The Pizza Principle

Small business owners can rightfully feel like they are at a real disadvantage when it comes to employee motivation - especially now. Large companies can pay higher wages, offer better benefits and have financial buffers that make them better positioned to “weather the storm.”

While compensation is important, and all businesses - large and small - should do everything they can to provide the best livelihoods possible for their people, employee retention can be directly attributed to relationships with direct supervisors/managers. Numerous studies have demonstrated the employee/manager relationship is the number one reason why people decide to leave their organization. In fact, a 2018 report by ADP’s Research Institute indicated 36 percent of employee departures were because of a poor relationship with the direct manager.

In times like these, the stress of everything can make it difficult for leaders to put people first. As small business operators, keeping the bills paid and maintaining health standards are key priorities. However, it is critical to create a positive environment for employees - they are scared for the future and look to their employer for assurance. One way to engage is to make everyone part of the solution to any problem. Creating incentives is key to getting people to focus brainpower on improving business results, accomplishing health department mandates and ultimately building relationships.

Incentives do not need to be costly, and should be designed to promote teamwork…ESPECIALLY in an era when “we all are in this together.” Inc. Magazine highlighted a 2016 study by behavioral economist Dan Ariely in which three groups of employees were given different rewards for their productivity. One group received a cash bonus of $30. Another group received verbal compliments. The third group received pizza. Of course, there had to be an unlucky control group who received…nothing. After the first day, the group promised pizza was the most productive! In fact, as the week progressed, those promised a cash bonus actually had a DROP in productivity compared to the control group. To learn more about this incredible study, check out the Inc. article.

In a time when it is natural to lament seemingly insurmountable obstacles, engaging employees with simple, team-oriented incentives can help those challenges to be overcome. I’ll take my pizza with pepperoni and mushroom, please!