Retail Management: How to Motivate Employees to Optimize Productivity

Every retail business owner knows the value of their workforce. Good employees sell more products, engage with customers in a genuine way, and act as brand ambassadors in the store and outside in their daily lives. But some retailers struggle with how to motivate employees and keep them that way.

As Marci Martin of Business News Daily summarizes in the article 3 Proven Ways to Motivate Your Sales Team: “A motivated sales staff is critical to the success of your company. The relationships they build with your clients and customers create the foundation of your organization — not just in terms of individual sales, but also your overall reputation and growth.”

The first step in building an effective, motivated retail workforce is to hire the right people. For more on knowing when to hire and how to hire the right employees, check out our post How to Hire: A Comprehensive Guide to Vetting Your First Retail Employee.

Once you have your employees hired and trained, the next challenge is to keep them engaged and working hard. As part of the retail management team, it’s your job to motivate your employees. And motivated employees are more productive — in fact, Warwick found that happy employees are 12% more productive.

So, how do you keep your employees happy and motivated? Let’s take a look at some effective motivation methods that optimize productivity.

Invest in Your Employees

You’ve taken the time, money, and resources to hire your employees — now it’s time to grow them. Investing in your employees through continued on-the-job training ensures that you have a well-trained staff, shows your employees that you care about their growth and career options, and increases increases the efficiency of your operations. In the Forbes article 5 Easy Ways To Motivate — And Demotivate — Employees, Victor Lipman says that “mentoring, coaching, suggesting additional training or coursework — all of these can be helpful to employees, and highly valued.”

In turn, those valued, well-trained employees are good for the bottom line. In fact, in the Time article “Future of Retail: Companies That Profit By Investing in Employees,” Christopher Matthews found that “by underinvesting in their employees, retailers are actually making their operations much more inefficient, and therefore much less profitable.”

You can invest in your employees by providing seminars to grow their skills, sharing organization charts so employees can plan their future with your company, and promoting from within for supervisory and managerial roles.

Even big-box retailers like Walmart of taking note of these correlations. After Walmart raised its hourly pay to $10 in 2015, sales rose by $5 billion in the first six months of 2016. And a Harvard Business Review article further makes the case for such investments, pointing out that “highly successful retail chains—such as Quik­Trip convenience stores, Mercadona and Trader Joe’s supermarkets, and Costco wholesale clubs—not only invest heavily in store employees but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors. They have demonstrated that, even in the lowest-price segment of retail, bad jobs are not a cost-driven necessity but a choice.”

Rewards

A classic way to motivate employees is through incentives and rewards. Rewards can be small, like buying top weekly performers lunch, or providing gift cards for popular coffee shops to those who go above and beyond with customers. Loftier rewards like salary increases and bonuses are a great way to motivate employees to stay for the long run and strive to meet quarterly sales goals. You can provide bonuses based on exceptional performance reviews, to your top sales performers, or to employees who have stayed with the company for a certain amount of years, say five or 10.

You can also award prizes based on individual goals that employees set with their manager by tracking their progress through self evaluations and performance reviews. Offer recognition through an Employee of the Month program that rewards staff members who surpass expectations, have exceptional attitudes, and exceed performance goals. You can even create teams within your staff and reward based on group performances to build teamwork and employee collaboration.

Gamification and Non-Monetary Incentives

Motivating your retail employees doesn’t need to be all business — it can be fun too. Retail is an exciting industry, and that positivity and enthusiasm should be a part of your incentive program. Employees that enjoy coming into work and genuinely have a great time while they’re there have a contagious energy that customers are sure to notice.

Engaging your employees doesn’t have to always involve cash or financial rewards — get creative! Create short-term games that employees can take part in, like the first one to sell a new product gets to leave early, or whoever puts the most inventory away in a week gets to pick the background music on Sunday.

Bonusly offers a robust list of 37 Creative Employee Reward Ideas retailers can peruse when considering how to motivate employees, and some of the gems include:

• Seminars, Master Classes, and Conferences: Professional development opportunities are a great way to motivate employees while also helping them hone their skills.
• Sleep in Day: For those of us who find it tough to get out of bed, an incentive that allows an employee to sleep in a bit on a working day is a creative way to keep them engaged.
• House Cleaning or Laundry Service: Domestic chores can be a real, well, chore — so offer a lucky employee a chance to tick one of these tedious tasks off their to-do list. Offer 2 hours of professional house cleaning or arrange for a monthly pick-up laundry service to motivate them to meet their goals.

Keeping things fun and engaging is the job of management, and it’s important for all supervisors to embody the attitude that you want your employees to mimic.

Secret Shoppers

One way to track the performance of your employees is through secret shopper programs, like Coyle, or by finding your own shoppers through part-time work marketplaces, like Monster. Mystery shoppers go through the retail experience in your store and report back, giving an honest, unfiltered review of how your employees performed.

If your employees are expecting secret shoppers on a regular basis, it motivates them to treat each and every customer as though management is watching the interaction. Secret shoppers are also a way to garner constructive feedback from the customer’s perspective to rate employee performance and identify any gaps in customer service.

Image Credit: Coyle

With the reports from the secret shoppers, you can set benchmarks that employees are expected to hit and reward those who exceed these expectations.

Performance Reviews

Employees motivated to do better need to know what is expected of them and where they stand. Once you’ve implemented the strategies to motivate your retail employees, make sure that you schedule regular check-ins to track their satisfaction and progress. Regular performance reviews in the form of one-on-one meetings with management are a great way to hear what your employees like about your incentive programs, what they think is working, and what they’d improve. Encourage management to meet with each direct report once a month for a formal meeting, and be available for more impromptu discussions throughout the week to address any issues that arise. For formal meetings ensure that managers file out the proper employee review paperwork and keep copies in each employee’s HR file.

It’s also the perfect time for your management team to outline what is expected of the employees and discuss strengths and areas of opportunity with each individual.

How to Motivate Employees: Moving Forward

Discovering how to motivate your employees and what works best will be different for each retail business. And you’ll find that different things work for different individual employees. The strategies outlined here are a great jumping-off point to motivate your employees and optimize productivity within your company.

How do you keep your employees motivated? Share your experiences in the comments.