Knowledge Hub
for Growth

How to motivate your employees when you run a small business

Having a motivated workforce is key to your business’s success. If each member of your team is driven to achieve, they will each do their bit to move your business forward, helping it to hit and even exceed its goals. Here we highlight the nine most effective employee motivation strategies.

Encourage career development within your company

If employees join your company knowing that they have room to grow and progress up the career ladder, they are more likely to work hard, strive for promotion and stay for the long term. To drive employee morale and motivation, show your employees that they are not just starting a job with you, they are continuing their career journey with you.

Encourage existing staff to apply for more senior roles as they become available. The current CEO of BP, Bernard Looney, joined the oil and gas company in 1991 as a drilling engineer. When new staff members see evidence of other members of staff progressing up a company’s hierarchy, this helps them to believe that they can also win internal promotion.

Invest in your employees’ careers too. Run regular accredited training and development programmes and push team members to take certified external courses by contributing to their costs.

You can also boost employee motivation by spending time with each of your employees and asking them how they want their careers to progress. You can then try to design a programme that helps them work towards achieving their career goals.

Create an enjoyable working environment

While some positions feature more mundane repetitive tasks than others, there are tedious aspects to every job. If you create an enjoyable working environment, employee morale and motivation will naturally be boosted. If your employees enjoy being at work, they will be better motivated to do their work. Regular staff catchups, monthly social get togethers, team lunches and away-days, all give employees a chance to develop friendships, to discuss their challenges at work and to also support and motivate each other.

Remote working makes it more difficult to create an engaging, fun working environment for your whole team, but it’s not impossible. Using video conference calling, online quizzes and remote working apps, such as Slack, you can quickly get remote workers to feel part of your company.

Discover more on remote working in our 7 Tips for Building a Remote Start-Up Team feature.

Be flexible

Employees appreciate the chance to work flexibly when necessary now more than ever. If they would rather arrive at 10am to avoid rush hour and work through until 6.30pm and this doesn’t interfere with their job, let them. If they want to work a compressed week, which could mean, say, working longer hours four days a week so that they can have Friday afternoons off, and, again, this doesn’t interfere with their job, let them.

By encouraging flexibility, you demonstrate that you trust your employees to do their work brilliantly in a way that suits them. This should, in turn, motivate them to want to prove you right. Plus, it works both ways; when you’re up against a deadline and you need your staff to work late one night, they are more likely to do so happily, because they appreciate the times when you have been reasonable with their demands.

Provide desirable perks

Perks are those additional benefits that come with the job. You could pay for or contribute to your employees’ health insurance or gym membership. You could provide a free breakfast or lunch once a week or arrange for a masseuse to come in monthly.

Online employment network LinkedIn is known for its particularly generous company perks, these include paying for educational courses, subsidising pet day care and even contributing towards personal trainer costs and house cleaning. Check out all the LinkedIn benefits for inspiration. Once you enjoy a benefit it’s hard to give it up and used in combination with some of the other points in this guide, perks can be great for employee motivation.

Set targets

Sales staff expect to be set targets; they know that they have to bill say, £20,000 a month. While they might not be given financial targets, non-sales staff can equally be given key performance indicators (KPIs) to strive for. A marketing manager, for example, could be asked to double your number of Twitter followers over a three-month period; a business developer could be asked to break into a new market and a customer-service provider could be required to increase your company’s customer satisfaction rating from three out of five to four or above out of five.

You can also set team targets; each of the individuals in that team will then spur each other on to meet their individual targets, because it will help them to all meet their group’s targets. Most people enjoy a challenge and having targets and KPIs to meet are great employee motivation drivers.

Be appreciative

When someone achieves something that benefits your business, however big or small it might be, take time to find out about it, congratulate them and consider rewarding them. Maybe the office manager has found a cheaper stationery supplier that will save you hundreds of pounds a year, or perhaps the new graduate intern has managed to crack the Asian market for the first time.

Notify your line managers that you want to know about these achievements or schedule a slot to hear about them in company meetings. And, when you do get to know about them, give the person responsible a call, pop over to their desk to shake their hand, or take the team responsible out for lunch. Make your employees feel special and valued members of the company and they will increasingly feel part of the company and motivated to do even better for it.

The following three points are different ways you can show just how much you appreciate your employee’s efforts.

Reward staff

Reward both individual staff and teams when they meet their targets. These rewards could come in the form of financial bonuses or other attractive incentives, such as extra paid leave, vouchers for the theatre, lunch out at a top restaurant, a team-building evening at an escape room, or even something as extravagant as a weekend away.

Everyone values being appreciated and while a personal thank you is lovely; a special treat will always be welcomed and will instantly boost employee morale and motivation.

Give employees a share of the profits

A profit-sharing scheme is where a percentage of your profits are distributed to your employees. This can be a very successful form of employee motivation, if your business is highly profitable and employees can see those profits rising.

It won’t work for every business though. Profit-sharing schemes can serve to demotivate employees if, despite all their individual efforts, profits are low or down on the previous year – this could be because of general market conditions or it could be because you have made a major infrastructure investment in the business hitting your profit margins, in which case you risk fuelling employee resentment.

Give employees a share in your business

When you reward employees by giving them shares in your business, it incentivises them to want the business to succeed and hopefully pushes them to work that bit harder in their jobs. When employees have a stake in your business and they can see it growing, they may also be more inclined to stay with you long term.

There are a number of different ways that you can allocate shares to your employees. Share Incentive Plans (SIPs), for example, allow you to reward your employees with shares each year, so that they gradually build up a bigger stake in your company. While Company Share Option Plans (CSOPs) gives employees the option to buy shares in your company for a fixed price.

Harper James Solicitors’ employment solicitors can advise you on the best employee incentive arrangements for your situation and can draw up the necessary contracts to make these legally binding.

What next?

If you need advice on implementing employee incentive plans, our employment solicitors can help. Call us on 0800 689 1700, email us at or fill out the short form below and we’ll get back to you within 24 hours.

Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our Privacy Policy.

Our offices

A national law firm

A national law firm

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Head Office

Floor 5, Cavendish House, 39-41 Waterloo Street, Birmingham, B2 5PP
Regional Spaces

Stirling House, Cambridge Innovation Park, Denny End Road, Waterbeach, Cambridge, CB25 9QE
13th Floor, Piccadilly Plaza, Manchester, M1 4BT
10 Fitzroy Square, London, W1T 5HP
Harwell Innovation Centre, 173 Curie Avenue, Harwell, Oxfordshire, OX11 0QG
1st Floor, Dearing House, 1 Young St, Sheffield, S1 4UP
White Building Studios, 1-4 Cumberland Place, Southampton, SO15 2NP
A national law firm

Like what you’re reading?

Get new articles delivered to your inbox

Join 8,153 entrepreneurs reading our latest news, guides and insights.


To access legal support from just £145 per hour arrange your no-obligation initial consultation to discuss your business requirements.

Make an enquiry