee will cheat if s/he has to hand in results," Hiam observes. "This works if you believe that people want to do good work—and most people do. Employees feel good when they achieve personal goals; they feel good when they help other people. And in the highest levels of motivation, these two coincide," Hiam adds.