Motivating employees at your startup

Motivating employees can be a challenge. The best way to motivate an employee varies depending on the character and values of each individual.

Cash compensation as motivation

There is controversy around whether cash compensation is a motivator. Most theories and studies show that base salary is not a motivator. It can demotivate if it is perceived to be unfair, but base salary does not typically spur an employee to greatness.

Variable compensation can be used as a successful motivator if designed appropriately and focused on the right jobs.

Developing motivational programs

The power of non-cash recognition to motivate employees is sometimes undervalued. Motivational programs can make a difference, especially for cash-strapped startups.

In developing such a program, consider the options below. Keep in mind that different incentives may or may not be appropriate or useful, depending on the organization or the individuals involved. Evaluate what might work best for your startup.


When recognition programs are designed well, employees feel that their achievements have been recognized and this promotes performance. Public recognition is thought to affect not only the recipient but those around them. Ways to bestow recognition include:

  • Social gatherings to recognize successes and hard work
  • Contests
  • Service awards
  • Achievement awards

Culture and leadership

Never underestimate the importance of the culture and leadership style in your startup. A culture of open, honest communication fosters a happier, more productive workforce.

Work environment

Do not undervalue the physical surroundings of the work environment. Employees place a great deal of value on their workspace and the office aesthetics.

Training and coaching

Nurturing the development of an employee makes them feel valued by the organization in a way that also enables the employee to “give back.”

Career development

Offering employees a career path gives employees a target and direction for their performance efforts. Companies that promote from within send a clear message that they value their employees. Regular feedback helps the employee to continually improve their performance and refine their career development plan.

Leadership and increased responsibility

Giving your people leadership roles not only rewards their performance, but also helps you identify candidates for future promotion. Most people are stimulated by leadership roles, even in an acting position. Increased responsibility can motivate employees to be more productive and to provide more value to the organization. Autonomy complements this by giving the employee more freedom to exercise judgment and problem-solving skills.

Interesting work

Reward your employees by creating interesting projects and offering them opportunities to do more senior tasks.

Time off

Offering time off can be very important for some employees, even more important than money. Create programs that enable employees to take advantage of more vacation time or “time in lieu” wherever possible.

Office location

As your organization grows and adds additional office locations, consider offering a flexible workspace so that employees can work closer to home. Key meetings and projects could still be at the “home location” if necessary.

Health and wellness programs

Health and wellness programs can include the following:

  • Flexible work arrangements: Leverage the motivational value of “flex time,” working from home, and reduced or compressed workweeks.
  • Stress management: Offer employees stress-free places to relax during free time, such as entertainment rooms (for example, with a pool table), and fitness and reading areas.
  • Ergonomic assessments: Ensure that employees are not creating any undue stress on their bodies while working at their desk.