How to Improve Employee Performance & Motivation Effectively

In today’s highly competitive business landscape, mastery of employee motivation is more than a managerial skill—it's a strategic imperative. Whether through feedback and coaching, recognition and rewards, or employee empowerment, the right approach to performance management using intrinsic and extrinsic employee motivation techniques can set the stage for success. Effective leadership, goal setting, work design, and team building are the cornerstones that not only drive employee development but ultimately define an organization's trajectory.

This post explores practical tips and strategies for improving employee performance and motivating employees to achieve individual and business success.

Employee motivation is the driving force behind why an employee behaves a certain way to achieve a company goal.¹ It’s also a key pillar of organizational success, as companies rely on good performance from their employees to achieve key objectives.

Unmotivated employees are less productive and effective, regardless of their skill level.² They’re often less engaged and unenthusiastic about their work, contributing to low job satisfaction, lessened employee productivity, and poor business outcomes. Building a motivated and engaged workforce doesn't just happen. Employers must use a strategic approach based on one of several motivational theories.

This well-known method proposes that an individual’s behavior is dictated by five categories of human needs:³

• Physiological
• Safety
• Love and belonging
• Esteem
• Self-actualization

Employers must first ensure the workplace meets employees' basic physiological and safety needs. Beyond these essentials, attention shifts to employee wellbeing like social connections, affirming the individual's role within the team to fulfill their need for belonging. Acknowledgement of hard work and contributions satisfies esteem needs, while providing opportunities for continuous learning and development empowers employees to reach self-actualization, the ultimate level where they can achieve their full potential and creativity in their roles.

Herzberg’s model focuses on two dimensions of employee satisfaction: motivation and hygiene.⁴ This theory distinguishes between job satisfaction and dissatisfaction in the workplace, asserting that certain factors—”hygiene” issues like salary and work conditions—prevent discontent, while motivators such as recognition and challenging work truly drive performance. Understanding this dual nature is crucial for creating an environment where employees are not just content but actively engaged and motivated.

Consider a software developer feeling neutral about his job due to adequate salary and decent work conditions—factors that Herzberg would classify as hygiene elements. However, when management introduces stimulating challenges and recognizes his innovative solutions, these motivators deeply engage him, elevating his job satisfaction and inspiring him to excel in his role, thereby increasing employee motivation and demonstrating Herzberg's concept in action.

These two researchers developed a more contemporary approach that highlighted the synchrony between the needs of an organization and its employees.⁵ This method suggests that aligning personal aspirations with company vision through strategic management interventions can energize and commit employees, thereby enhancing performance and spurring innovation within the company. Leaders help employees understand the purpose of their work, identify with it, and perform tasks with passion to achieve success.⁶

Imagine a marketing professional aspiring to lead large projects. Under the Nicolescu and Verboncu approach, management recognizes this ambition and gradually assigns her to head a series of increasingly significant campaigns. This alignment of her personal goals of career development with the company's growth targets not only boosts her motivation but also contributes to company success as her expertise and leadership drive results on a larger scale.

Another modern-day approach focuses on intrinsic and extrinsic motivation. It identifies autonomy, relatedness, and competence as basic psychological needs that lead to self-initiated behavior and autonomous motivation.⁷ It debunks the belief that the best way to motivate individuals is by reinforcing their behavior with rewards.

In a graphic design firm, for instance, a designer gains autonomy by being allowed to choose projects that reflect her personal style. Competence is nurtured through regular, constructive feedback and advanced training sessions, increasing her skill set. Relatedness is established through team collaborations and company events that build a sense of community. This balanced approach fosters an intrinsically motivated and dedicated employee who is driven by more than just extrinsic rewards.

Any of these theories or approaches could be successful for supporting employees and fostering positive performance, but it's important for leaders to understand that there isn’t a one-size-fits-all solution to keeping employees motivated. Some managers may use a particular approach, or a combination of a few, to meet their team’s unique needs as different employees are motivated by different factors.

Fostering employee engagement and performance begins with recognizing the obstacles hindering productivity and effectiveness. Common barriers include poor decision-making, inadequate communication, lack of clarity, poor conflict resolution, and lack of mutual trust.⁸

If left unresolved, these challenges can contribute to job-related stress and burnout, which lead to higher rates of demotivation and disengagement. A recent report found that 42% of employees lose 15-30 minutes per day of productivity due to workplace stress, while more than one-third lose an hour or more daily.⁹ Leaders can help prevent employee burnout by preemptively addressing the common signs of demotivation and disengagement:¹⁰

• Decreased productivity
• Absenteeism and tardiness
• Low employee retention
• Constant conflict
• Lack of initiative

Research shows a stressful, high-pressure work environment is harmful to employee engagement and productivity over time.¹¹ In contrast, a supportive, positive work design yields significant benefits for both employees and organizations. Below are three ways leaders can build a workplace that keeps employees motivated and engaged:

Empathy, one of the most important leadership qualities according to Forbes, is essential for producing a team of motivated employees.¹² When employees feel valued and supported, they’re more engaged and productive, leading to better results.¹³

Employees are more motivated when they feel like they are a part of a team and have a sense of belonging and togetherness with their colleagues. Leaders can foster teamwork and collaboration through team-building activities, volunteerism, and social activities.

When employees have ample time outside of work to rest and recharge, their mental health has less of an impact on their job performance. In turn, they’re more engaged and productive and tend to stay longer in their role.¹⁴

Similar to every relationship, communication between leaders and employees is key, and inadequate communication can contribute to low employee motivation. Leaders who speak clearly, practice active listening, and initiate conversations are better equipped to motivate their teams.

Effective communication also extends to performance management. Providing constructive feedback, recognition, and praise can engage employees while constant criticism and lack of recognition are common demotivators.

Creating open communication channels for idea exchange and problem-solving is equally important when motivating employees. This may include weekly team meetings, regular one-on-one meetings, or asynchronous communication via tools such as Slack or Teams.

Performance-based incentive systems are effective tools for fostering intrinsic and extrinsic motivation in the workplace. Appreciation drives motivation, as 69% of employees admit they would work harder if management recognized their dedication and contributions.¹⁵ In addition to promotions and bonuses, there are various ways that managers can recognize and reward employees for their achievements and make them feel more valued, such as:

• Employee spotlights
• Service awards
• Anniversary celebrations
• Niche awards
• Peer recognition

Regular and objective feedback motivates employees by highlighting areas of improvement, which fuels smart goal-setting. There are two common methods for tracking performance and delivering feedback:

• Performance evaluations: These are often held annually, and employees are assessed and given feedback based on their individual strengths and weaknesses
• Feedback loops: This approach facilitates continuous improvement as employees can use open communication channels to gather, analyze, and act upon feedback from leaders

One of the best ways to ensure consistent feedback is to utilize performance management technology. Implementing tools, such as 15five and PerformYard, is an effective way to track and analyze performance to provide meaningful feedback and coaching. Consistent feedback motivates employees and improves employee development.